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Mahindra & Mahindra Ltd.

BSE: 500520 Sector: Auto
NSE: M&M ISIN Code: INE101A01026
BSE 15:40 | 16 Feb 743.75 -6.80






NSE 15:52 | 16 Feb 743.75 -5.60






OPEN 750.55
VOLUME 319149
52-Week high 802.80
52-Week low 612.50
P/E 25.30
Mkt Cap.(Rs cr) 92,463
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 750.55
CLOSE 750.55
VOLUME 319149
52-Week high 802.80
52-Week low 612.50
P/E 25.30
Mkt Cap.(Rs cr) 92,463
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Mahindra & Mahindra Ltd. (M&M) - Director Report

Company director report

Dear Shareholders

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


(Rs. in crores)

2017 2016
Revenue from Operations 47096 43639
Other Income 1342 850
Profit before Depreciation Finance
Costs Exceptional items and Taxation 6112 5470
Less: Depreciation and Amortisation expense 1327 1068
Profit before Finance Costs
Exceptional items and Taxation 4785 4402
Less: Finance Costs 146 186
Profit before Exceptional items and
Taxation 4639 4216
Add: Exceptional items 548 68
Profit before Taxation 5187 4284
Less: Tax Expense 1231 1079
Profit for the year 3956 3205
Balance of profit for earlier years 17904 15442
Less: Transfers from retained earnings 14 3
Add: Transfers to retained earnings 100
Profits available for appropriation 21846 18744
Add: Other Comprehensive Income / (4) 7
Less: Dividend paid on Equity Shares 745 745
Less: Income-tax on Dividend paid 96 102
Balance carried forward 21001 17904

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

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

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

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

However even amidst this scenario your Company recorded an increaseof 7.92% in revenue from operations at Rs. 47096 crores in the year under review asagainst Rs. 43639 crores in the previous year.

The Profit for the year before Depreciation Finance Costs Exceptionalitems and Taxation recorded an increase of 11.74% at Rs. 6112 crores as against Rs. 5470crores in the previous year. Profit after tax increased by 23.43% at Rs. 3956 crores asagainst Rs. 3205 crores in the previous year.

Your Company continues with its rigorous cost restructuring exercisesand efficiency improvements which have resulted in significant savings through continuedfocus on cost controls and process efficiencies thereby enabling the Company to maintainprofitable growth in the current economic scenario. No material changes and commitmentshave occurred after the closure of the Financial Year 2016-17 till the date of thisReport which would affect the financial position of your Company.

Performance Review

Automotive Sector

Your Company's Automotive Sector recorded total sales of 506624vehicles (452893 four-wheelers and 53731 three-wheelers) as against a total of 494096vehicles (437911 four-wheelers and 56185 three-wheelers) in the previous yearregistering a growth of 2.5% in vehicle sales.

On the domestic sales front your Company sold a total of 469384vehicles as compared to 458065 vehicles in the previous year resulting in a growth of2.5%.

In the Passenger Vehicle segment your Company's volumes remainedalmost flat at 236130 vehicles [including 222541 Utility Vehicles (UVs) 10370 Vansand 3219 Cars] as compared to the previous year's volume of 236307 vehicles[including 222324 UVs 10588 Vans and 3395 Cars].

In the Commercial Vehicle (CV) segment your Company sold 180948vehicles [including 30043 vehicles < 2T GVW

136564 vehicles between 2-3.5T GVW 7626 Light Commercial Vehicles(LCVs) in the LCV > 3.5T segment and 6715 Heavy Commercial Vehicles (HCVs)]registering a growth of 8.5% over the previous year's volume of 166783 CV[including 27834 vehicles < 2T GVW 126819 vehicles between 2-3.5T GVW 6425 LCVsin the LCV > 3.5T segment and 5705 HCVs].

In the three-wheeler segment your Company sold 52306 three-wheelersregistering a de-growth of 4.9% over the previous year's volume of 54975three-wheelers.

For the year under review the Indian automotive industry (except2-Wheeler) grew 6.5% with the Passenger Vehicle (PV) industry growth of 9.2% and recordsales crossing the three million mark. The CV industry grew 4.2% with the LCV 2-3.5T (PUsegment) posting the highest ever sales of 0.2 million and taking 29% share of the totalCV industry. However the Medium and Heavy Commercial Vehicles (MHCV) segmentremained flat at a volume of 0.3 million. The

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

Your Company's UV sales volume remained flat at 222541 vehiclesresulting in an UV market share of 29.2% as against 37.9% in the previous year. YourCompany's UV sales were adversely impacted in the first third quarter and the earlyfourth quarter of the Financial Year 2017.

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

Scorpio continues to enhance its iconic status and the demand forScorpio remained strong at 49319 vehicles a growth of 2.6% over the previous year.

