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Director's Report
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Mahindra & Mahindra LtdIndustry : Automobiles - Passenger Cars
BSE Code:500520
ISIN Demat:INE101A01026
Book Value(Rs):277.45
NSE Symbol:M&M
Div & Yield %:0.37
Market Cap (Rs Cr.):74908.57
P/E(TTM):32.96
EPS(TTM):18.28
Face Value(Rs):5
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Dear Shareholders

Your Directors present their Report together with the audited financial statements of your Company for the year ended 31st March, 2020.

A. FINANCIAL AND OPERATIONAL HIGHLIGHTS

Particulars 2020 2019
Revenue from Operations 45,488 53,614
Other Income 1,668 1,689
Profit before Depreciation, Finance Costs,
Exceptional items and Taxation 7,466 8,328
Less: Depreciation, Amortisation and
Impairment Expenses 2,223 1,860
Profit before Finance Costs, Exceptional
items and Taxation 5,243 6,468
Less: Finance Costs 113 113
Profit before Exceptional items and Taxation... 5,130 6,355
Add: Exceptional items (2,014) (30)
Profit before Taxation 3,116 6,325
Less: Tax Expense 1,785 1,529
Profit for the year 1,331 4,796
Balance of profit for earlier years 28,967 25,206
Less: Transfer to Debenture Redemption
Reserve 14
Profits available for appropriation 30,298 29,988
Add: Other Comprehensive Income/(Loss)*.. (8) (9)
Less: Dividend paid on Equity Shares 1,057 932
Less: Income-tax on Dividend paid 131 80
Balance carried forward 29,102 28,967

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

Economic activity remained largely subdued and tighter financial conditions impinged upon activity. The second advance estimates released in February, 2020 implied real GDP growth of 4.7% for the fourth quarter of the Financial Year 2020 within the annual estimate of 5% for the year as a whole.

However, this is now at risk from the COVID-19 pandemic's impact on the economy. High frequency indicators suggest that private final consumption expenditure has been hit hardest, even as gross fixed capital formation has been in contraction since the second quarter of the

Financial Year 2020. On the supply side, the outlook for agriculture and allied activities appears to be the only silver lining, with foodgrains output at 292 million tonnes. Meanwhile, most of the service sector indicators in January-March, 2020 moderated or declined. Anecdotal evidence suggests that several services such as trade, tourism, airlines, the hospitality sector and construction have been further adversely impacted by the COVID-19. Due to overall slowdown in auto industry leading to lower sales during the Financial Year 2019-20 followed by abrupt closure of business activities from 25th March, 2020 due to COVID-19 lockdown, your Company recorded a decrease of 15.2% in revenue from operations at Rs. 45,488 crores in the year under review as against Rs. 53,614 crores in the previous year.

The Profit for the year before Depreciation, Finance Costs, Exceptional items and Taxation recorded a decrease of 10.4% at Rs. 7,466 crores as against Rs. 8,328 crores in the previous year. Profit after tax decreased by 72.3% at Rs. 1,331 crores as against Rs. 4,796 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 COVID-19 outbreak, across borders and geographies, has severely impacted almost the whole world and triggered significant downside risks to the overall global economic outlook. Due to the lockdown announced by the Government of India from 25th March, 2020, entire operations of the Company came to a halt. The lockdowns and restrictions imposed on various activities due to the pandemic have posed challenges to all the businesses of your Company and its Subsidiaries. Though it is difficult to predict any demand scenario for the immediate short term, the Company expects the Tractor demand to show good improvement on the back of several positive factors such as record

Rabi production, higher Government procurement, announcement of higher MSPs leading to better realisation to the farmers and outlook of a normal monsoon aiding sentiments for a good Kharif crop. The Company's Auto sales traditionally come from both rural and urban segment. On account of positive factors stated above, the Company expects quicker recovery in rural India and rural demand to improve sales momentum for Auto Sector while urban segment will take little longer time to come back to normalcy. Factors such as lower household incomes, employment uncertainty, higher cost of finance and difficulty in getting finance as a result of potential rise in NPA in the Financial Sector may result in demand constraints for discretionary items like automobiles.

Although there are uncertainties due to the pandemic, the Company is taking several measures to mitigate the adverse impact by optimising costs and continuously realigning the cost-structures to the activity level.

Performance Review

Automotive Sector

Your Company's Automotive Sector, posted total sales of 4,71,141 vehicles (4,11,345 four-wheelers and 59,796 three-wheelers) as against a total of 6,07,548 vehicles (5,37,639 four-wheelers and 69,909 three-wheelers) in the previous year, registering a de-growth of 22.5%.

In the domestic market, your Company sold a total of 4,44,218 vehicles as compared to 5,69,092 vehicles in the previous year resulting in a de-growth of 21.9%.

In the Passenger Vehicle (PV) segment, your Company sold 1,86,942 vehicles [including 1,79,405 Utility Vehicles (UVs), 6,679 Vans and 858 Cars] registering a de-growth of 26.5%, as compared to the previous year's volume of 2,54,351 vehicles [including 2,35,362 UVs, 17,451 Vans and 1,538 Cars].

In the Commercial Vehicle (CV) segment, your Company sold 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 Heavy Commercial Vehicles (HCVs)] registering a de-growth of 19.9% over the previous year's volume of 2,48,601 commercial vehicles, [including 53,149 vehicles < 2T GVW, 1,76,203 vehicles between 2-3.5T GVW, 8,235 LCVs in the LCV > 3.5T segment, 176 vehicles in the 7.5-16.2T GVW segment and 10,838 HCVs].

In the three-wheeler segment, your Company sold 58,145 three wheelers, registering a de-growth of 12.1% over the previous year's volume of 66,140 three wheelers. For the year under review, the Indian automotive industry (except 2W) de-grew 18.8%, with the Passenger Vehicle (PV) industry de-growth of 17.9% and Commercial Vehicle (CV) industry de-growth of 28.8%. The UV segment of the PV industry posted a flat performance with 0.5% growth. Within the CV industry, the LCV goods <3.5T segment de-grew 20.2% while the HCV goods segment de-grew 56.0%.

Your Company's UV volume stood at 1,79,405 units, a de-growth of 23.8%. The UV market share for your Company stood at 19.0%. For the year under review, your Company's PV volume stood at 1,86,942 units with a market share of 6.7%. The Stylish & Thrilling XUV300 launched in February, 2019 performed well in the compact UV segment with a volume of 37,576 units for Financial Year 2020. 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 45.7% market share. Your Company sold a total of 1,87,859 vehicles in this segment. Your Company has a market share of 65.3% in the LCV 2-3.5T segment, which is the Pik-UP segment. In the Medium and Heavy Commercial Vehicle (MHCV) segment, your Company sold 5,857 trucks as against 11,014 in the previous year. This is a de-growth of 46.8%. Your Company's market share in the HCV segment stands at 5.0%. 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 (MEML)] 14,602 EVs (966 four wheelers and 13,636 three wheelers) as against 10,276 EVs (1,811 four wheelers and 8,465 three wheelers) in the previous year. This growth is supported by the Governments' thrust on adopting EVs, and sustained effort by your Company in working with various stakeholders, especially fleet operators. During the year under review, your Company posted an export volume of 26,923 vehicles as against the previous year's exports of 38,456 vehicles. This is a de-growth of 30.0%. The spare parts sales for the year stood at Rs. 2,494.5 crores (including exports of Rs. 230.8 crores) as compared to Rs. 2,633.5 crores (including exports of Rs. 284.0 crores) in the previous year, registering a de-growth of 5.3%.

