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Mahindra & Mahindra Ltd.

BSE: 500520 Sector: Auto
NSE: M&M ISIN Code: INE101A01026
BSE 00:00 | 16 Jan 725.65 -1.00






NSE 00:00 | 16 Jan 726.25 -0.65






OPEN 729.95
VOLUME 143941
52-Week high 992.00
52-Week low 695.20
P/E 19.21
Mkt Cap.(Rs cr) 90,213
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 729.95
CLOSE 726.65
VOLUME 143941
52-Week high 992.00
52-Week low 695.20
P/E 19.21
Mkt Cap.(Rs cr) 90,213
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 financial statements ofyour Company for the year ended 31st March 2018.


(Rs. in crores)

Particulars 2018 2017
Revenue from Operations 49445 47384
Other Income 1036 1345
Profit before Depreciation Finance
Costs Exceptional items and Taxation 7259 5861
Less: Depreciation Amortisation and
Impairment Expenses 1479 1526
Profit before Finance Costs
Exceptional items and Taxation 5780 4335
Less: Finance Costs 112 160
Profit before Exceptional items and
Taxation 5668 4175
Add: Exceptional items 434 548
Profit before Taxation 6102 4723
Less: Tax Expense 1746 1080
Profit for the year 4356 3643
Balance of profit for earlier years 21781 17905
Less: Transfer to Debenture
Redemption Reserve 14 14
Profits available for appropriation 26123 21534
Add: Due to Scheme of Arrangement 1092
Add: Other Comprehensive Income/ (Loss) * 8 (3)
Less: Dividend paid on Equity Shares 807 745
Less: Income-tax on Dividend paid 118 96
Balance carried forward 25206 21781

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

In the year gone by global growth and trade rebounded sharply and remained the storyof the year. Such broad based and strong growth has not been seen since the world'sinitial sharp 2010 bounce back from the financial crisis of 2008–09. In the UnitedStates fiscal policy even turned much more expansive as the Fed continued on its path ofinterest rate normalisation. Other large Central Banks however continued with theiraccommodative monetary stance. Global commodity prices including crude oil ralliedsignificantly during the year.

On the domestic side economic activity which flagged for five consecutive quartersbegan to recover as several elements started coming together to nurture this nascentacceleration. This started manifesting in estimates and high frequency as well assurvey-based indicators. A normal monsoon record foodgrains output strong sales growthby Corporations depleting finished goods inventories and resilience in several servicessectors raised the prospects of sustained economic recovery.

However even amidst this scenario your Company recorded an increase of 4.4% inrevenue from operations at Rs. 49445 crores in the year under review as against Rs.47384 crores in the previous year.

The Profit for the year before Depreciation Finance Costs Exceptional items andTaxation recorded an increase of 23.9% at Rs. 7259 crores as against Rs. 5861 crores inthe previous year. Profit after tax increased by 19.6% at Rs. 4356 crores as against Rs.3643 crores in the previous year.

Your Company continues with its rigorous cost restructuring exercises and efficiencyimprovements which have resulted in significant savings through continued focus on costcontrols process efficiencies and product innovations that exceed customer expectationsin all areas thereby enabling the Company to maintain profitable growth in the currenteconomic scenario.

No material changes and commitments have occurred after the closure of the FinancialYear 2017-18 till the date of this Report which would affect the financial position ofyour Company. There has been no change in the nature of business of your Company.

Performance Review

Automotive Sector:

Your Company's Automotive Sector recorded total sales of 548508 vehicles (490870four-wheelers and 57638 three-wheelers) as against a total of 506624 vehicles (452893four-wheelers and 53731 three-wheelers) in the previous year registering a growth of8.3%.

In the domestic market your Company sold a total of 520286 vehicles as compared to469384 vehicles in the previous year resulting in a growth of 10.8%.

In the Passenger Vehicle segment your Company sold 248859 vehicles [including233915 Utility Vehicles (UVs) 14219 Vans and 725 Cars] registering a growth of 5.4%as compared to the previous year's volume of 236130 vehicles [including 222541 UVs10370 Vans and 3219 Cars].

In the Commercial Vehicle segment your Company sold 216802 vehicles [including41305 vehicles <2T GVW 158269 vehicles between 2-3.5T GVW 7744 LCVs in the LCV> 3.5T segment and 9484 Heavy Commercial Vehicles (HCVs)] registering a growth of19.8% over the previous year's volume of 180948 commercial vehicles [including 30043vehicles < 2T GVW 136564 vehicles between 2-3.5T GVW 7626 LCVs in the LCV >3.5T segment and 6715 HCVs].

In the Three-Wheeler segment your Company sold 54625 three wheelers registering agrowth of 4.4% over the previous year's volume of 52306 three wheelers.

For the year under review the Indian automotive industry (except 2W) grew 11.9% withthe Passenger Vehicle (PV) industry growth of 7.9% and Commercial Vehicle (CV) industrygrowth of 19.9%. Three industry sub-segments where your Company has an active presenceposted very robust growth. These are Utility Vehicles (UV) which grew 21% LCV Goods< 3.5T at 29.8% and MHCV Goods at 19.4%.

Your Company's UV volume grew 5.1% to 233915 units. The UV market share for yourCompany stood at 25.4% as against 29.2% in the previous year. Scorpio continues tostrengthen its iconic status and recorded the highest ever sales with a volume of 53934units in Financial Year 2018. Bolero has been a very successful brand for your Companyover the last 10 years and for the year under review Bolero along with the all NewBolero Power+ posted combined sales of 85386 units. Your Company strengthened the UVportfolio with the launch of the ‘KUV100 NXT' in October 2017 the ‘AllPowerful Scorpio' in November 2017 and the ‘Plush New XUV500' in April 2018.

Your Company is the pioneer for Electric Vehicles (EVs) in India and for the yearunder review sold [along with its subsidiary Mahindra Electric Mobility Limited] 4026EVs (1094 four wheelers and 2932 three wheelers) as against 1021 EVs in the previousyear. This growth is supported by the Government's thrust on adopting EVs and yourCompany's efforts of working with various stakeholders especially fleet operators.

In the LCV<3.5T segment your Company retained the No. 1 position with a47.4% market share. Your Company sold a total of 199544 vehicles in this segment whichis a growth of 19.8% over the previous year. The LCV<3.5T segment has two sub segmentsviz. LCV<2T and LCV 2-3.5T which is the Pik-UP segment. Your Company has a marketshare of 25% and 61.9% in the two sub segments respectively.