Bolero has been a very successful brand for your Company over the last10 years and in September 2016 your Company launched the new Bolero Power+ with themHawkD70 engine. The all New Bolero Power+ is an evolution of the Bolero brandwith an enhanced value proposition delivering more power mileage and a peppier drive.

In the LCV<2T segment riding on the success of Jeeto yourCompany's volumes grew 7.9% and the market share strengthened to 25.7% as against23.9% in the previous year. To further strengthen its presence in this segment yourCompany launched the Supro Minitruck and Supro cargo van in February 2017.

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

In February 2016 your Company launched the Blazo series of heavycommercial (HCV) trucks with Fuelsmart technology. The Blazo series of trucks are backedby a superior mileage guarantee and a 48 hours service guarantee. For the year underreview your Company extended the Blazo range of trucks from 25 to 49 Tons and the trucksare well received by the customer. The total HCV sales for the year stood at 6715trucks clocking a 17.7% growth. The market share of the HCV segment stood at 4.0% ascompared to 3.4% in the previous year.

During the year under review your Company posted the highest everexport volumes of 37240 vehicles as against the previous year exports of 36031 vehiclesa growth of 3.4%.

Your Company continued to grow in volumes and strengthen its presencein the neighbouring markets of Sri Lanka Nepal and Bangladesh. With continued efforts ofbuilding its brand in key markets like South Africa and Chile your Company reported avolume growth of 28.9% and 28.3% respectively. For the year under review the KUV100 andTUV300 were launched in South Africa.

The spare parts sales for the year stood at Rs. 1937.2 crores(including Exports of Rs. 115.6 crores) as compared to Rs. 1765.3 crores (includingExports of Rs. 110.3 crores) in the previous year registering a growth of 9.7%.

Farm Equipment Sector

Your Company recorded a total sales of 263021 tractors as against214173 tractors sold in the previous year thus recording a growth of 22.8%.

For the year under review the tractor industry in India recorded salesof 582084 tractors recording a growth of 18%. A normal monsoon good increase in minimumsupport prices and Government's focus on Agriculture and rural development helpeddrive the positive sentiment in the Agriculture Sector and the rural economy at large.This positive sentiment and the pent-up demand due to two consecutive years of industryde-growth in the Financial Years 2015 and 2016 helped boost the demand for tractors inthe Financial Year 2017.

Your Company sold 248594 tractors in the domestic market in the year2016-17 as compared to 202628 tractors in the previous year recording a growth of22.7%. Your Company gained market share by 1.8% taking the total market share to 42.7%which is the highest ever market share.

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

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

During the year under review your Company exported 14583 (including156 Completely Knocked Down Units) tractors registering a growth of 26.3% over theprevious year. This is the highest ever tractor exports by your Company. Spare parts salesfor the year stood at Rs. 530.7 crores (including exports of Rs. 43.8 crores) as comparedto Rs. 476.5 crores (including exports of Rs. 34.8 crores) in the previous yearregistering a growth of 11.4%.

Other Businesses

In the power generation space under the Mahindra Powerol Brand yourCompany continues to be amongst the leaders in the industry for over a decade. YourCompany earned its highest ever revenues of Rs. 1204.9 crores in the current FinancialYear as against Rs. 1109.9 crores in the previous year recording a growth of 8.6%. Witha focus on changing customer needs your Company has further expanded the business in Teleinfra management and in the energy management solutions space. Amidst growing concerns onenvironmental sustainability your Company took a step towards moving to greenersolutions by venturing into a new business of ‘Green Gensets' through batterybased solutions.

Current Year's review

During the period 1st April 2017 to 29th May2017 63251 vehicles were produced as against 60164 vehicles and 60052 vehicles weredespatched as against 57697 vehicles during the corresponding period in the last year.During the same period 49425 tractors were produced and 49154 tractors despatched asagainst 44730 tractors produced and 44778 tractors despatched during the correspondingperiod in the previous year.

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

Monsoon is forecast to be normal for the second consecutive year whichbodes well for demand recovery. Moreover the ongoing remonetisation process and laggedeffect of past rate cuts along with a further reduction in banks' lending rates willaid discretionary consumer spending and growth recovery.

Focused expenditure especially on the rural economy and affordablehousing implementation of Goods and Services Tax (GST) and steps to attract higherforeign direct investment (FDI) will also be supportive of growth. Importantlynotwithstanding initial challenges GST implementation entails sustained positive gainsfor the economy in the long term.