Farm Equipment Sector

Your Company's Farm Equipment Sector recorded total sales of 3,01,915 tractors (domestic + export) as against 3,30,436 tractors sold in the previous year, registering a de-growth of 8.6%. This includes 2,988 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 sales of 7,09,002 tractors, a de-growth of 9.9%. Tractor Industry recorded de-growth in Financial Year 2020 after three consecutive years of growth.

In the domestic market, your Company sold 2,91,901 tractors (including Gromax Agri Equipment Limited), as compared to 3,16,742 tractors in the previous year, recording a de-growth of 7.8%. However, in a very competitive industry, your Company increased its market share by 0.9% and continued its market leadership for the 37th 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 horticulture segment.

For the year under review, your Company exported 9,956 tractors which is a de-growth of 26.6% over the previous year.

Spare parts net sales for the year stood at Rs. 718.2 crores (including exports of Rs. 42.4 crores) in Financial Year 2020 as compared to Rs. 682.2 crores (including exports of Rs. 47.0 crores) in the Financial Year 2019, registering a growth of 5.3%.

Other Businesses

Mahindra Powerol

Under the Mahindra Powerol Brand, your Company has been a leader in providing power back-up solutions to the telecom industry for the past 13 years. To cater to changing customer needs, your Company continues to expand its presence in tele infra management and in the energy management solutions space.

In the retail genset business, your Company is the No. 2 brand by volume, offering a wide range of solutions from Lower KVA range to mid to higher KVA range.

With a focus on providing greener solutions, your Company started selling Gas Powered Gensets across the country, in the Financial Year 2019-20.

Construction Equipment Business

For the year under review, your Company (under the Mahindra EarthMaster brand) sold 880 Back-Hoe Loaders (BHLs) against 1,286 BHLs in Financial Year 2019, which is a de-growth of 31.6%. With the slowdown in Infrastructure Sector, the BHL market in India de-grew by 22.5% over the previous year. Your Company continues to be at 4th position in the BHL industry.

Your Company has presence in the road construction equipment business through motor graders (under the Mahindra RoadMaster brand). For the year under review, your Company sold 168 motor graders.

Two-Wheeler Business

For the Financial Year 2019-20, your Company sold 1,450 two-wheelers (including 412 export). Additionally, your Company successfully exported first lot of ‘Made in India' electric two-wheeler E-Ludix, to its subsidiary Peugeot Motocycles in France. In line with the revised strategy for the two-wheeler business, your Company through its subsidiary, Classic Legends Private Limited (CLPL) had reintroduced the iconic brand ‘Jawa' to the Indian market in 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.

Current Year's review

During the period 1st April, 2020 to 11th June, 2020, 7,122 vehicles were produced as against 79,655 vehicles and 8,289 vehicles were dispatched as against 77,332 vehicles during the corresponding period in the last year. During the same period 22,025 tractors were produced and 23,049 tractors dispatched as against 64,233 tractors produced and 63,241 tractors dispatched during the corresponding period in the previous year.

The world is in the middle of perhaps the biggest crisis faced ever in the modern times. Just three months ago, the IMF was expecting positive per capita income growth in > 160 member countries in 2020. Today, it projects that over 170 countries will experience negative per capita income growth this year.

The ensuing lockdowns to contain the spread of the virus have curtailed both supply and demand. Added to this, a combination of lower incomes and heightened uncertainty has added to the drag on consumer spending and business investment. This could result in a massive drag on GDP growth. Thus, Financial Year 2021 is expected to be exceptionally challenging and unlike any other time before.

The RBI and the Government have been coming up with targeted measures and hopes remain pinned on them doing ‘whatever it takes' till normalcy is achieved. Currently, most Financial Year 2021 forecasts pencil in growth in the range of 0-2% with some even expecting a recession. Expectations of the pandemic fading and allowing a gradual normalisation along with proactive and effective administrative, monetary and fiscal measures could enable a semblance of partial recovery in the latter part of Financial Year 2021. However, the outlook is heavily contingent upon the intensity, spread and duration of the pandemic.

Finance

Financial Year 2019-20 can at best be described as a ‘Rocky Road' for the world economy and financial markets. Market sentiments remained volatile since the start of the financial year due to escalating trade tensions between US and China, fears of disruptions to supply chains, prolonged uncertainty on Brexit and geopolitical tensions in Middle East. As the year progressed, trade tensions dragged down international trade, corporate confidence and capital spending, which ultimately led to Global growth rate dropping to a meagre 2.9% in calendar year 2019, the lowest since global financial crisis. While the growth remained robust in United States, most other advanced economies strongly exposed to global trade including Eurozone and Japan stayed weak.

At the start of the year 2020, a phase 1 trade deal agreed between U.S. and China and green shoots in manufacturing indicators, raised hopes for a global mini-cycle recovery. However soon thereafter, a virus outbreak in China quickly progressed into the biggest human and economic crisis impacting the world in a century. The COVID-19 outbreak has not only brought considerable human suffering, it has also brought an unprecedented collapse in trade and commerce. The containment efforts have involved quarantines, restrictions on labour mobility and travel, and sharp cutbacks in many manufacturing and service sector activities. Global value chain linkages have amplified the overall macroeconomic effects of the pandemic.

There is still a lot of uncertainty on the duration and depth of the virus-induced recession. In its forecasts published in April, IMF projects the global growth in 2020 at –(minus) 3.0%; a mark down by more than 6% relative to the earlier forecasts. Growth in the advanced economies is projected at –(minus) 6.1% in the coming year, whilst emerging economies are expected to contract by –(minus) 1.0% in 2020.

Financial markets are sharply hit by the heightened uncertainty and are witnessing a flight to safe assets such as US Dollar and Gold. Markets are also jittery as it is felt that monetary policy has reached its limits with almost all major central banks at the zero lower bound or negative interest rates. Most countries are resorting to aggressive fiscal measures to fight the slowdown. The risk-off sentiment has also led to a rush to hoard liquidity by borrowers on one hand, and risk aversion amongst lenders on the other hand.

Commodity Prices especially Crude and Metals, which were soft throughout the year due to slowing global demand, were rattled by both demand and supply shock post the COVID-19 outbreak with Crude prices (US benchmark) briefly plunging to negative territory in April, 2020.

On the domestic front, India also faced global headwinds and most growth engines - private consumption, private investment, and exports - showed a sustained slowdown. In addition, tightening lending conditions on account of stressed Balance Sheets of Banks and NBFCs, also impacted demand for goods and services.

The Indian rupee came under sustained pressure during the year and saw a 9% depreciation closing the year at 75.38. This was despite healthy fund flows from Foreign Portfolio Investor (FPI) and Foreign Direct Investment (FDI). FPI flows turned negative in March and saw an outflow of Rs. 1,18,203 crores taking the yearly tally to an outflow of Rs. 27,528 crores. Going forward whilst the plunge in crude prices will keep India's Balance of Payments supported, the ongoing risk-off sentiment and pressure of emerging market currencies will keep Rupee elevated in the short term.