In the HCV segment your Company sold 9484 trucks as against 6715 trucks in theprevious year. This is a growth of 41.2%. The growth is driven by good productperformance improved service reach and spares availability. The Blazo series of truckswhich are backed by guarantees on mileage and service are instrumental in building brandand growing sales. Your Company's market share in the HCV segment stands at 4.5%.

During the year under review your Company posted an export volume of 28222 vehiclesas against the previous year's record exports of 37240 vehicles. This is a de-growth of24.2%. This de-growth is principally due to adverse business and regulatory environment inkey markets of Nepal and Sri Lanka. Sales in Africa grew 13%.

The spare parts sales for the year stood at Rs. 2083.8 crores (including Exports ofRs. 193.4 crores) as compared to Rs. 1937.2 crores (including Exports of Rs. 115.6crores) in the previous year registering a growth of 7.6%.

Farm Equipment Sector

Your Company's Farm Equipment Sector recorded total sales of 317531 tractors asagainst 263177 tractors sold in the previous year thus recording a growth of 20.7%.

For the year under review the tractor industry in India recorded sales of 709308tractors a growth of 21.9%. Second consecutive year of normal monsoon increase in MSPsand Government's thrust on Agriculture and rural development helped drive the positivesentiment in the Agriculture Sector and the rural economy at large. In the domesticmarket your Company sold 302082 tractors as compared to 248594 tractors in theprevious year recording a growth of 21.5%. In a very competitive industry your Companycontinued its market leadership for the 35th consecutive year with a marketshare at 42.6%.

Your Company's growth was driven by good performance of all products under the Mahindraand Swaraj Brands. The new product trio of Mahindra NOVO YUVO and JIVO have helped buildthe ‘technology leadership' image for the Company. JIVO which was launched inFinancial Year 2018 proved to be an ideal choice for farmers in the fast growing orchardand horticulture space.

For the year under review Swaraj Division of your Company launched the Swaraj 963 inthe 60+ HP segment. The Swaraj 963 and its variants will help grow volume in the higherHP segment. Further your Company had developed and demonstrated technology for driverlesstractors. First phase of this technology will be made available in the market in theFinancial Year 2019. With this your Company would take another pioneering step torevolutionise farming in India.

For the year under review your Company exported 15449 tractors registering a growthof 5.9% over the previous year. This is the highest ever tractor exports from India byyour Company. There was growth in exports to USA and neighbouring countries.

Your Company continued to strengthen its global footprint by further expanding intoTurkey through the acquisition of Erkunt Traktor Sanayii A.S. (Erkunt) the 4thlargest tractor brand in Turkey. This is the second acquisition by your Company in Turkeyafter Hisarlar which is a farm equipment company. Spare parts net sales for the year stoodat Rs. 605.3 crores (including exports of Rs. 52.9 crores) as compared to Rs. 534.4 crores(including exports of Rs. 43.8 crores) in the previous year registering a growth of13.3%.

Other Businesses

Mahindra Powerol

Under the Mahindra Powerol Brand your Company has been a leader in providing powerback-up solutions to the telecom industry for past 11 years. With a focus on changingcustomer needs your Company has further expanded the business in Tele infra managementand in the energy management solutions space.

In the retail genset business your Company is the No. 2 brand by volume and for theyear under review expanded the product range with the launch of gensets in the higher KVArange.

Construction Equipment Business

For the year under review your Company (under the Mahindra EarthMaster brand) sold1229 Backhoe Loaders (BHLs) against 1025 in Financial Year 2017 which is a growth of19.9%. With an uptick in infrastructure spending the BHL market in India grew 23.5% overthe previous year. Your Company ranks 4th in the BHL industry.

Your Company forayed into fast growing road construction equipment business with thelaunch of Motor Grader - RoadMaster G75 in October 2017. Your Company sold 164 motorgraders in Financial Year 2018.

Two-Wheeler Business

During the year under review the two-wheeler business of Mahindra Two Wheelers Limitedwas demerged into your Company. For the Financial Year 2017-18 your Company sold 32661two-wheelers (including 17912 exports).

Transitioning to Goods and Services Tax

Effective 1st July 2017 India introduced the landmark tax reform withinitiation of the Goods and Services Tax (GST) regime. All businesses of your Companymade a timely and seamless transition to the new GST system.

Current Year's review

During the period 1st April 2018 to 28th May 2018 72813vehicles were produced as against 62615 vehicles and 67244 vehicles were despatched asagainst 59361 vehicles during the corresponding period in the last year. During the sameperiod 56961 tractors were produced and 57290 tractors despatched as against 48499tractors produced and 48210 tractors despatched during the corresponding period in theprevious year.

Economic activity is expected to gather pace in Financial Year 2019 as the transitoryeffects of implementation of the Goods and Service Tax (GST) recede. The Reserve Bank ofIndia (RBI) projects India's GDP growth to strengthen from 6.6 per cent in 2017-18 to 7.4per cent in Financial Year 2019. The step-up in growth outlook is likely to be driven by arevival of investment on the demand side and manufacturing on the supply side. Creditoff-take has also improved and is becoming increasingly broad-based which augurs well forthe underlying economic activity.

This outlook will also be lifted by tailwinds from normal rainfall with the weatherbureau forecasting a ‘normal' monsoon for the third successive year in its firststage long range forecast. While the spatial and temporal distribution remain to be seenwell spread out rainfall is likely to have a salutary impact on the overall demandconditions. Moreover the thrust on rural and infrastructure sectors imparted through theUnion Budget could further help rejuvenate rural demand and also crowd in privateinvestment.

Global growth backdrop too remains benign with a synchronised cyclical rebound. A boostto US investment demand from corporate tax cuts strong activity in the Euro areasupported by accommodative monetary policy and improvement in growth prospects of EmergingMarket Economies (EMEs) have been supportive of this rebound thus far. However escalationin trade frictions and protectionist policies abrupt changes in the pace and timing ofnormalization of monetary policy of developed country central banks and higher crude oilprices could pose downside risks to global trade and demand growth.


Financial Year 2017-18 saw the broadest synchronized global growth since the financialcrisis. World economy grew at 3.8% in 2017 up from 3.2% in 2016 on the back of growth intrade pickup in investment particularly among advanced economies. US economy grew at arobust pace and is expected to continue on the back of tax reforms and associated fiscalstimulus. US Federal Reserve hiked interest rates by a cumulative of 75 bps during theFinancial Year. Eurozone also saw a rebound in business sentiment and investments withstill accommodative monetary policy political uncertainties largely sorted and Brexitnegotiations making progress. Despite some slowdown recently Japan recorded eightconsecutive quarters of growth up to December 2017.