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


Financial Year 2016-17 was a turbulent year for the world economy withevents namely Brexit US Presidential elections and Italian political reform referendumwhich not only caused volatility during the year but also has the potential to haveramifications in the years to come. US economy continued showing signs of steady recoveryand encouraging job growth which led the US Federal Reserve to hike interest rates twotimes in Financial Year 2016-17 by a cumulative 50 bps. Despite the political noise theeconomic recovery in Eurozone was encouraging with growth picking up in the second half of2016 which led the ECB to start tapering its quantitative easing program since December2016. Economic sentiment in Eurozone reached a nearly six-year high in February 2017.Growth also remained solid in the United Kingdom where spending proved resilient in theaftermath of Brexit.

Growth prospects for emerging market economies have also improved withreduced concerns on China's hard landing due to policy stimulus. Furtherrecessionary conditions also ebbed in Russia and Brazil due to firming up of commodityprices. Crude prices which touched a 13 year low in January 2016 rebounded duringFinancial Year 2016-17 as oil producing nations agreed on output cuts. However globaltrade remains subdued due to an increasing tendency towards protectionist policies andheightened political tensions. The latest World Economic Outlook by IMF predicts theGlobal economic activity to pick up with a long-awaited cyclical recovery in investmentmanufacturing and trade projects.

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

With positive macro-economic indicators commitment to fiscal andmonetary reforms and political stability India continued to be a bright spot for globalinvestors. Foreign Direct Investment (FDI) in Financial Year 2016-17 touched a record highof USD 60.1 billion. For the first time since the opening up of the economy in 1991India's current account deficit is being funded by FDI a sign of rising confidenceamong long term investors. The Indian Rupee displayed two-way movements up to mid-January2017 but since then has appreciated on resumption of portfolio inflows in both the debtand equity segments.

CPI inflation remained firmly anchored within RBI's target rangewhich prompted them to reduce repo rates by a cumulative of 50 bps in Financial Year2016-17. However the persistence of core inflation implementation of 7th paycommission and rise in global commodity prices led the RBI to undertake a calibrated shiftin their policy stance from accommodative to neutral towards end of the Financial Year.Following the announcement of demonetisation in November 2016 there was a huge surge inbanking sector liquidity impelling the Banks to reduce their lending rates and finallytransmitting the policy rate cuts by the RBI over the last two years to the consumers.

Your Company continued to focus on managing cash efficiently andensured that it had adequate liquidity and back up lines of credit. During the year yourCompany repaid Rs. 1083.62 crores of long term borrowings from internal accruals.

During the year your Company raised Rs. 475 crores by way of privateplacement of 7.57% Listed Senior Unsecured Redeemable Non-Convertible Debentures with a10 years' maturity. In addition Euro 50 million was raised by way of ExternalCommercial Borrowings for 5 years. The above borrowings were raised to part finance itsongoing modernisation and expansion programmes. In addition your Company also availedexport finance of Rs. 605 crores out of which Rs. 305 crores was under the interestequalization scheme of Government of India.

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

Your Company has been rated by CRISIL Limited ("CRISIL")ICRA Limited ("ICRA") India Ratings and Research Private Limited ("IndiaRatings") and Credit Analysis & Research Limited ("CARE") for itsBanking facilities under Basel II norms. All have re-affirmed the highest credit ratingfor your Company's Short Term facilities. For Long Term facilities andNon-Convertible Debenture ("NCD") programme CRISIL and ICRA have re-affirmedtheir credit ratings of CRISIL AAA/ Stable and [ICRA]AAA (stable) respectively. FurtherCARE has also re-affirmed the ratings of the Company's long-term Bank facilities atCARE AAA. India Ratings and Research (Ind-Ra a Fitch Group Company) has also re-affirmedLong-Term Issuer Rating of ‘IND AAA' with a Stable outlook to your Company. Withthe above rating affirmations your Company continues to enjoy the highest level of ratingfrom all major rating agencies at the same time.

The AAA ratings indicate highest degree of safety regarding timelyservicing of financial obligations and is also a vote of confidence reposed in yourCompany's Management by the rating agencies. It is an acknowledgement of the strongcredit profile of your Company over the years resilience in earnings despite cyclicalupturns/downturns robust financial flexibility arising from the significant market valueof its holdings and prudent management.

Investor Relations (IR)

Your Company continuously strives for excellence in its IR engagementwith International and Domestic investors and has set up feedback mechanism to measure IReffectiveness. Structured conference calls and periodic investor/analyst interactionsincluding one-on-one meetings Telepresence meetings participation in investorconferences quarterly earnings calls and annual analyst meet with the Chairman ManagingDirector and Business Heads were organised during the year. Your Company interacted witharound 750 Indian and overseas investors and analysts (excluding quarterly earnings callsand specific event related calls) during the year.