In line with most other central banks, Reserve Bank of India cut policy rate of 185 bps including the 75 bps emergency cut to support the economy from COVID-19 related shocks. With limited arsenal remaining in monetary policy, RBI also announced several liquidity-boosting measures and regulatory forbearance including CRR cut, Targeted Long Term Repo Operations (TLTROs), liquidity support for NBFCs and Mutual Funds, etc.

Your Company continued to focus on managing cash efficiently and ensured that it had adequate liquidity and back up lines of credit. It shored up additional lines of liquidity. During the year, your Company availed short term working capital and export finance. As on 31st March, 2020, Rs. 900 crores of short term working capital and trade finance, was outstanding. During the year, your Company repaid Rs. 91.01 crores of long term borrowings from internal accruals.

The Company's Bankers continue to rate your Company as a prime customer and extend facilities / services at prime rates. Your Company follows a prudent financial policy and aims not to exceed an optimum financial gearing at any time. The Company's total Debt to Equity Ratio was 0.09 as at 31st March, 2020.

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 continuously strives for excellence in its IR engagement with International and Domestic investors. Structured conference calls and periodic investor / analyst interactions including one-on-one meetings, participation in investor conferences, quarterly earnings calls, video conferencing across various key geographies and annual analyst meet with the Executive Chairman, Managing Director and Business Heads were organised during the year. During the year, your Company had organised an event called ‘BS6 knowledge sharing session', which was to showcase the Company's preparedness for BS6 transition. Your Company interacted with around 631 Indian and overseas investors and analysts (excluding quarterly earnings calls and specific event related calls) during the year. Your Company always believes in leading from the front with emerging best practices in IR and building a relationship of mutual understanding with investor/analysts. 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 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 was awarded as ‘Best Financial Reporting (Large Cap)' by IR Magazine Awards – 2019, Mumbai and your Company's Annual Integrated Report won the Gold at the 2019 MARCOM Awards, USA.

Dividend

Your Directors are pleased to recommend a dividend of Rs. 2.35 per Ordinary (Equity) Share of the face value of Rs. 5 each on the Share Capital, payable to those Shareholders whose names appear in the Register of Members as on the Book Closure Date. Dividend is subject to approval of members at the ensuing Annual General Meeting and shall be subject to deduction of tax at source. The equity dividend outgo for the Financial Year 2019-20 would absorb a sum of Rs. 292.15 crores [as against Rs. 1,187.35 crores comprising the dividend of Rs. 8.50 per Ordinary (Equity) Share of the face value of Rs. 5 each on the enhanced share capital and tax thereon paid for the previous year]. Further, the Board of your Company decided not to transfer any amount to the General Reserve for the year under review.

The dividend pay-out is in accordance with the Company's Dividend Distribution Policy.

Dividend Distribution Policy

The Dividend Distribution Policy containing the requirements mentioned in Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached as Annexure I and forms part of this Annual 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/FY20/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. 36,868 crores in the current year as compared to Rs. 34,742 crores in the previous year, an increase of 6%. Its consolidated profit after tax after non-controlling interests is Rs. 4,033 crores as compared to Rs. 4,298 crores in the previous year, a decrease of 6%.

The Group's finance company, Mahindra & Mahindra Financial Services Limited (Mahindra Finance), reported a consolidated operating income of Rs. 11,883 crores during the current year as compared to Rs. 10,372 crores in the previous year, a growth of 15%. The consolidated profit after tax after non-controlling interests for the year is Rs. 1,075 crores as compared to Rs. 1,827 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. 611 crores as compared to Rs. 593 crores in the previous year. The consolidated loss after non-controlling interest for the year is Rs. 193 crores as compared to profit of Rs. 120 crores in the previous year.

Mahindra Holidays & Resorts India Limited, the subsidiary in the business of timeshare registered a consolidated operating income of Rs. 2,372 crores as compared to Rs. 2,239 crores in the previous year. The consolidated loss after non-controlling interests for the year is Rs. 132 crores as compared to profit of Rs. 60 crores in the previous year.

Mahindra Logistics Limited, a listed subsidiary in the logistics business has registered a consolidated operating income of Rs. 3,471 crores as compared to Rs. 3,851 crores in the previous year. The consolidated profit after tax after non-controlling interests for the year is Rs. 55 crores as compared to Rs. 86 crores in the previous year.

Ssyangyong Motor Company, the Korean subsidiary of the Company has reported revenues of Rs. 19,972 crores in the current fiscal year as compared to Rs. 24,184 crores in the previous year. The loss for the year is Rs. 3,029 crores as compared to loss of Rs. 345 crores in the previous year.

The consolidated group profit before exceptional item and tax for the year is Rs. 2,586 crores as against Rs. 7,280 crores in the previous year. The consolidated profit after tax after non-controlling interest and exceptional items for the year is Rs. 127 crores as against Rs. 5,315 crores in the previous year.

During the year under review, Mahindra Finance CSR Foundation, Merakisan Private Limited, Mahindra Bangladesh Private Limited, MSPL International DMCC, Meru Travel Solutions Private Limited, Meru Mobility Tech Private Limited, V-Link Automotive Services Private Limited, V-Link Fleet Solutions Private Limited and Fifth Gear Ventures Limited became subsidiaries of your Company. During the year under review, Orizonte Business Solutions Limited, Mahindra International UK Ltd, Mahindra Defence Naval Systems Limited, re Villas 1 AB, re Villas 2 AB and Cleansolar Renewable Energy Private Limited ceased to be subsidiaries of your Company. Subsequent to the year end, Graphic Research Design s.r.l. and Divine Solren Private Limited ceased to be subsidiaries of your Company.

During the year under review, Machinepulse Tech Private Limited changed its name to Mahindra Teqo Private Limited, Passeport Sante SL changed its name to Holiday Club Canarias Vacation Club SLU and Mahindra Graphic Research Design s.r.l changed its name to Graphic Research Design s.r.l.

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

The Policy for determining material subsidiaries as approved by the Board is uploaded on the Company's website and can be accessed at the Web-link: https:// www.mahindra.com/resources/FY20/AnnualReport.zip

C. JOINT VENTURES, ACQUISITIONS AND

OTHER MATTERS

Mahindra First Choice Wheels Limited acquires 100% equity stake in Fifth Gear Ventures Limited

During the year under review, Mahindra First Choice Wheels Limited ("MFCWL"), a board controlled subsidiary of Mahindra Holdings Limited ("MHL"), which is, in turn a wholly owned subsidiary of your Company, acquired 100% of the equity share capital of Fifth Gear Ventures Limited ("FGVL"), for a consideration of around Rs. 30.45 crores discharged by MFCWL by way of cash and shares of MFCWL aggregating around 0.75% of MFCWL's fully diluted share capital. FGVL, is engaged in the business of maintaining and operating the website www.carandbike.com, an e-commerce market platform that facilitates sale and purchase of new and used vehicles and keeps its users updated with the latest information and reviews from automotive industry. This acquisition will help MFCWL expand its presence in the digital automotive space and seamlessly integrate the online and offline user experience.

Merger of Mahindra Vehicle Manufacturers Limited with 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 Section 230 to 232 of the Companies Act, 2013. 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. The Scheme is subject to receipt of approvals from Directorate of Industries, Maharashtra Industrial Development Corporation, National Company Law Tribunal (‘NCLT'), Mumbai Bench and such other statutory / government authorities as may be directed by the NCLT. The Scheme has been filed with the Stock Exchanges and NCLT.