Economic activity also continued to expand in major emerging market economies such asBrazil Russia and South Africa - driven by higher crude and commodity prices. Chinawitnessed slight slowdown as it transitions from an export-driven to a domestic demanddriven growth model and saw a rating downgrade with warnings on its excessive debtlevels. The latest World Economic Outlook by IMF predicts global growth to pick up to 3.9%in 2018 supported by strong momentum favorable market sentiment accommodative financialconditions and the domestic and international repercussions of expansionary fiscal policyin the United States. The key risks to the optimistic outlook are rising tradeprotectionism and geo-political uncertainties especially in the Middle-East.

On the domestic front the year began on a jubilant note with the Union Budget giving astrong thrust to the rural economy and a normal monsoon after two years of deficientrainfall. The much awaited Goods and Services Tax (GST) was rolled out on 1stJuly 2017 replacing multiple taxes levied by Governments. Economic activity acceleratedas is evident from high frequency indicators such as strong retail sales depletingfinished goods inventories and greenshoots of renewal of capex cycle.

On the other hand financial markets saw volatility on the back of US Fed tighteningand rising crude prices. In addition Banking Sector was also fraught withnon-performing assets and frauds.

Indian Rupee which appreciated till the early part of January 2018 on buoyant capitalinflows started depreciating subsequently over concerns of the impact of higher crude oilprices on India's trade deficit and closed the year at Rs. 65.18 per USD.

CPI inflation remained benign during the first half of Financial Year 2018 which led tothe Reserve Bank of India (RBI) to ease policy rates by 25 bps. However inflationgradually started inching up in the second half of the year due to unfavourable baseeffect and rise in food and fuel inflation. Going forward there are various uncertaintieson the inflation outlook primarily on account of impact of HRA increases by various StateGovernments increase in MSP in Union Budget 2018 rising fuel and commodity prices andnormalisation of monetary policy by major advanced economies. Systemic liquidity whichhad remained in surplus since demonetization turned into deficit towards close of theyear. Consequently even though RBI remained in a pause mode since August 2017 bondmarkets experienced rise in yields due to drying liquidity concerns about inflation andthe fiscal situation.

Your Company continued to focus on managing cash efficiently and ensured that it hadadequate liquidity and back up lines of credit. During the year your Company repaid Rs.80.69 crores of long term borrowings from internal accruals. During the year your Companyalso availed short term export finance. As on 31st March 2018 Rs. 668 croresof export finance was outstanding out of which Rs. 365 crores was under the interestequalization scheme of Government of India. The Company's Bankers continue to rate yourCompany as a prime customer and extend facilities/services at prime rates. Your Companyfollows a prudent financial policy and aims not to exceed an optimum financial gearing atany time. The Company's total Debt to Equity Ratio was 0.10 as at 31st March2018.

Your Company has been rated by CRISIL Limited (CRISIL) ICRA Limited (ICRA) IndiaRatings and Research Private Limited (India Ratings) and CARE Ratings Limited (CARE) forits Banking facilities. All have re-affirmed the highest credit rating for your Company'sShort Term facilities. For Long Term facilities and Non-Convertible Debenture (NCD)programme CRISIL ICRA and India Ratings have re-affirmed their credit ratings of CRISILAAA/Stable [ICRA]AAA (stable) and IND AAA/Stable for the respective facilities rated bythem. With the above rating affirmations your Company continues to enjoy the highestlevel of rating from all major rating agencies at the same time.

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

Investor Relations (IR)

Your Company continuously strives for excellence in its IR engagement withInternational and Domestic investors and has set up feedback mechanism to measure IReffectiveness. Structured conference calls and periodic investor/analyst interactionsincluding one-on-one meeting participation in investor conferences quarterly earningscalls and annual analyst meet with the Chairman Managing Director and Business Heads wereorganised during the year.

Your Company interacted with around 670 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 IRand building a relationship of mutual understanding with investor/analysts. As a keymilestone in this continuing endeavour your Company created a digital interactive annualreview of the Company's performance on the Corporate website to provide an interactiveexperience beyond what is available in the Annual Report. The Company had created itsfirst Integrated Report (for Financial Year 2017). Your Company also continues to organisecon-call on Environment Social and Corporate Governance (ESG) for analysts and investorswhich has received excellent feedback from investors and ESG analysts for thispioneering initiative.

Your Company ensures that critical information about the Company is available to allthe investors by uploading all such information at the Company's website. Your Company hascreated a ‘Group Investor Relations Council' to share best practices across all thelisted group companies and learn from each other.

Issue of Shares

(a) Scheme of Arrangement between Mahindra Two Wheelers Limited and Mahindra andMahindra Limited and their respective Shareholders and Creditors (Scheme) Your Company on8th November 2017 allotted 503888 Ordinary (Equity) Shares of Rs. 5 each tothe Shareholders of Mahindra Two Wheelers Limited (other than the Company) pursuant to theScheme.

(b) Bonus Shares

Pursuant to the recommendation of the Board of Directors at its Meeting held on 10thNovember 2017 and approval of the Members of the Company through a Postal Ballot theResults of which were declared on 16th December 2017 your Company has on 26thDecember 2017 allotted 621596272 Ordinary (Equity) Shares of Rs. 5 each as fullypaid-up Bonus Shares in the ratio of one Bonus Share for every one existing Equity Shareof the Company held by the Shareholders as on the Record Date i.e. 23rdDecember 2017.

Consequently the paid-up Equity Share Capital of the Company increased to Rs.6215962720 divided into 1243192544 Ordinary (Equity) Shares of Rs. 5 each fullypaid-up.


Your Directors are pleased to recommend a dividend of Rs. 7.50 per Ordinary (Equity)Share of the face value of Rs. 5 each on the enhanced Share Capital payable to thoseShareholders whose names appear in the Register of Members as on the Book Closure Date.The equity dividend outgo for the Financial Year 2017-18 inclusive of tax on distributedprofits (after reducing the tax on distributed profits of Rs. 69.52 crores on thedividends declared by subsidiaries as of the date of this report and receivable during thecurrent Financial Year 2018-19) would absorb a sum of Rs. 1054.53 crores [as against Rs.927.62 crores comprising the dividend of Rs. 13 per Ordinary (Equity) Share of the facevalue of Rs. 5 each and tax thereon paid for the previous year]. Further the Board ofyour Company decided not to transfer any amount to the General Reserve for the year underreview. The dividend pay-out is in accordance with the Company's Dividend DistributionPolicy.