Your Company always believes in leading from the front with emergingbest practices in IR and building a relationship of mutual understanding withinvestor/analysts. As a key milestone in this continuing endeavour your Company createda digital interactive annual review of the Company's performance on theCorporate website to provide an interactive experience beyond what is available in theAnnual

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


Your Directors are pleased to recommend a dividend of Rs. 13 perOrdinary (Equity) Share of the face value of Rs. 5 each payable to those Shareholderswhose names appear in the Register of Members as on the Book Closure Date. Theequity dividend outgo for the Financial Year 2016-17 inclusive of tax on distributedprofits (after reducing the tax on distributed profits of Rs. 44.17 crores on thedividends receivable from the subsidiaries during the current Financial Year) would absorba sum of Rs. 927.62 crores [as against Rs. 841.68 crores comprising the dividend of Rs. 12per Ordinary (Equity) Share of the face value of Rs. 5 each and tax thereon paid for theprevious year]. Further the Board of your Company decided not to transfer any amount tothe General Reserve for the year under review.

Dividend Distribution Policy

The Board of Directors at its Meeting held on 10th August2016 approved the Dividend Distribution Policy containing the requirements mentioned inRegulation 43A of the Securities and Exchange Board of India (SEBI) (Listing Obligationsand Disclosure Requirements) Regulations 2015. The Policy is attached as Annexure I andforms part of this Annual Report.


The Consolidated Financial Statements of the Company and itssubsidiaries prepared in accordance with the Companies Act 2013 and applicableAccounting Standards along with all relevant documents and the Auditors' Report formpart of this Annual Report. The Consolidated Financial Statements presented by the Companyinclude the financial results of its subsidiary companies associates and joint ventures.

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

Subsidiary Joint Venture and Associate Companies

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

Tech Mahindra Limited (TML) the Company's Flagship Company in theIT Sector has reported a consolidated revenue of Rs. 29141 crores in the current year ascompared to Rs. 26494 crores in the previous year an increase of 10%. Its consolidatedprofit after tax is Rs. 2813 crores as compared to Rs. 2993 crores in the previous yeara decrease of 6%.

*The Group's finance company Mahindra & Mahindra FinancialServices Limited (Mahindra Finance) reported a consolidated operating income of Rs. 7146crores during the current year as compared to Rs. 6554 crores in the previous year agrowth of 9%. The consolidated profit after tax for the year is Rs. 512 crores as comparedto Rs. 772 crores in the previous year.

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

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

Mahindra Holidays & Resorts India Limited the subsidiary in thebusiness of timeshare registered a consolidated operating income of Rs. 2282 crores ascompared to Rs. 1602 crores in the previous year an increase of 42%. The consolidatedprofit after tax for the year is Rs. 149 crores as compared to Rs. 87 crores in theprevious year an increase of 71%.

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

Rs. 21153 crores in the current fiscal year as compared to Rs. 20079crores in the previous year a growth of 5%. The consolidated profit after tax for theyear is Rs. 245 crores as compared to consolidated loss of Rs. (166) crores in theprevious year.

The consolidated group profit before exceptional item and tax for theyear is Rs. 5004 crores as against Rs. 4794 crores in the previous year – a growthof 4%. The consolidated profit after tax after non-controlling interest and exceptionalitems for the year is Rs. 3698 crores as against Rs. 3148 crores in the previous year.

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

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

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

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

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

A Report on the performance and financial position of each of thesubsidiaries associates and joint venture companies included in the ConsolidatedFinancial Statement and their contribution to the overall performance of the Company isprovided in Form AOC-1 and forms part of this Annual Report.

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


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

Mahindra Two Wheelers Limited ("MTWL") a step downsubsidiary of your Company is engaged in the businesses of manufacturing and selling oftwo wheelers ("Two Wheelers Business") and trading in spare parts andaccessories ("Spares Business").

MTWL's past business strategy was focused on addressing the masstwo wheeler market. Given the market response MTWL has decided to make a strategy shiftby focusing on the niche premium two wheeler segment. As your Company is present in manysegments of the automotive industry it is envisaged to demerge the Two Wheeler Businessinto your Company. The proposed demerger would enable the Two Wheeler Business to alsobenefit from your Company's R&D and sourcing capabilities. Besides the proposeddemerger of the Two Wheeler Business would enable MTWL to streamline its operations byfocusing on the Spares Business.

To achieve the above a Scheme of Arrangement between Mahindra TwoWheelers Limited and the Company and their respective Shareholders and Creditors("Scheme") was announced by your Company whereby MTWL would demerge the TwoWheeler Business into your Company. The appointed date of the Scheme is 1stOctober 2016. In accordance with the Scheme your Company shall be allotting 463287Ordinary (Equity) Shares of Rs. 5 each to Aay Kay Global and 40601 Ordinary (Equity)Shares of Rs. 5 each to Emerging India Fund the shareholders of MTWL in the shareexchange ratio of 1 fully paid-up Ordinary (Equity) Share of Rs. 5 each of theCompany for every 461 fully paid-up shares held in MTWL.