Sale of shares of your Company by M&M Benefit Trust

During the year under review, M&M Benefit Trust (‘the Trust') which forms part of the Promoter Group of your Company, sold 1,92,00,000 equity shares (treasury stock) representing 1.54% of the total paid up equity share capital of the Company. The sale has been executed on the Stock Exchange(s), at a gross price of Rs. 648 per share. Following the sale, the shareholding of the Promoter and Promoter Group in your Company came down from 20.44% to 18.90% of the total paid up equity share capital of the Company.

Scheme of Amalgamation between Mahindra Defence Naval Systems Limited and Mahindra Defence Systems Limited (Scheme)

The National Company Law Tribunal has approved the Scheme vide its order dated 22nd August, 2019. The Appointed Date of the Scheme is 1st April, 2018 and the Scheme is Effective from 18th September, 2019. Pursuant to the Scheme becoming effective, Mahindra Defence Naval Systems Limited ceased to be the subsidiary of Mahindra Defence Systems Limited and of the Company.

Joint Venture with Ford Motor Company

In October, 2019, your Company entered into definitive agreements with Ford Motor Company Inc., USA ("FMC") to enable the formation of a joint venture wherein your Company and/or its subsidiary(ies) would hold a 51% equity share capital and FMC would hold the balance 49% stake. The joint venture company would be Mahindra Ford Automotive Private Limited ("MFAPL"), formerly known as ‘Ardour Automotive Private Limited'. As part of the transaction, MFAPL will acquire the existing automotive business of Ford India Private Limited ("FIPL"), a wholly owned subsidiary of FMC at an enterprise valuation of Rs. 1,925 crores. The Purchase Price to be paid by MFAPL to FIPL would be arrived at by deducting from the enterprise value, after making customary closing adjustments, the net debt that would be transferred to MFAPL. Based on the available estimates, the likely Purchase Price to be paid by MFAPL would be Rs. 1,289 crores, of which 51% i.e. Rs. 657 crores would be funded by your Company. In the aggregate, your Company is committed to fund, for acquiring a 51% stake in MFAPL and for the future operations of MFAPL, an amount not exceeding Rs. 1,400 crores.

For reference, FIPL has been engaged in the automotive business in India since 1995. Currently, it is the sixth largest player in the four wheeled passenger vehicle market in India. As one of the largest exporters of vehicles from India, FIPL manufactures and exports vehicles and engines from its facilities in Chengalpattu, Tamil Nadu and Sanand, Gujarat. For the year ended 31st March, 2019, the total revenue of FIPL's Automotive business was Rs. 26,324 crores. The formation of this joint venture is the next step in the strategic alliance forged between Ford and your Company in September, 2017. This joint venture will further strengthen your Company's presence in the Automotive business. It will help your Company's growth in key emerging markets. The joint venture will be responsible for growing the Ford brand in India and exporting its products to Ford entities globally. Using the strengths of both shareholders, MFAPL would be focused to deliver operational excellence and value to stakeholders. The partnership will allow your Company and FMC to offer new product to customers faster than before and will deliver profitable growth to both entities. The joint venture will drive enhanced competitiveness through greater economies of scale across the automotive value chain, including optimised sourcing, product development and use of relevant technologies. In addition, the joint venture will be a catalyst for growth for the Ford and Mahindra brands in emerging markets, which are growing at double the rate of the global industry.

Your Company has since received approval from the Competition Commission of India as well as the required anti-trust approvals from the European Commission, Korean Fair Trade Commission and Competition Commission at South Africa and expects to complete the transaction within the current financial year.

Acquisition of controlling stake in Meru

In December, 2019, your Company acquired 36.63% of the equity share capital of Meru Travel Solutions Private Limited ("Meru"), holding company of the Meru Group and has the right to appoint majority of the directors on the Board of Meru. Therefore, Meru along with its three wholly owned operating subsidiaries became subsidiaries of your Company. Your Company is committed to enhancing its equity stake in Meru up to 55%. Further, your Company has call option to acquire shares from certain existing investors of Meru and these existing investors of Meru have a put option to sell shares to your Company. In the aggregate your Company is committed to invest an amount not exceeding Rs. 201.5 crores in Meru.

Currently, Meru through its subsidiaries operates in the ride hail segment and also has a presence in the corporate transportation space. Meru was one of the first radio taxi operators in the ride hail segment and currently Meru has presence in Mumbai, Delhi, Bengaluru and Hyderabad. On the corporate transportation side, Meru has been providing transportation solutions to companies in various sectors such as BPOs, Banking, IT and ITES. Given your Company's intent to grow its presence in various segments of Mobility Services, the investment in Meru would enable your Company to increase its presence in the corporate shared mobility segment which is an area of strategic interest to your Company.

Investment in Eurl LD Azouaou, Algeria

In March, 2020, your Company entered into an agreement to subscribe to around 5% of the share capital of Eurl LD Azouaou, Algeria ("LDA") for an amount equivalent to US$ 1,50,000 (approximately Rs. 1.1 crores). LDA is engaged in the business of tractor assembly and distribution in Algeria. In the past, Algeria has been an important export market for the farm equipment business of your Company. To that extent this investment would enable your Company to re-enter the Algerian Agricultural Machinery Market.

Investment in Porter

Earlier, your Company had merged a step down subsidiary named Orizonte Business Solutions Limited which operated a technology enabled load exchange marketplace platform for matching the needs of cargo owners with transporters with Smartshift Logistics Solutions Private Limited ("Porter") (formerly known as Resfeber Labs Private Limited). Consequently, the shareholding of your Company and its subsidiaries in Porter taken on a fully diluted basis stood at 30.8% for the Company, 2.5% for Mahindra & Mahindra Financial Services Limited and 6.9% for Mahindra Trucks and Buses Limited. Your Company has been keen to grow its presence in the shared mobility logistics solutions space which is an identified area of strategic interest for your Company. During the year, your Company along with the key financial investors of Porter invested Rs. 69 crores in Porter, of which your Company invested Rs. 37.5 crores. Further to this in April, 2020, Lightstone Fund SA, a private equity investor invested Rs. 140 crores in Porter. As a result of the aforesaid equity investments in Porter, the shareholding of your Company and its subsidiaries in Porter taken on a fully diluted basis is 26.6% for the Company, 2.1% for Mahindra & Mahindra Financial Services Limited and 4.8% for Mahindra Trucks and Buses Limited.

Investment in Zoomcar

Your Company has been keen to invest in the shared mobility space as part of its strategy to promote and participate in sustainable mobility solutions, including multi modal urban mobility, with the objective of enabling improved livelihoods and lifestyles of people enabling them to RISE. As a part of this, in Financial Year 2017-18, your Company invested in Zoomcar India Private Limited (Zoomcar India) which is a leading self-drive car rental company based out of Bengaluru, India and had been 100% owned by Zoomcar Inc. a holding company incorporated in the USA. Your Company subscribed to Compulsory Convertible Preference Shares (CCPS) of Zoomcar India which are ultimately convertible into Preferred Stock of Zoomcar Inc. Besides this, Mahindra Overseas Investment Company (Mauritius) Limited (MOICML), a wholly owned subsidiary of your Company invested in Zoomcar Inc. The effect of this investment, by your Company and MOICML, on an aggregate as-converted to common stock of Zoomcar Inc. basis resulted in your Company and MOICML together holding 16.8% of the Common Stock of Zoomcar Inc. on a fully diluted basis. Further to the above, during the year under review, your Company invested Rs. 18.8 crores and subscribed to Optionally Convertible Debentures of Zoomcar India, which are ultimately convertible into Preferred Stock of Zoomcar Inc. In the interim and during this period, other existing and external investors have been participating in Zoomcar India and Zoomcar Inc. Post this investment, on an aggregate as-converted to common stock of Zoomcar Inc., your Company and MOICML together hold 16.1% of the Common Stock of Zoomcar Inc. on a fully diluted basis for an aggregate investment of around Rs. 196.8 crores.