Dividend Distribution Policy

The Dividend Distribution Policy containing the requirements mentioned in Regulation43A of the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 is attached as Annexure I and forms part of this AnnualReport.


The Consolidated Financial Statements of the Company its subsidiaries associates andjoint ventures prepared in accordance with the Companies Act 2013 and applicable IndianAccounting Standards along with all relevant documents and the Auditors' Report form partof 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 on the website of theCompany and can be accessed at the Web-link: FY18/AnnualReports/

Subsidiary Joint Venture and Associate Companies

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

Tech Mahindra Limited Flagship Company in the IT Sector has reported a consolidatedrevenue of Rs. 30773 crores in the current year as compared to Rs. 29141 crores in theprevious year an increase of 6%. Its consolidated profit after tax is Rs. 3800 crores ascompared to Rs. 2813 crores in the previous year an increase of 35%.

The Group's finance company Mahindra & Mahindra Financial Services Limited(Mahindra Finance) reported a consolidated operating income of Rs. 8533 crores duringthe current year as compared to Rs. 7146 crores in the previous year a growth of 19%.The consolidated profit after tax for the year is Rs. 1024 crores as compared to Rs. 512crores in the previous year. Mahindra Finance financials is as per Indian GenerallyAccepted Accounting Principles (IGAAP).

Mahindra Lifespace Developers Limited the subsidiary in the business of real estateand infrastructure registered a consolidated operating income of Rs. 566 crores ascompared to Rs. 762 crores in the previous year. The consolidated profit after tax for theyear is Rs. 101 crores as compared to Rs. 102 crores in the previous year.

Mahindra Holidays & Resorts India Limited the subsidiary in the business oftimeshare registered a consolidated operating income of Rs. 2317 crores as compared toRs. 2267 crores in the previous year an increase of 2%. The consolidated profit aftertax for the year is Rs. 132 crores as compared to Rs. 149 crores in the previous year.

Mahindra Logistics Limited a listed subsidiary in the logistics business hasregistered a consolidated operating income of Rs. 3416 crores as compared to Rs. 2667crores in the previous year an increase of 28%. The consolidated profit after tax for theyear is Rs. 64 crores as compared to Rs. 46 crores in the previous year an increase of39%.

Ssyangyong Motor Company the Korean subsidiary of the Company has reportedconsolidated revenues of Rs. 20435 crores in the current fiscal year as compared to Rs.21153 crores in the previous year. The consolidated loss for the year is Rs. 502 croresas compared to consolidated profit after tax of Rs. 245 crores in the previous year.

The consolidated group profit before exceptional item and tax for the year is Rs. 6590crores as against Rs. 5004 crores in the previous year – a growth of 32%. Theconsolidated profit after tax after non-controlling interest and exceptional items for theyear is Rs. 7510 crores as against Rs. 3698 crores in the previous year.

During the year under review Mahindra Automotive North America Inc. Merakisan PrivateLimited Mahindra Vehicle Sales and Services Inc. Mahindra Waste Energy SolutionsLimited Mahindra Telecom Energy Management Services Limited Mahindra HappinestDevelopers Private Limited Mahindra Fresh Fruits Distribution Holding Company (Europe)B.V. Erkunt Traktor Sanayii A.S. Erkunt Sanayi A.S. Deep Mangal Developers PrivateLimited Moonshine Construction Private Limited Mahindra Construction Company LimitedVisionsbolaget 12191 AB and Visionsbolaget 12192 AB became subsidiaries of your Company.

During the year under review Mahindra Yueda (Yancheng) Tractor Company LimitedDefence Land Systems India Limited Raigad Industrial & Business Park LimitedMahindra Telecommunications Investment Private Limited Gateway Housing Company Limitedand Visionsbolaget 12192 AB ceased to be subsidiaries of your Company.

Subsequent to the year end Mahindra Susten Bangladesh Private Limited and Blitz 18-371GmbH became subsidiaries of your Company and Gipp Aero Investments Pty Limited andAerostaff Australia Pty Limited ceased to be subsidiaries of your Company.

Pursuant to the Ministry of Corporate Affairs Notification dated 7th May2018 the amendment to the definition of "subsidiary company" was made effectiveand thereby

Mahindra Knowledge Park Mohali Limited became a subsidiary of your Company andMerakisan Private Limited ceased to be a subsidiary of your Company.

During the year under review Mahindra Waste Energy Solutions Limited changed its nameto Mahindra Waste To Energy Solutions Limited Mahindra Gujarat Tractor Limited changedits name to Gromax Agri Equipment Limited Mahindra Suryaurja Private Limited changed itsname to Mega Suryaurja Private Limited and Visionsbolaget 12191 AB changed its name tore Villa 3 AB.

During the year under review Mahindra Happinest Developers Private Limited andMahindra Defence Naval Systems Private Limited were converted into Public LimitedCompanies and accordingly their names were changed to Mahindra Happinest DevelopersLimited and Mahindra Defence Naval Systems Limited.

Subsequent to the year end Mahindra Retail Private Limited was converted into a PublicLimited Company and accordingly changed its name to Mahindra Retail Limited. FurtherBlitz 18-371 GmbH changed its name to Automobili Pininfarina GmbH and IndustrialCluster Private Limited changed its name to Mahindra Industrial Park Private Limited.

During the year under review M.I.T.R.A Agro Equipments Private Limited ZoomCar IncCarnot Technologies Private Limited and Resfeber Labs Private Limited became Associates ofyour Company and subsequent to the year end Merakisan Private Limited became Associate ofyour Company.

A Report on the performance and financial position of each of the subsidiariesassociates and joint venture companies included in the Consolidated Financial Statementand their contribution to the overall performance of the Company is provided in FormAOC-1 and forms part of this Annual Report.

The Policy for determining material subsidiaries as approved by the Board is uploadedon the Company's website and can be accessed at the Web-link: investor-reports/FY18/AnnualReports/


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

MTWL a step down subsidiary of your Company has been engaged in the businesses ofdesign manufacture sales and service of two wheelers (Two-Wheeler Business) and alsotrading in spares and accessories for two wheelers. A Scheme of Arrangement between MTWLand your Company and their respective Shareholders and Creditors (Scheme) was announced byyour Company to demerge the Two Wheeler Business into your Company. The appointed date ofthe Scheme was 1st October 2016. The National Company Law Tribunalapproved the Scheme and the Scheme has been made effective from 25thOctober 2017.