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

Acquisition of assets of Bramont Montadora Industrial e Comercial deVeiculos S.A.

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

Acquisition of BSA brands for Two Wheeler

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

The BSA brand which has a global appeal will be primarily suited tointernational markets.

Acquisition of 75.1% stake in Hisarlar Makina Sanayi ve Ticaret Anonim uirketiTurkey

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

(equivalent to approximately Euro 18 million) through a capitalincrease. This transaction was completed on 30th March 2017. Hisarlar is a keyplayer in tractor cabins machinery components and agricultural machinery industry. It hadrevenues of Turkish Lira 215 million (approximately Euro 55 million) in 2016 with exportsconstituting approximately 40% of sales. Hisarlar has two production facilities in WesternTurkey and employs approximately 820 people. Hisarlar is the market leader in Turkey inthe soil preparation category of farm implements supported by a distribution network ofnearly 85 dealers across Turkey. This acquisition is an important milestone in yourCompany's globalisation journey.

Sale of 6658565 Equity Shares of Mahindra Holidays & ResortsIndia Limited in the Open Market through Stock Exchange

During this year your Company in order to increase the free float andto unlock part value out of its investments in Mahindra Holidays & Resorts IndiaLimited ("MHRIL") a listed subsidiary of your Company sold around 7.5% of itsholding in MHRIL on the Stock Exchange at an average gross price of Rs. 412.05 pershare resulting in a gain of Rs. 269 crores to your Company. Following this sale theshareholding of your Company has come down from 75% to 67.5% of MHRIL's sharecapital.

Sale of 3275000 shares of Mahindra Sona Limited

As a part of the strategy of your Company to divest from non-coreinvestments your Company sold its entire holding of 3275000 Equity Shares (29.77%) inMahindra Sona Limited ("Mahindra Sona") in favor of the other Promoter ofMahindra Sona namely M Sona Automotive Private Limited for an overall consideration ofRs. 89.32 crores resulting in a profit of Rs. 85.86 crores on sale of thisinvestment in Financial Year 2017.


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

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

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

Your Company has in place adequate internal financial controls withreference to the Financial Statements commensurate with the size scale and complexity ofits operations. Such controls have been assessed during the year under review taking intoconsideration the essential components of internal controls stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting issued by The Institute ofChartered Accountants of India. Based on the results of such assessments carried out byManagement no reportable material weakness or significant deficiencies in the design oroperation of internal financial controls was observed. Nonetheless your Company recognisesthat any internal control framework no matter how well designed has inherent limitationsand accordingly regular audits and review processes ensure that such systems arereinforced on an ongoing basis.

Indian Accounting Standards (Ind AS) – IFRS Converged Standard

Your Company has adopted Indian Accounting Standards ("IndAS") for the accounting period beginning on 1st April 2016 pursuant toMinistry of Corporate Affairs Notification dated 16th February 2015 notifyingthe Companies (Indian Accounting Standard) Rules 2015.


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


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

The policy on Related Party Transactions as approved by the Board isuploaded on the Company's website and can be accessed at the Web-link: investor-reports/FY17/AnnualReports/


Statutory Auditors and Auditors' Report

Messrs Deloitte Haskins & Sells Chartered Accountants (ICAIRegistration No. 117364W) the retiring Auditors have completed the maximum tenure asStatutory Auditors of the Company as provided under the Companies Act 2013 and relevantRules thereunder.

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

The Members are requested to appoint Messrs B S R & Co. LLP asStatutory Auditors of the Company in place of the retiring Auditors Messrs DeloitteHaskins & Sells Chartered Accountants at the ensuing Annual General Meeting for aperiod of 5 years from the conclusion of the ensuing Annual General Meeting till theconclusion of the 76th Annual General Meeting and fix their remuneration.

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

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014the Company has appointed Mr. Sachin Bhagwat Practicing Company Secretary (Certificate ofPractice Number: 6029) to undertake the Secretarial Audit of the Company.

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

Cost Auditors

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

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

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

As per the provisions of the Companies Act 2013 the remunerationpayable to the Cost Auditor is required to be placed before the Members in a GeneralMeeting 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 AnnualGeneral Meeting.

Reporting of Frauds by Auditors

During the year under review the Statutory Auditors Cost Auditors andSecretarial Auditor have not reported any instances of frauds committed in the Company byits Officers or Employees to the Audit Committee under section 143(12) of the CompaniesAct 2013 details of which needs to be mentioned in this Report.


Particulars of the loans given investment made or guarantee given orsecurity provided and the purpose for which the loan or guarantee or security is proposedto be utilised by the recipient of the loan or guarantee or security are provided in NoteNos. 56 4 and 9 to the Financial Statements.


Your Company had discontinued its Fixed Deposit Scheme for 36months with effect from the close of office hours on 31st January 2014and has also discontinued acceptance of Fixed Deposits with effect from 1st April2014.