Investment in Gamaya SA, Switzerland

Your Company acquired 11.25% stake (on a fully diluted basis) in Gamaya SA by subscribing to equity and preferred shares in June, 2019 for an investment of CHF 4.3 million (Rs. 30.2 crores). Gamaya SA is a start-up based in Switzerland focused on precision agriculture solutions. This investment in Gamaya SA is expected to support the Company's businesses by developing precision agriculture technology and solutions for its customers.

Investment in MITRA Agro Equipments Private Limited

During the year, your Company increased its shareholding in MITRA Agro Equipments Private Limited ("MITRA"), from 27% to 40%, for an aggregate consideration of Rs. 7.1 crores. MITRA is engaged in the business of designing, developing, manufacturing, assembling, and selling orchard sprayers. The purchase of additional equity shares in MITRA would support the Company's Farm Equipment Sector's growth in the horticulture sector.

Acquisition of balance 49% stake in Peugeot Motocycles

During the year, your Company increased its shareholding in Peugeot Motocycles (PMTC), from 51% to 100%, by acquiring 49% equity stake in PMTC from Groupe PSA in November, 2019. PMTC is the oldest brand in the two-wheeler space in the world and is head-quartered in Mandeure, France.

Transfer of assets of MyAgriGuru and Samriddhi from Mahindra Agri Solutions Limited (MASL) to Mahindra and Mahindra Limited (M&M)

During the year, the Company acquired certain tangible and intangible assets pertaining to MyAgriGuru and Samriddhi from Mahindra Agri Solutions Limited (MASL), its subsidiary company for an aggregate consideration of Rs. 17.7 crores. This transfer helped to integrate the precision agriculture and farming-as-a-service (FaaS) businesses under a single umbrella.

D. INTERNAL FINANCIAL CONTROLS

The Corporate Governance Policies guide the conduct of affairs of your Company and clearly delineates the roles, responsibilities and authorities at each level of its governance structure and key functionaries involved in governance. The Code of Conduct for Senior Management and Employees of your Company (the Code of Conduct) commits Management to financial and accounting policies, systems and processes. The Corporate Governance Policies and the Code of Conduct stand widely communicated across your Company at all 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 Management, no reportable material weakness or significant deficiencies in the design or operation of Internal Financial Controls was observed.

Your Company recognises Internal Financial Controls cannot provide absolute assurance of achieving financial, operational and compliance reporting objectives because of its inherent limitations. Also, projections of any evaluation of the Internal Financial Controls to future periods are subject to the risk that the Internal Financial 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, as required to be provided under Section 134(3)(h) of the Companies Act, 2013 are disclosed in Form AOC-2 as Annexure II and forms part of this Annual Report.

The Policy on Materiality of and Dealing with Related Party Transactions as approved by the Board is uploaded on the Company's website and can be accessed at the Web-link: https://www.mahindra.com/resources/ FY20/AnnualReport.zip

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.

Secretarial Audit of Material Unlisted Indian Subsidiary

Mahindra Vehicle Manufacturers Limited ("MVML"), a material subsidiary of the Company undertakes Secretarial Audit every year under Section 204 of the Companies Act, 2013. The Secretarial Audit of MVML for the Financial Year 2019-20 was carried out pursuant to Section 204 of the Companies Act, 2013 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Secretarial Audit Report of MVML submitted by Mr. Sachin Bhagwat, Practicing Company Secretary, 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 2019-20 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 at Annexure IV to this Board's Report.

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 2019-20.

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 2020-21 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 has discontinued acceptance of Fixed Deposits with effect from 1st April, 2014.

All the deposits from public and Shareholders had already matured as at 31st March, 2017. The total outstanding 23 deposits of Rs. 9.79 lakhs from the public and shareholders as at 31st March, 2020, 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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 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. Pawan Goenka – Managing Director and Chief Executive Officer. Dr. Pawan Goenka was appointed as the Chief Executive Officer with effect from 1st April, 2020.

(c) Dr. Anish Shah – Deputy Managing Director and Group Chief Financial Officer (appointed with effect from 1st April, 2020).

(d) Mr. Rajesh Jejurikar, Executive Director (Auto and Farm Sectors) (appointed with effect from 1st April, 2020).

(e) Mr. Narayan Shankar – Company Secretary.

Mr. V S Parthasarathy ceased to be the Chief Financial Officer of the Company with effect from 1st April, 2020.

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

During the year, M&M Employees Welfare Fund No. 1 sold 18,32,000 equity shares of Rs. 5 each and M&M Employees Welfare Fund No. 2 sold 9,52,000 equity shares of Rs. 5 each of the Company in compliance of Regulation 26(2) read with Regulation 31(2)(b)(ii) of SEBI (Share Based Employee Benefits) Regulations, 2014.

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/FY20/AnnualReport.zip

Particulars of Employees and related disclosures

The Company had 372 employees who were in receipt of remuneration of not less than Rs. 1,02,00,000 during the year ended 31st March, 2020 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/FY20/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 V to this Report.

Industrial Relations

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

Your Company's focus continues towards propagating proactive and employee centric practices. The transformational work culture initiative 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, cultural diagnostics projects, transformational work culture projects, e-compliance, e-portal for reward and recognition of associates, and Code of Conduct for associates. The Transformational Work Culture Committee (TWCC) leads the design and implementation of these programs.

With the objective of developing skills 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, and programs on union leadership development.

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, associates from your Company have participated at various international skill competitions which include WorldSkills 2019 and Beijing Arc Cup. 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'.

In an endeavor to improve quality, reduce cost, ensure safety and improve productivity, your Company's shop floor associates generated on an average 18 ideas per person.

Significant emphasis was also laid towards raising awareness on health and wellness of employees through annual medical check-ups and 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 2019-20 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 to incorporate the new standard ISO: 45001. The leadership's commitment towards SOH&E, is demonstrated through inclusion of many new compliances along with its voluntary commitments. Implementation of various initiatives under the policy and achievement to set objectives were assessed through management reviews.

At each Plant location, annual events were organised and commemorated like Road Safety Week, National Safety Day/ Month and Fire Service Week. Accelerated Learning Programs (ALP) were deployed to train employees on Safety, Health and Environment. Similarly, ALPs were deployed for suppliers, with special focus on fire load reduction. The training programs leveraged virtual reality techniques to enhance learning.

To strengthen the safety practices, the Company continues to focus on Behaviour Based Safety (BBS) Level 2. Additionally, your Company introduced 14 new safety standards for standardisation in the M&M group companies, which are under implementation across all plants.