In accordance with the Scheme your Company has allotted 463287 Ordinary (Equity)Shares of Rs. 5 each to Aay Kay Global and 40601 Ordinary (Equity) Shares of Rs. 5 eachto Emerging India Fund the Shareholders of MTWL in the share exchange ratio of 1 fullypaid-up Ordinary (Equity) Share of Rs. 5 each of the Company for every 461 fully paid-upshares held in MTWL.

Divestment of 87211 Equity Shares of Swaraj Engines Limited in the Buy-back offer

During this year Swaraj Engines Limited (SEL) an associate company of your Companyhad come up with a Buy-Back Offer (Offer). Your Company successfully offered 87211 EquityShares of SEL in the Offer. Your Company booked a profit of approximately Rs. 21 crores inthe process. Following this Offer the shareholding of your Company has marginallyincreased from 33.22% to 33.31% of SEL's share capital.

Sale of 6450000 shares representing 5% of the total share capital of CIE AutomotiveS.A

During the year Mahindra Overseas Investment Company (Mauritius) Limited (MOICML) awholly owned subsidiary of the Company executed a sale of 6450000 shares representing5% of the share capital of CIE Automotive S.A at a price of Euro 23.5 per shareaggregating to Euro 151.58 million on the Spanish Stock Exchange. The post-tax capitalgains booked by MOICML is Euro 91.4 million.

Post the sale MOICML's shareholding in CIE Automotive S.A has come down to 7.435% ofits share capital. This transaction has facilitated diversification of the investor baseof CIE Automotive S.A.

Scheme of Amalgamation between Defence Land Systems India Limited (Transferor Company)and Mahindra Defence Systems Limited (Transferee Company) and their respectiveShareholders and Creditors (Scheme)

The National Company Law Tribunal has approved the Scheme vide its order dated 5thOctober 2017. The appointed date of the Scheme is 1st January 2017 and theScheme is effective from 18th October 2017.

Initial Public Offer of Mahindra Logistics Limited

During this year Mahindra Logistics Limited (MLL) a subsidiary of your Companysuccessfully completed an Initial Public Offer (IPO) with an issue size of Rs. 829 crores.As a part of this IPO your Company sold 9666173 Equity Shares of MLL amounting to13.6% stake. The offer was oversubscribed nearly by 8 times and the allotment took placeat the upper end of the price band of Rs. 425-429 per share. The Equity Shares of MLL gotlisted on BSE Limited and National Stock Exchange of India Limited (NSE) on 10thNovember 2017.

This was the largest IPO from your Company till date and as a result of this secondarysale during the IPO your Company has realized gross proceeds of Rs. 414 crores and bookedprofit of Rs. 386 crores thereby unlocking substantial value creation for theshareholders. Your Company's shareholding in MLL stood at 58.8% on completion of the IPO.The Equity Shares of MLL traded at closing price of Rs. 484.80 per share on NSE on thelast trading day of the fiscal year ended on 31st March 2018.

Consolidation of Smartshift and Porter

Orizonte Business Solutions Limited (Smartshift) is a step down subsidiary of yourCompany which owns and operates a technology enabled load exchange marketplace platformfor matching the needs of cargo owners with transporters. Mahindra Trucks & BusesLimited (MTBL) a wholly owned subsidiary of your Company held a 10.37% stake on a fullydiluted basis in Resfeber Labs Private Limited (Porter) which is a similar business tothat of Smartshift. To leverage synergies and obtain greater economies of scale for bothbusinesses your Company agreed to a Scheme to merge Smartshift and Porter. As a part ofthis strategy on 23rd February 2018 your Company executed a ShareSubscription Agreement and Shareholders Agreement which entailed a commitment to mergeSmartshift with Porter through a Scheme of Merger and make an investment of approximatelyRs. 65 crores in Porter and Smartshift. As on date your Company has made theaforesaid investment in Smartshift and Porter. Additionally the aforementioned Scheme ofMerger was also approved by the Board of Directors of Smartshift and Porter and was filedbefore the National Company Law Tribunal (NCLT) Mumbai Bench on 5th April2018. Pursuant to the merger which is subject to the NCLT approval Smartshift will ceaseto be a subsidiary of the Company.

Post merger the shareholding of your Company and its subsidiaries in Porter (thecombined entity) taken on a fully diluted basis would be 30.9% for the Company 2.5% forMahindra & Mahindra Financial Services Limited and 7% for MTBL.

Investment in Zoomcar

Your Company has been keen to invest in the shared mobility space as part of itsstrategy to promote and participate in sustainable mobility solutions including multimodal urban mobility with the objective of enabling improved livelihoods and lifestylesof people enabling them to RISE. As a part of your Company's strategy of promotingElectric Vehicles and shared mobility your Company invested in Zoomcar India PrivateLimited (Zoomcar India) which is a leading self-drive car rental company based out ofBangalore India and had been 100% owned by Zoomcar Inc. a holding company incorporatedin the USA. Your Company subscribed to Compulsory Convertible Preference Shares (CCPS) ofZoomcar India which on an as-converted to Equity Share basis would result in theCompany holding about 11.6% of the Equity Share Capital of Zoomcar India on a fullydiluted basis. Subject to receipt of regulatory approvals the Company shall exchange itsCCPS holding of Zoomcar India for Preferred Stock of Zoomcar Inc. at a future date.Mahindra Overseas Investment Company (Mauritius) Limited (MOICML) a wholly ownedsubsidiary of the Company has also invested in Zoomcar Inc.

The effect of this investment by your Company and MOICML on an aggregate as-convertedto common stock of Zoomcar Inc. basis would result in your Company and MOICML togetherholding approximately 16% of the Common Stock of Zoomcar Inc. on a fully diluted basis.

Exploration of Strategic Co-operation with Ford

During the year your Company announced its intent of exploring a strategic alliancewith Ford Motor Company (Ford) which is designed to leverage the benefits of Ford's globalreach and expertise and your Company's scale in India and its successful operational modelto allow each company to leverage the others' strengths during a period of unprecedentedtransformation in the global automotive industry. To that end the Company signed severalMOUs with Ford during the year which included an overall co-operation plan agreement andthe others being in specific areas of connected vehicle projects battery electricvehicle powertrains and product development of mid-size and compact SUV.

Acquisition of Erkunt Traktor Sanayii A.S. and Erkunt Sanayi A.S.