All the deposits from public and Shareholders had already matured as at31st March 2017. The total of such 126 deposits amounting to Rs. 83.60 lakhshad not been claimed as at the end of the Financial Year. Since then 32 of these depositsof the value of Rs. 15.85 lakhs has been claimed.

There was no default in repayment of deposits or payment of interestthereon during the year under review. There are no deposits which are not in compliancewith the requirements of Chapter V of the Companies Act 2013.

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


Key Managerial Personnel (KMP)

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

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

(b) Dr. Pawan Goenka – Managing Director

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

(d) Mr. Narayan Shankar – Company Secretary

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

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

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

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

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

Employees' Stock Option Scheme

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

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

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

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

3. M&M Employees Welfare Fund No. 1

4. M&M Employees Welfare Fund No. 2

5. M&M Employees Welfare Fund No. 3

There are no material changes made to the above Schemes and theseSchemes are in compliance with the SBEB Regulations. Your Company's Auditors MessrsDeloitte Haskins & Sells have certified that the Company's above-mentionedSchemes have been implemented in accordance with the SBEB Regulations and the Resolutionspassed by the Members for the 2000 Scheme and the 2010 Scheme.

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

Particulars of Employees and related disclosures

The Company had 251 employees who were in receipt of remuneration ofnot less than Rs. 10200000 during the year ended 31st March 2017 or notless than Rs. 850000 per month during any part of the year.

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

Disclosures with respect to the remuneration of Directors KMPs andemployees 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 aregiven in Annexure IV to this Report.

Industrial Relations

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

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

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

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

The Mahindra Skill Excellence initiative is a holistic approach toenhance the skill and capabilities of shop floor associates and has received goodparticipation across manufacturing facilities. As a result of this effort an associatefrom your Company will represent India at the Worlds Skill Competition - Abu Dhabi inAugust 2017. This will be the third year in a row where your Company's associateswill represent India at the World Skills Competition.

In an endeavor to generate ideas towards improving quality reducingcost ensuring safety and improving productivity your Company's shop floorassociates generated about 20 ideas per person.

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

Proactive and employee-centric shop floor practices a focus ontransparent communication of business goals an effective concern resolution mechanismand a firm belief that employees are the most valuable assets of the Company are thecornerstone of your Company's employee relations approach. An ‘open doorpolicy' and constant dialogue to create win-win situations have helped your Companybuild trust and harmony. The Industrial Relations scenario continued to be largelypositive across all the Mahindra

Automotive and Tractor manufacturing locations. Bonus settlements wereamicably agreed upon at all locations. All this resulted in zero production loss in theFinancial Year 2016-17 and helped create a peaceful healthy and collaborative workenvironment.

Safety Occupational Health and Environment

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

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

Objectives and targets from the new revised SOH&E Policy aresupported by focused integrated management programs such as i4 safety safety roundskaizens and mistake proofing projects. Your Company demonstrates a strong leadershipcommitment towards SHO&E and as a part of the same multiple measures and actions areimplemented with thorough competency training programs like Working on height Welding andGas cutting working on LPG/PNG/CNG and Forklift driving.

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

Your Company carried out Statutory safety risk assessmentsquantitative risk analysis electrical safety audits of all facilities absorbing newamended legal requirements. For the year under review your Company initiated a Fire loadreduction program at the Plant level. Your Company's Plants and locations continuedtheir commitment to improve the wellbeing of employees and contract workmen by organisingphysical fitness activities like yoga zumba occupational health examination campsmedical check-ups consultation and counselling. Further all locations observed WorldHealth Day World Heart Day World Kidney Day and World Diabetes Day along withWay2Wellness sessions covering topics like Healthy Heart Diabetes etc.

Various path breaking projects were implemented by your Company in theareas of Air Pollution Management Water and Waste Water Management Solid WasteManagement and new techniques to propagate ‘Go Green' philosophy wereundertaken. These Projects cover elimination/ minimisation of environment impact in linewith current and future environmental challenges prevention of injury ill health and OHSHazards at the first place of their control. Your Company extended the ‘GoGreen' initiatives to its supplier community through Green Supply Chain Managementpractices. Your Company also proactively shared good safety practices with businesspartners. ‘Business Case for Safety' a book published in association with theNational Safety Council and CII was shared with all suppliers. Through stakeholderengagement your Company monitors sustainability development initiatives which includeclimate change mitigation sustainable source use protection of bio-diversity andcertified green building projects with platinum and gold rated facilities at identifiedlocations and reported as per the Global Reporting Initiative (GRI) - G4 Guidelines. WorldEnvironment Day World Earth Day World Water Day and Energy Conservation Week and WaterConservation Week are also observed on an annual basis.