Your Company carried out statutory safety audits, Fire Equipment Audit, Risk Assessment as per updated safety standards. For the year under review, your Company achieved substantial reduction in the fire load, resulting in reduction in fire incidences. The initiatives in this space include installation of modern equipment, substituting stores packaging material in critical areas and relocation of flammable material as appropriate. In line with the ‘Go Green' philosophy, your Company is continuously adopting new techniques to eliminate and minimise the overall environmental impact. Towards this objective, various projects have been implemented by your Company in air, water - waste water management, solid waste management, Plastic waste recycling management and E-waste management. Further, your Company has initiated implantation of ‘tri-generation project', a first in India. Many of these initiatives are also extended to the supplier community by your Company. During the year under review, your Company signed agreements with Extended Producer Responsibility Organizations (EPRO) recognised by Pollution Control Boards. This agreement covers 100% integral plastic waste management (M&M plants, Suppliers & Dealers). Your Company implemented Central Ground Water Authority (CGWA) regulations for ground water management. This has helped your Company to improve water neutrality, by way of reduction in freshwater requirement.

Your Company continued the commitment to improve the wellbeing of employees and contract associates through various activities under project ‘Parivartan'. This includes activities like fitness improvement challenge (MRise), Mindfulness, Mega event of Mahindra Marathon, Dhyan Yoga, Zumba, medical check-ups, health consultation, nutrition month along with consultation and counselling on Special diet for all employees. As a result of many initiatives, the average Health index of its employees has improved as compared to previous year. Further, all locations observed World Health Day, World Heart Day, World Kidney Day and World Diabetes Day. To create awareness among society at large, your Company has installed a display screen that displays real time readings for all air quality parameters. This screen is installed just outside the manufacturing plant in Mumbai, which is located on the Western Express highway with high density vehicular traffic. In addition, awareness is generated amongst all stakeholders by observing on an annual basis: World Ozone Day, World Environment Day, World Earth Day, World Water Day and Energy Conservation Week and Water Conservation Week.

Certifications/Recertifications

All Plants of your Company are in the process of certification under standard ISO 45001: 2018 and recertification of ISO 14001: 2015. Further, all plants are in the process of implementing, Integrated Management System (IMS), along with adopting the updated standard ISO 45001:2018.

The Company revises its targets under SOH&E year on year, and the performance against these targets are reviewed periodically by senior management. Focused initiatives involving all stakeholders coupled with management reviews have helped to improve the SOH&E performance of your Company in the period 2019-20.

K. BOARD & COMMITTEES

Directors

As mentioned in the previous Annual Report, at the 73rd Annual General Meeting held on 7th August, 2019, Dr. Vishakha N. Desai was re-appointed as an Independent Director for a period commencing from 8th August, 2019 to 30th April, 2024 and Mr. Vikram Singh Mehta was also re-appointed as an Independent Director for a period commencing from 8th August, 2019 to 7th August, 2024.

Further, Mr. Vijay Kumar Sharma was appointed as a Non-Executive Non-Independent Director representing Life Insurance Corporation of India at the 73rd Annual General Meeting held on 7th August, 2019, liable to retire by rotation.

Mr. R. K. Kulkarni and Mr. Anupam Puri ceased to hold office as Independent Directors of the Company from 8th August, 2019, upon completion of their tenure as approved by the Shareholders at the 68th Annual General Meeting of the Company.

The Board of Directors of the Company on the basis of recommendation by GNRC and after taking into account the external business environment, business knowledge, acumen and experience of Mr. Haigreve Khaitan and Ms. Shikha Sharma recommended to the Shareholders their appointment as Independent Directors. The Shareholders at the 73rd Annual General Meeting held on 7th August, 2019 approved the appointment of Mr. Haigreve Khaitan and Ms. Shikha Sharma for a period of 5 years commencing from 8th August, 2019 to 7th August, 2024 to hold office as Independent Directors of the Company, not liable to retire by rotation on the Board of the Company.

Independent Directors

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

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 1 (one) year 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 except Dr. Vishakha N. Desai, are exempt from the requirement to undertake online proficiency self assessment test. Dr. Vishakha N. Desai will be undertaking the said test in due course.

Completion of tenure of Independent Directors

Mr. M. M. Murugappan and Mr. Nadir B. Godrej would cease 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.

Mr. M. M. Murugappan, joined the Board in 1992. He has been Chairman of the Governance, Nomination and Remuneration Committee and Research & Development Committee and Member of Audit Committee and Risk Management Committee of the Board.

The Board placed on record its deep appreciation of the invaluable counsel rendered by Mr. Murugappan to the Company and his contribution in guiding and supporting the Management during his tenure as an Independent Director on the Board of Directors of the Company. His inputs were valuable across all functions of the Company, but in particular, his mentoring of the Board's Research & Development Committee was especially appreciated by the Company's Management.

Quote from Executive Chairman

"Mr. Murugappan, (fondly known as "Murugu") who joined the Board in 1992 has added great value to its deliberations during his tenure. Being an industrialist himself, he always brought a commercial mindset to his position. His strong focus on reliable data, facts and industry trends contributed greatly to the robustness of decision making while framing, evaluating and executing strategies of your Company.

Several senior leaders were due to retire in 2020. As Chairman of the Governance, Nomination and Remuneration Committee (‘GNRC'), Murugu played a vital role in the delicate task of crafting the succession plan. Under his leadership, the Committee planned and implemented a structured and comprehensive succession-planning program and a rigorous review for an orderly succession to the Board and to Senior Management positions. The succession-planning program was approved by the Board and rolled out in December, 2019.

As a Member and later on as Chairman of the Research & Development Committee, he guided and mentored the Management to focus on product design and development. His insistence on developing high calibre talent including lateral talent in the Research & Development Department, helped your Company to remain competitive and keep pace with the ever changing tastes and preferences of customers in the auto industry.

Murugu is a versatile personality with a rare combination of talent and humility. I am grateful for his counsel and friendship. Even though his term as a Director is ending, I count on him for his continuous availability and support. I wish him many years of good health and happiness."

Mr. Nadir B. Godrej, joined the Board in 1992 and has shared his vast knowledge and experience with us over many years. He has been a Member of the Governance, Nomination and Remuneration Committee, Audit Committee, Risk Management Committee, Strategic Investment Committee and Research & Development Committee of the Board.

The Board placed on record its deep appreciation of the invaluable counsel rendered by Mr. Godrej to the Company. The 28 years that Mr. Godrej was on the Board of the Company were critical years in the Company's history.

Mr. Godrej's immense knowledge and financial expertise helped the Board and the Company navigate through the sweeping changes with boldness while at the same time adhering strictly to sound financial discipline and ethical and corporate values of the highest order.

Quote from Executive Chairman

"Mr. Nadir Godrej joined the Board in 1992. His skills as an industrialist and distinguished business strategist combined with his financial acumen, global mindset and high standards of ethics and integrity made him a highly valued member of the Board.

His incisive mind enabled him to unearth important insights by quickly cutting through the clutter and converting it into meaningful analysis. I was particularly impressed by his ability to quickly aggregate operational and financial data, thus elevating the discussion to the next level, facilitating strategic decision making.

He has laid down uncompromising standards of ethics. As a member of the Board and various Committees, Nadir could raise the bar on governance and ethics without losing sight of commercial aspects. As a Member of the Governance, Nomination and Remuneration Committee he contributed immensely to shaping the succession-planning exercise carried out by the Company, which paved way for an orderly Succession to the Board and to Senior Management positions.