During the year your Company strengthened its presence in Turkey by acquiring ErkuntTraktor Sanayii A.S. (Erkunt Tractor) and Erkunt Sanayi A.S. (Erkunt Sanayi). ErkuntTractor is the 4th largest tractor company in Turkey and Erkunt Sanayi is aleading casting and machining company catering to tractor and other industrial machinery.Mahindra Overseas Investment Company (Mauritius) Limited a wholly owned subsidiary ofyour Company acquired 100% of Erkunt Tractor and 98.7% of Erkunt Sanayi forapproximately Rs. 450 crores. These acquisitions along with investment in Hisarlar Makinain Financial Year 2017 provide a strong base for your Company to participate in theTurkish agri-machinery market which is among the largest globally.

Investment in M.I.T.R.A. Agro Equipment Private Limited

Your Company invested Rs. 8 crores in Equity Shares of M.I.T.R.A Agro Equipment PrivateLimited (MITRA) during the year. MITRA is an Indian agri-machinery company specialisingin equipment such as sprayers for horticulture. Your Company now has a 26% equity stakeon fully diluted basis in MITRA. The partnership with MITRA will enable your Company toexpand and strengthen its presence in the horticulture segment which is fast growing.

Investment in Carnot Technologies Private Limited

During the year your Company invested approximately Rs. 6.1 crores in CarnotTechnologies Private Limited (Carnot) a startup founded in 2015 by purchasing existingEquity Shares and subscribing to Series A Convertible Preference Shares. Your Company nowowns approximately 23% of the fully diluted equity capital of Carnot. Carnot providesInternet of Things (IoT) products and solutions for automobiles currently and your Companyintends to partner with Carnot to develop innovative technology solutions and accessoriesto supplement and enhance the value of its product and service offerings across segments.

Launch of ROXOR by Group company MANA in the US

Mahindra Automotive North America (MANA) a second level subsidiary of your Companylaunched ROXOR a new Off-Road vehicle in the powersports segment in March 2018. ROXORwas conceived designed engineered and is being produced in Metro Detroit by MANA whichrecently opened a new North American Automotive Headquarter and manufacturing center inthe US.

Waste to Energy Solutions

During the year your Company incorporated Mahindra Waste To Energy Solutions Limited(MWESL) as a new subsidiary to carry out activities in relation to conversion of organicwastes to energy. Currently there are multiple locations across India where projects atdifferent operational stages are being executed. In February 2018 MWESL executed an MOUwith Indraprastha Gas Limited (IGL) for providing sustainable solutions to wastemanagement and stubble burning through design and development of bio-gas plantswhich will use agro and other organic waste in the region where IGL operates.

Merger of Mahindra Telecommunications Investment Private Limited and Gateway HousingCompany Limited (Transferor Companies) with Mahindra Holdings Limited (Transferee Company)and their respective Shareholders (Scheme)

The National Company Law Tribunal has approved the Scheme vide its order dated 4thJanuary 2018. The appointed date of the Scheme is 1st April 2016 and theScheme is effective from 27th February 2018.

Capital Raising by Mahindra & Mahindra Financial Services Limited a listedsubsidiary of your Company

During the year under review Mahindra & Mahindra Financial Services Limited(MMFSL) a listed subsidiary of your Company had received the approval of its shareholdersto issue upto 2.5 crores shares by way of Preferential Allotment to your Company and upto2.4 crores shares by way of Qualified Institutions Placement (QIP). MMFSL had successfullyraised a total of Rs. 2111 crores through the above issuances made to both theCompany (Rs. 1055 crores) and a mix of domestic and international qualified institutionalbidders (Rs. 1056 crores).

With your Company maintaining majority shareholding of 51.19% MMFSL continues tobenefit by leveraging the financial and operational synergies with the Company and withthe simultaneous QIP issuance it has been able to diversify its investor base. MMFSL'sCapital Adequacy has strengthened with this capital raise. It further enables MMFSL toaugment its long term resources to enable it to meet its business growth and fundingrequirements as well as meet the investment required to be made in its subsidiariesand joint ventures.


The Corporate Governance Policies guide the conduct of affairs of your Company andclearly delineates the roles responsibilities and authorities at each level of itsgovernance structure and key functionaries involved in governance. The Code of Conduct forSenior Management and Employees of your Company (the Code of Conduct) commits Managementto financial and accounting policies systems and processes. The Corporate GovernancePolicies and the Code of Conduct stand widely communicated across your Company at alltimes.

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

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

Your Company has in place adequate internal financial controls with reference to theFinancial Statements commensurate with the size scale and complexity of its operations.This year your Company's Internal Financial Controls were deployed through InternalControl – Integrated Framework (2013) issued by the Committee of SponsoringOrganizations of the Treadway Commission (COSO) that addresses material risks in yourCompany's operations and financial reporting objectives. Such controls have been assessedduring the year under review taking into consideration the essential components ofinternal controls stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by The Institute of Chartered Accountants of India. Based onthe results of such assessments carried out by Management no reportable material weaknessor significant deficiencies in the design or operation of internal financial controls wasobserved. Your Company recognises Internal Financial Controls cannot provide absoluteassurance of achieving financial operational and compliance reporting objectives becauseof its inherent limitations. Also projections of any evaluation of the Internal FinancialControls to future periods are subject to the risk that the Internal Financial Control maybecome inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate. Accordingly regular audits and reviewprocesses ensure that such systems are reinforced on an ongoing basis.


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


All Related Party Transactions entered during the year were in the ordinary course ofbusiness and on arms length basis. During the year under review your Company had enteredinto Material Related Party Transactions i.e. transactions exceeding ten percent of theannual consolidated turnover as per the last audited financial statements with MahindraVehicle Manufacturers Limited a wholly owned subsidiary of your Company. Thesetransactions too were in the ordinary course of business of your Company and were on armslength basis details of which as required to be provided under section 134(3)(h) of theCompanies Act 2013 are disclosed in Form AOC-2 as Annexure II and forms part of thisAnnual Report.

The Policy on Materiality of and Dealing with Related Party Transactions as approved bythe Board is uploaded on the Company's website and can be accessed at the Web-link: AnnualReports/


Statutory Auditors and Auditors' Report

Messrs B S R & Co. LLP Chartered Accountants (ICAI Firm Registration Number101248W/W-100022) were appointed as the Statutory Auditors of the Company to hold officefor 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 AGMof the Company to be held in the year 2022.

Pursuant to the Notification issued by the Ministry of Corporate Affairs on 7thMay 2018 amending section 139 of the Companies Act 2013 the mandatory requirement forratification of appointment of Auditors by the Members at every AGM has been omitted andhence your Company has not proposed ratification of appointment of Messrs B S R & Co.LLP Chartered Accountants at the forthcoming AGM. The Auditors' Report is unmodifiedi.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 hasappointed Mr. Sachin Bhagwat Practicing Company Secretary (Certificate of PracticeNumber: 6029) to undertake the Secretarial Audit of the Company.