All Plants of your Company have been recertified under the standard ISO14001: 2004 and OHSAS 18001: 2007. Further all Plants are in the process of adopting therevised environmental standard ISO 14001: 2015. All targets under SOH&E are reviewedon a periodic basis through operations reviews conducted by Senior Management. The focusedinitiatives and reviews have helped improve SOH&E performance of your Company by over50% in the period 2016-17.



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

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

Mr. Parekh was appointed as a Director on the Board of the Company witheffect from 29th August 1990. He has made significant contributions towardseffective functioning of the Board and has been acting as the Chairman of the AuditCommittee and Member of the Strategic Investment Committee and Risk Management Committeeof the Company. The Board has placed on record its sincere and deep appreciation of theinvaluable counsel and contribution made by Mr. Parekh to the Company. The 27 years thatMr. Parekh was on the Board of the Company were very eventful and critical years in theCompany's history. Mr. Parekh's immense knowledge financial acumen andexpertise helped the Board and the Company negotiate in these challenging times while atthe same time adhering strictly to sound financial discipline with the highest standardsof Corporate Governance.

Quote from Chairman Emeritus

The Company has received declarations from all the IndependentDirectors of the Company confirming that they meet the criteria of independence asprescribed both under the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

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

A separate exercise was carried out by the Governance Nomination andRemuneration Committee of the Board to evaluate the performance of individual Directors.The performance evaluation of the Non-Independent Directors and the Board as a whole wascarried out by the Independent Directors. The performance evaluation of the Chairman ofthe Company was also carried out by the Independent Directors taking into account theviews of the Executive Director and Non-Executive Director. The Directors expressed theirsatisfaction with the evaluation process.

The details of programs for familiarisation of the IndependentDirectors with the Company their roles rights responsibilities in the Company natureof the industry in which the Company operates business model of the Company number ofprograms and number of hours spent by each Independent Director in terms of therequirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015are available on the Company's website and can be accessed at the Web-link: AnnualReports/

In line with the principles of transparency and consistency yourCompany has adopted the following Policies which inter alia include criteria fordetermining qualifications positive attributes and independence of a Director:

(a) Policy on Appointment of Directors and Senior Management andsuccession planning for orderly succession to the Board and the Senior Management;

(b) Policy for remuneration of the Directors Key Managerial Personneland other employees.

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

Directors' Responsibility Statement

Pursuant to section 134(5) of the Companies Act 2013 yourDirectors based on the representations received from the Operating Management andafter due enquiry confirm that:

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

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

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

(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 Companyand such Internal Financial Controls were operating effectively during the Financial Yearended 31st March 2017; (f) they had devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems wereadequate and operating effectively throughout the Financial Year ended 31stMarch 2017.

Board Meetings and Annual General Meeting

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

During the year 1st April 2016 to 31st March2017 six Board Meetings were held on: 30th May 2016 10th August2016 11th November 2016 3rd December 2016 10thFebruary 2017 and 28th March 2017. The 70th Annual General Meeting(AGM) of the Company was held on 10th August 2016.

Meetings of Independent Directors

The Independent Directors of your Company meet before the BoardMeetings without the presence of the Executive Chairman or the Managing Director or otherNon-Independent Directors or Chief Financial Officer or any other ManagementPersonnel.

These Meetings are conducted in an informal and flexible manner toenable the Independent Directors to discuss matters pertaining to inter alia review ofperformance of Non-Independent Directors and the Board as a whole review theperformance of the Executive Chairman of the Company (taking into account the views of theExecutive and Non-Executive Directors) review the performance of the Company assess thequality quantity and timeliness of flow of information between the Company Management andthe Board that is necessary for the Board to effectively and reasonably perform theirduties.

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

Audit Committee

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

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

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


Corporate Governance

Your Company has a rich legacy of ethical governance practices many ofwhich were implemented by the Company even before they were mandated by law. Your Companyis committed to transparency in all its dealings and places high emphasis on businessethics. A Report on Corporate Governance along with a Certificate from the StatutoryAuditors of the Company regarding compliance with the conditions of Corporate Governanceas stipulated under Schedule V of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 forms part of the Annual Report.

Vigil Mechanism

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

Whistle Blower Policy of your Company is available on theCompany's website and can be accessed at the Web-link: Further details are available in the Report on CorporateGovernance that forms part of this Annual Report.

The Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013

The Company has in place an Anti-Sexual Harassment Policy in line withthe requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. Internal Complaints Committee (ICC) has been set upto redress complaints received regarding sexual harassment.

All employees (permanent contractual temporary trainees) are coveredunder this Policy. The Policy is gender neutral. During the year under review 4complaints with allegations of sexual harassment were filed of which 3 were disposed-offas per the provisions of The Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and as of 31st March 2017 1 complaint ispending.