His wise guidance on prudent fiscal management combined with his formidable strategic skills were invaluable to us. Nadir is a valued and a trusted personal friend and I wish him peace and happiness in the years to come."

Re-designation and Re-appointment of Dr. Pawan Goenka, Managing Director

Pursuant to the recommendation of the GNRC, the Board at its Meeting held on 20th December, 2019, approved re-designation of Dr. Pawan Kumar Goenka, Managing Director of the Company as the ‘Managing Director and Chief Executive Officer' with effect from 1st April, 2020 till the end of his current term, i.e., upto 11th November, 2020 and his re-appointment as Managing Director of the Company, liable to retire by rotation, designated as ‘Managing Director and Chief Executive Officer', for a period commencing from 12thNovember, 2020 to 1 st April, 2021 (both days inclusive).

Appointment of Whole Time Directors Dr. Anish Shah

Pursuant to the recommendation of the GNRC, the Board at its Meeting held on 20th December, 2019, appointed Dr. Anish Shah as an Additional Director of the Company with effect from 1st April, 2020 to hold office up to the date of the 74th Annual General Meeting (AGM) of the Company scheduled to be held on 7th August, 2020 and subject to the approval of the Members at the said AGM as Whole time Director of the Company, liable to retire by rotation, designated as ‘Deputy Managing Director and Group Chief Financial Officer' from 1st April, 2020 to 1st April, 2021 (both days inclusive) and as ‘Managing Director and Chief Executive Officer' for a period commencing from 2nd April, 2021 to 31st March, 2025 (both days inclusive).

The Company has received the requisite Notice from a Member in writing proposing his appointment as a Director of the Company.

Mr. Rajesh Jejurikar

Pursuant to the recommendation of the GNRC, the Board at its Meeting held on 20th December, 2019, appointed Mr. Rajesh Jejurikar as an Additional Director of the Company with effect from 1st April, 2020, to hold office up to the date of the 74th AGM of the Company scheduled to be held on 7th August, 2020 and subject to the approval of the Members at the said AGM as a Whole Time Director of the Company, liable to retire by rotation, designated as ‘Executive Director (Auto and Farm Sectors)' for a period of Five Years from 1st April, 2020 to 31st March, 2025 (both days inclusive).

The Company has received the requisite Notice from a Member in writing proposing his appointment as a Director of the Company.

Appointment of Non-Executive, Non-Independent Director Mr. CP Gurnani

Pursuant to the recommendation of the GNRC, the Board at its Meeting held on 20th December, 2019, appointed Mr. CP Gurnani as an Additional Director of the Company with effect from 1st April, 2020, to hold office up to the date of the 74th AGM of the Company scheduled to be held on 7th August, 2020 and thereafter, subject to the approval of the Members at the said AGM, as a Non-Executive Non-Independent Director, liable to retire by rotation.

The Company has received the requisite Notice from a Member in writing proposing his appointment as a Director of the Company.

Retirement by rotation

Mr. Anand G. Mahindra retires by rotation and, being eligible, offers himself for re-appointment at the 74th Annual General Meeting of the Company scheduled to be held on 7th August, 2020.

Performance Evaluation

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

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.

A separate exercise was carried out by the GNRC of the Board to evaluate the performance of individual Directors. The performance evaluation of the Non-Independent Directors and the Board as a whole was carried out by the Independent Directors. The performance evaluation of the Executive Chairman of the Company was also carried out by the Independent Directors, taking into account the views of the Managing Director and Non-Executive Directors. The Directors expressed their satisfaction with the evaluation process. The Independent Directors and Executive Chairman also carried out performance evaluation of the Managing Director of the Company.

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 at the following link: https://www.mahindra. com/resources/FY20/AnnualReport.zip

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 familiarise the new Non-Executive Directors on matters related to the Company's values and commitments. They are also introduced to the organisation 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 developed 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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
• 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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), the Company imparted various familiarisation 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, SEBI Listing Regulations, Taxation and other matters, Presentations on Internal Control over Financial Reporting, Operational Control over Financial Reporting, Prevention of Insider Trading Regulations, SEBI Listing Regulations, Framework for Related Party Transactions, Plant Visit, Meeting with Senior Executive(s) of your Company, etc. Pursuant to Regulation 46, the details required are available on the website of your Company at the web link: https://www. mahindra.com/resources/FY20/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, 2020, 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, 2020 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, 2020; (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, 2020.

Board Meetings and Annual General Meeting

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

During the year 1st April, 2019 to 31st March, 2020, six Board Meetings were held on: 29th May, 2019, 7th August, 2019, 8th November, 2019, 20th December, 2019, 8th February, 2020 and 27th March, 2020. The 73rd Annual General Meeting (AGM) of the Company was held on 7th August, 2019.

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, 2019 re-constituted the Audit Committee and appointed Ms. Shikha Sharma as the Member of the Committee with effect from 8th August, 2019. Mr. R. K. Kulkarni ceased to be the Member of the Committee upon the end of his term. The Committee comprises of four Directors viz. Mr. T. N. Manoharan (Chairman of the Committee), Mr. Nadir B. Godrej, Mr. M. M. Murugappan and Ms. Shikha Sharma. 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. During the year under review, your Company has been conferred the coveted Golden Peacock Global Award for Excellence in Corporate Governance for the year 2019 by the Institute of Directors (IOD) and the National Award for Excellence in Corporate Governance in Listed segment: Large Category for 2019 by the Institute of Company Secretaries of India. Both these Awards validate your Company's ‘Best in Class' corporate governance practices and reflect its transparent and ethical dealings with stakeholders across the entire value chain.

A Report on Corporate Governance along with a Certificate from the Statutory Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report.

Vigil Mechanism

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

Whistle Blower Policy of your Company is available on the Company's website and can be accessed at the Web-link: https://www.mahindra.com/resources/FY20/ AnnualReport.zip

Further details are available in the Report on Corporate Governance that forms part of this Annual Report.

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) 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. 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 Internal Complaints Committee under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. During the year under review, 2 complaints with allegations of sexual harassment were filed and both were disposed-off as per the provisions of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. No complaint was pending as of 31st March, 2020.

Business Responsibility Report

The ‘Business Responsibility Report' (BRR) of your Company for the year 2019-20 forms part of this Annual Report as required under Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

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

Risk Management

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

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

Your Company has developed and implemented a Risk Management Policy which is approved by the Board. The Risk Management Policy, inter alia, includes identification 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 organisation.

M. CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY

Corporate Social Responsibility (CSR)

Your Company continues to focus its Corporate Social Responsibility (CSR) initiatives to drive positive and sustainable change in building resilient communities. Resilience was tested at the end of the Financial Year 2020 marked by the COVID-19 crisis. The crisis is testing the world's capability to respond to a pandemic at a time when the world is already grappling with acute inequalities based on gender, class, access to livelihood opportunities, amongst others. With the socio economic impacts of the pandemic hitting vulnerable and marginalised groups particularly hard, there was a need for businesses to step up to support communities in need. Swiftly responding to this, your Company extended its support to the efforts of the Government machinery by responding to the crying need for products required to fight the COVID crisis. Accordingly, a decision was taken to use the Company's manufacturing facilities to make personal protection equipment e.g. low-cost innovative ventilators, face masks and face shields.