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

Cost Auditors

The Board had appointed Messrs D. C. Dave & Co. Cost Accountants (FirmRegistration Number 000611) as Cost Auditor for conducting the audit of cost records ofthe Company for the Financial Year 2017-18.

The Board of Directors on the recommendation of the Audit Committee appointed MessrsD. C. Dave & Co. Cost Accountants (Firm Registration Number 000611) as the CostAuditors of the Company for the Financial Year 2018-19 under section 148 of the CompaniesAct 2013. Messrs D. C. Dave & Co. have confirmed that their appointment is within thelimits of section 141(3)(g) of the Companies Act 2013 and have also certified that theyare free from any disqualifications specified under section 141(3) and proviso to section148(3) read with section 141(4) of the Companies Act 2013.

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

As per the provisions of the Companies Act 2013 the remuneration payable to the CostAuditor is required to be placed before the Members in a General Meeting for theirratification. Accordingly a Resolution seeking Members' ratification for the remunerationpayable to Messrs D. C. Dave & Co. Cost Auditors is included in the Notice conveningthe Annual General Meeting.

Reporting of Frauds by Auditors

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


Particulars of the loans given investment made or guarantee given or security providedand the purpose for which the loan or guarantee or security is proposed to be utilised bythe recipient of the loan or guarantee or security are provided in Note Nos. 6 and 36 tothe Financial Statements.


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

All the deposits from public and Shareholders had already matured as at 31stMarch 2017. Out of the total outstanding 64 deposits of Rs. 50.11 lakhs from the publicand shareholders as at 31st March 2018 all deposits amounting to Rs.50.11 lakhs had matured and had not been claimed as at the end of the Financial Year.Since then 3 of these deposits of the value of Rs. 1.55 lakhs have been claimed.

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

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


Key Managerial Personnel (KMP)

The following have been designated as the Key Managerial Personnel of the Companypursuant to sections 2(51) and 203 of the Companies Act 2013 read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014: (a) Mr. Anand G.Mahindra – Executive Chairman (b) Dr. Pawan Goenka – Managing Director (c) Mr. VS Parthasarathy – Group CFO & Group CIO (d) Mr. Narayan Shankar – CompanySecretary

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

Employees' Stock Option Scheme

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

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

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

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

3. M&M Employees Welfare Fund No. 1

4. M&M Employees Welfare Fund No. 2

5. M&M Employees Welfare Fund No. 3

There are no material changes made to the above Schemes and these Schemes are incompliance with the SBEB Regulations. Your Company's Auditors Messrs B S R & Co. LLPhave certified that the Company's above-mentioned Schemes have been implemented inaccordance with the SBEB Regulations and the Resolutions passed by the Members for the2000 Scheme and the 2010 Scheme.

Information as required under the SBEB Regulations read with SEBI CircularCIR/CFD/POLICY CELL/2/2015 dated 16th June 2015 have been uploaded on theCompany's website and can be accessed at the Web-link: Reports/

Particulars of Employees and related disclosures

The Company had 296 employees who were in receipt of remuneration of not less than Rs.10200000 during the year ended 31st March 2018 or not less than Rs.850000 per month during any part of the year.

Details of employee remuneration as required under provisions of section 197(12) of theCompanies Act 2013 read with Rule 5(2) & 5(3) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are available at the Registered Officeof the Company during working hours 21 days before the Annual General Meeting andshall be made available to any Shareholder on request. Such details are also available onyour Company's website and can be accessed at the Web-link:

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

Industrial Relations

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

Your Company's focus continues towards propagating proactive and employee centricpractices. The Transformational Work Culture initiative which aims to create an engagedworkforce with an innovative productive and competitive shop-floor ecosystem continuesto grow in strength. The Transformational Work Culture Committee (TWCC) continuallyengages with long-term strategic initiatives which range from anticipated Labour Lawreforms to ‘Swachh Bharat Abhiyaan'. Some examples of the programs put in placeinclude ‘Rise for Associates' Industrial Relations Skills for Frontline OfficersCultural Diagnostics Projects Transformational work culture Projects e-Compliancee-Quizz for associates e-portal for reward and recognition of associates e-safety moduleand Code of Conduct for Associates. Some of the programs are run in collaboration withMahindra Leadership University (MLU).

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

The Mahindra Skill Excellence initiative is a holistic approach to enhance the skilland capabilities of shop floor associates and has received good participation acrossmanufacturing facilities. As a result of this effort an associate from your Companyrepresented India at the Worlds Skill Competition in Abu Dhabi in August 2017 and the‘Beijing Arc Cup Competition' for third year in a row.

In an endeavor to generate ideas towards improving quality reducing cost ensuringsafety and improving productivity your Company's shop floor associates generated on anaverage 20 ideas per person.

Significant emphasis was also laid towards raising awareness on health and wellness ofemployees through annual medical check-ups health awareness activities and diet food hasbecome a way of life over past three years. Your Company maintains an ‘EmployeeHealth Index' at an individual level and this has been a useful tool in identifyingemployees who require focused counselling and monitoring. Proactive and employee-centricshop floor practices a focus on transparent communication of business goals an effectiveconcern resolution mechanism and a firm belief that employees are the most valuableassets 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 havehelped your Company build trust and harmony. The Industrial Relations scenario continuedto be largely positive across all Manufacturing locations. Bonus settlements were amicablyagreed upon at all locations. The sustained efforts towards building a transformationalwork culture resulted in zero production loss in the Financial Year 2017-18 and helpedcreate a collaborative healthy and productive work environment.

Safety Occupational Health and Environment

During the year under review your Company revised its Safety Occupational Health& Environmental (SOH&E) Policy. The leadership's commitment towards SOH&E isdemonstrated through inclusion of compliance as well as voluntary commitments in therevised policy. SOH&E targets have been set as per the revised policy. Implementationof various initiatives under the policy and achievement of set targets were assessedthrough audits (both internal and external) and management reviews. At each Plantlocation annual events were organised and commemorated like National Safety Day/MonthWorld Environment Day Road Safety Week and Fire Service Week. Training programs wereconducted for all stakeholders as per the scheduled training calendar through variousphysical and e-learning modules. In the year under review your Company completed secondbatch of Accelerated Learning Program (ALP) on safety to encourage innovations and bestpractices related to SOH&E. To strengthen the safety culture Behaviour Based Safety(BBS) - Level 2 has been introduced at all plants. Your Company carried out statutorysafety audits including electrical safety audits of all facilities as per the amendedlegal requirements. For the year under review your Company achieved substantial reductionin the fire load at all the manufacturing plants. Your Company continued its commitment toimprove the wellbeing of employees and contract associates through various activitiesunder project Parivartan like organising physical fitness activities including WalkathonYoga Zumba medical checkups health consultation and counselling. Further all locationsobserved World Health Day World Heart Day World Kidney Day and World Diabetes Day.Way2Wellness sessions were conducted covering topics like Healthy Heart and Diabetic feet.