Business Responsibility Report

The ‘Business Responsibility Report' (BRR) of your Companyfor the year 2016-17 forms part of this Annual Report as required under Regulation34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

Your Company strongly believes that sustainable and inclusive growth ispossible by using the levers of environmental and social responsibility while settingaspirational targets and improving economic performance to ensure business continuity andrapid growth. Your Company is committed to leverage ‘Alternative Thinking' tobuild competitive advantage in achieving high shareholder returns through customercentricity innovation good governance and inclusive human development while beingsensitive to the environment.

Risk Management

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

Your Company has constituted a Risk Management Committee of the Boardwhich is authorised to monitor and review risk management plan and risk certificate. TheCommittee is also empowered inter alia to review and recommend to the Board themodifications to the Risk Management Policy. Further the Board has constituted aCorporate Risk Council comprising the Senior Executives of the Company. The terms ofreference of the Council comprises review of risks and Risk Management Policy on periodicintervals.

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


Corporate Social Responsibility (CSR)

Your Company's Corporate Social Responsibility efforts continue tobe directed towards supporting the constituencies of girls youth and farmers byinnovatively supporting them through programs in the domains of education health andenvironment while harnessing the power of technology. It is only through these sustainedand continued efforts that your Company can build and consolidate its CSR initiativeswhich contribute to nation building.

During the last Financial Year your Company has been making an impactthrough its ongoing CSR programs some of the notable ones include Project Nanhi Kaliwhich supports the education of underprivileged girls Mahindra Pride Schools whichprovide livelihood training to youth from socially and economically disadvantagedcommunities and a variety of other scholarship programs which range from providingopportunities to youth from low income group families to undergo diploma courses atvocational education institutes to allowing meritorious students to pursue their postgraduate studies at reputed universities overseas to allowing meritorious and deservingstudents to study at the Mahindra United World College in Pune. Your Company has alsohelped set up a premier engineering institution ‘Mahindra cole Centrale' (MEC)in Hyderabad in partnership with Ecole Centrale Paris and the Jawaharlal NehruTechnological University Hyderabad. In the area of public health your Company sponsoredLifeline Express through which medical care and treatment was provided to communities whodo not have access to any medical facilities. Further your Company supported criticalpatients suffering from cancer and other life threatening illnesses. Your Company alsocontributed to the environment by adding green cover through planting of over two milliontrees this year through Project Hariyali. Your Company continues to support small andmarginal farmers by training them in effective farming practices including soil healthcrop planning creating model farms with bio-dynamic farming practices with a view toincreasing crop productivity through the Wardha Farmer Family Project Krishi MitraProject and

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

CSR Policy

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

CSR Committee

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

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

Sustainability Initiatives

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

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

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

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

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

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


Parivartan Sustainability Leadership Awards 2016.

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


India Awards 2017.

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


Management' (for Nashik Plant).


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


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



Disclosure Leadership Index 2016.

Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo

The information pertaining to conservation of energy technologyabsorption foreign exchange earnings and outgo as required under section 134(3)(m) of theCompanies Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 isfurnished in Annexure VII and is attached to this Report.


Share Capital

The issued subscribed and paid-up Share Capital of the Company stoodat Rs. 310.55 crores as at 31st March 2017 comprising of 621092384 Ordinary(Equity) Shares of Rs. 5 each fully paid-up. There was no change in Share Capital duringthe year under review.

Extract of Annual Return

Pursuant to section 134(3)(a) and section 92(3) of the Companies Act2013 read with Rule 12(1) of the Companies (Management and Administration) Rules 2014 anextract of the Annual Return as on 31st March 2017 in Form No. ATMGT-9 is attached herewith as Annexure VIII and forms part of this Report.



The Executive Chairman of the Company did not receive any 4)-%remuneration or commission from any of the subsidiary of your Company. The ManagingDirector of the Company did !WARD not receive any commission from any of its subsidiariesand has not exercised ESOPs of subsidiaries of the Company during the year which weregranted in the earlier year(s).

Your Directors state that no disclosure or reporting is required7ATERin respect of the following items as there were no transactions/ events on these itemsduring the year under review except as stated hereunder:

1. Issue of equity shares with differential rights as to dividendvoting or otherwise.

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

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

The Honourable Supreme Court on 29th March 2017 passedOrders that on and from 1st April 2017 non BS-IV compliant vehicles would notbe permitted to be sold in India by any manufacturer or dealer and prohibited vehicleregistration authorities from registering such vehicles. The Financial Statements haverecognised an impact of Rs. 171.01 crores arising from the above.

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

4. Voting rights which are not directly exercised by the employees inrespect 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 asenvisaged under section 67(3)(c) of the Companies Act 2013).

For and on behalf of the Board
Executive Chairman
Mumbai 30th May 2017