Further, your Company set up a COVID-19 relief fund under the aegis of Mahindra Foundation, to provide relief to those most severely affected by the pandemic e.g. small businesses and traders, workers in the supply chain, and daily wage labourers. Your Company also contributed Rs. 20 crores to the ‘Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund' (PM CARES FUND). Through these initiatives, your Company has not only provided support to the Government agencies but has reached out to a large section of the poor and vulnerable by providing immediate relief. While continuing work towards addressing the COVID-19 crisis, in the next Financial Year, your Company will in accordance with its CSR vision, focus its support on the constituencies of girls, youth and farmers. This will be done through its ongoing CSR programs in the domains of education, public health and environment. Below are some of the ongoing CSR programs that your Company focused on during the Financial Year 2020 and will continue supporting the following:

Project Nanhi Kali supported the education of over 1,74,681 underprivileged girls across India. Of these, 78,437 girls at secondary school level were provided access to digital tablets preloaded with educational content. The Mahindra Group supported the education of 67,337 Nanhi Kalis of which 14,462 were supported by your Company.

– The Mahindra Pride Schools, trained 6,045 youth from socially and economically disadvantaged communities across 9 locations and 100% of them were placed in lucrative jobs. Your Company supported the Mahindra Pride Schools in Chandigarh, Srinagar, Varanasi, Hyderabad and two in Chennai which trained 3,641 youth in Financial Year 2020. Further, the Mahindra Pride Classrooms (MPC) provided training to 1,01,391 youth from 856 ITIs, Polytechnics, Arts and Science Colleges across 16 states through the Mahindra Pride Classrooms module. Your Company supported the training of 71,248 MPC students.

– Over 3,383 students 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 meritorious and deserving students to study at the Mahindra United World College in Pune.

– Through Mahindra Hariyali, the Mahindra Group planted 1.52 million trees, which contributed to building green cover and protecting biodiversity in the country. Of these, 1.13 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. Of the 1.52 million, the plantation of 1.32 million trees was done by your Company. The average survival rate of trees planted was 96% in the Araku Valley and above 80% for other locations.

– The Integrated Water Management Program (IWMP) is a Public Private Partnership (PPP) with Government of Madhya Pradesh at Bhopal and with National Bank for Agriculture and Rural Development (NABARD) at Hatta. In Financial Year 2020, the project benefitted 38,447 people in 48 villages, as increased water availability led to improved agricultural productivity and increased farmer income.

– Through the Wardha Farmer Family Project and Krishi Mitra Project your Company continued to support small and marginal farmers by training them in effective farming practices including soil health, crop planning, creating model farms with bio-dynamic farming practices, and increasing the water table with a view to increasing crop productivity.

– Rise for Safe Roads: The first of its kind in India ‘Road Safety' project aims to make the Mumbai Pune Expressway a near ‘Zero Fatality Corridor' by 2021. The interventions are 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.

– ESOPs (Employee Social Options) - In Financial Year 2020, 91,943 ESOPs volunteers from the Mahindra Group contributed 6,93,305 person-hours for various social initiatives. Of these, Company's 22,877 employees contributed 1,63,818 person-hours giving back to the Society.

Mahindra continues its work on building strong communities that are equipped to cater to its most vulnerable sections of Society. During the last Financial Year, as acknowledgment for its CSR initiatives impact, your Company received the following awards (from the Ministry of Corporate Affairs, GOI) and recognition:

• Winner of the ‘National CSR Award 2018' in the category ‘Corporate Award for Excellence in CSR'.
• Winner of the ‘National CSR Award 2018' in the category ‘Contribution to National Priority Area Agriculture and Rural Development' (For Project Integrated Watershed Management in MP).
• Honourable Mention for the ‘National CSR Award 2018' in the category ‘Contribution to National Priority Area Education' (For Project Nanhi Kali).
• Mahindra Group was recognised in the Limca Book of Records for the India Record of "Most trees planted".

CSR Policy

The Corporate Social Responsibility Committee had formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) which was subsequently adopted by it and is being implemented by the Company. The CSR Policy including a brief overview of the projects or programs undertaken can be accessed at the Company's website through the Web-link: https:// www.mahindra.com/resources/FY20/AnnualReport.zip

CSR Committee

The Board at its Meeting held on 7th August, 2019 re-constituted the Corporate Social Responsibility Committee. Mr. R. K. Kulkarni ceased to be the Member of the Committee upon end of his term. The CSR Committee comprises of Dr. Vishakha N. Desai (Chairperson), Mr. Anand G. Mahindra, Dr. Pawan Goenka and Mr. Vikram Singh Mehta. The Committee, inter alia, reviews and monitors the CSR as well as Sustainability activities.

During the year under review, your Company spent Rs. 126.59 crores on CSR activities. The amount equal to 2% of the average net profit for the past three financial years required to be spent on CSR activities was Rs. 106.56 crores. The detailed Annual Report on the CSR activities undertaken by your Company in Financial Year 2020, is annexed herewith marked as Annexure VI.

Sustainability

During the year under review, the 12th Sustainability Report for the year 2018-19 was released. The Report was externally assured by KPMG and prepared in accordance with the GRI Standards - Core option.

By implementing Mahindra Sustainability Framework, your Company continued the focus on the Environmental, Social and Governance (ESG) parameters ensuring a common language for sustainability across the Group. This framework defines sustainability as "Building enduring businesses by rejuvenating the environment and enabling stakeholders to rise". Under the three pillars People, Planet and Profit of Sustainability Framework; various actions have been implemented across the Group.

Your Company has received an approval of Science Based Target, a commitment to restrict average global temperature rise in alignment of Paris Climate Change Agreement. As an environmental best practice, the Company is actively working towards making the locations certified for Zero Waste to Landfill (ZWL). During the year, Mahindra Research Valley, Spares Business Unit - Kanhe, Swaraj Plant 2, Mahindra Towers - Worli and IT Center Building at Kandivli got certified.

Group Sustainability Council conducted its 50th meeting during the year. Ms. Renata Lok- Desallien, United Nations resident coordinator of India was the special guest.

Mr. Anand G. Mahindra, Executive Chairman of your Company who is also a Board member of the United Nations Global Compact launched report of the High-Level Commission on Carbon Pricing and Competitiveness at the United Nation's Climate Action Summit in New York on 23rd September, 2019.

The Sustainability performance for your Company for the Financial Year 2019-20 will be elaborated in detail in the GRI Report which is under preparation and will be ready for release shortly.

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

• Recognising as one of the India Climate Change Rising Stars 2019 in Carbon Disclosure Project (CDP).
• Receiving Bronze medal in S & P Global Sustainability yearbook 2020 and part of Dow Jones Sustainability Emerging Market Index.
• Igatpuri plant winning the ‘Sustainable Factory of the Year Award' and ‘Jury award for Zero Waste to Landfill' at India Sustainability Leadership Summit 2019.
• Winning the prestigious Business Vision ‘Best Corporate Governance – India 2019' Award.
• Winning the prestigious Golden Peacock Global Award for Excellence in Corporate Governance for 2019.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure VII and forms part of this Report.

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 2020 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, an extract of the Annual Return as on 31st March, 2020 in Form No. MGT-9 is attached as Annexure VIII and forms part of this Report.

The Annual Return of the Company has been placed on the website of the Company and can be accessed at https://www.mahindra.com/resources/FY20/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.

For and on behalf of the Board
ANAND G. MAHINDRA
Executive Chairman
Mumbai, 12th June, 2020

   

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