In line with the ‘Go Green' philosophy your Company is continuously adopting newtechniques to eliminate and minimise the environmental impact. Various projects have beenimplemented by your Company in air water and waste water management and solid wastemanagement. These initiatives are also extended to the supplier community of your Company.Your Company has adopted Global Reporting Initiative (GRI) - G4 Guidelines and hasundertaken projects aimed at climate change mitigation sustainable source use andprotection of bio-diversity. Some examples of successful initiatives are LED lightingproject Energy efficiency Motors Solar power installation and certified green buildingprojects with platinum and gold rated facilities. In addition to above World Ozone DayWorld Environment Day No Print Day World Earth Day World Water Day and EnergyConservation Week and Water Conservation Week are also observed on an annual basis.


All Plants of your Company have been recertified under standard ISO 14001: 2015 andOHSAS 18001: 2007. Further all plants are in the process of implementing integratedmanagement system along with adopting the revised environmental standard ISO 14001: 2015.

In March 2018 all seven plants of Automotive Sector were awarded TPM excellenceaward by Japanese Institute of Plant Maintenance (JIPM). In April 2018 five Plants ofyour Company also received certification for "Zero Waste to Landfill" fromIntertek USA.

The Company has revised its targets under SOH&E policy and these targets arereviewed periodically by senior management. The focused initiatives and reviews havehelped to improve SOH&E performance of your Company in the period 2017-18.



As mentioned in the previous Annual Report Mr. Deepak S. Parekh ceased to hold officeas an Independent Director of the Company from 8th August 2017 uponcompletion of his tenure as approved by the Shareholders at the 68th AnnualGeneral Meeting. Further Mr. T. N. Manoharan was appointed at the 71st AnnualGeneral Meeting held on 4th August 2017 as an Independent and Non-ExecutiveDirector of the Company for a period of 5 consecutive years commencing from 11thNovember 2016 to 10th November 2021.

Mr. Anand Mahindra retires by rotation and being eligible offers himself forre-appointment at the 72nd Annual General Meeting (AGM) of the Companyscheduled to be held on 7th August 2018.

The Company has received an intimation from Life Insurance Corporation of Indiainforming that Mr. S. B. Mainak has resigned from the Board of the Company. AccordinglyMr. S. B. Mainak ceased to be a Director of the Company with effect from 11thMay 2018.

The Board places on record its sincere appreciation of the valuable services renderedby Mr. S. B. Mainak during his tenure as a Director of the Company.

The Governance Nomination and Remuneration Committee on the basis of performanceevaluation of Independent Directors and taking into account the external businessenvironment the business knowledge acumen experience and the substantial contributionmade by Mr. M. M. Murugappan and Mr. Nadir B. Godrej during their tenure has recommendedto the Board that continued association of Mr. M. M. Murugappan and Mr. Nadir B.Godrej as Independent Directors of the Company would be beneficial to the Company. Basedon the above and the performance evaluation of Independent Directors the Board recommendsre-appointment of Mr. M. M. Murugappan and

Mr. Nadir B. Godrej as Independent Directors of the Company not liable to retire byrotation to hold office for a second term of 2 (two) consecutive years on the Board ofthe Company. The Company has received the requisite Notices from a Member in writingproposing their appointment as Independent Directors.

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

Pursuant to the provisions of the Companies Act 2013 and the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board has carried out anannual evaluation of its own performance and that of its Committees as well as performanceof the Directors individually. Feedback was sought by way of a structured questionnairecovering various aspects of the Board's functioning such as adequacy of the composition ofthe Board and its Committees Board culture execution and performance of specific dutiesobligations and governance and the evaluation was carried out based on responses receivedfrom the Directors.

A separate exercise was carried out by the Governance Nomination and RemunerationCommittee of the Board to evaluate the performance of individual Directors. Theperformance evaluation of the Non-Independent Directors and the Board as a whole wascarried out by the Independent Directors. The performance evaluation of the ExecutiveChairman of the Company was also carried out by the Independent Directors taking intoaccount the views of the Managing Director and Non-Executive Directors. The Directorsexpressed their satisfaction with the evaluation process. The Independent Directors andExecutive Chairman also carried out performance evaluation of the Managing Director of theCompany.

The details of programs for familiarization of the Independent Directors with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company number of programs and numberof hours spent by each Independent Director in terms of the requirements of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 are available on the Company'swebsite and can be accessed at the following Weblink: /resources/investor-reports/FY18/Annual Reports/

Your Company has adopted the following Policies which inter alia include criteria fordetermining qualifications positive attributes and independence of a Director: (a) Policyon Appointment of Directors and Senior Management and succession planning for orderlysuccession to the Board and the Senior Management; (b) Policy for remuneration of theDirectors Key Managerial Personnel and other employees.

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

Directors' Responsibility Statement

Pursuant to section 134(5) of the Companies Act 2013 your Directors based on therepresentations received from the Operating Management and after due enquiry confirmthat: (a) in the preparation of the annual accounts for the Financial Year ended 31stMarch 2018 the applicable accounting standards have been followed; (b) they had inconsultation with Statutory Auditors selected accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31stMarch 2018 and of the profit of the Company for the year ended on that date; (c) theyhave taken proper and sufficient care for the maintenance of adequate accounting recordsin accordance with the provisions of the Companies Act 2013 for safeguarding the assetsof the Company and for preventing and detecting fraud and irregularities; (d) they haveprepared the annual accounts on a going concern basis; (e) they have laid down adequateInternal Financial Controls to be followed by the Company and such Internal FinancialControls were operating effectively during the Financial Year ended 31st March2018; (f) they had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively throughoutthe Financial Year ended 31st March 2018.

Board Meetings and Annual General Meeting

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

During the year 1st April 2017 to 31st March 2018 eight BoardMeetings were held on: 30th May 2017 13th June 2017 4thAugust 2017 9th October 2017 10th November 2017 13thDecember 2017 9th February 2018 and 28th March 2018. The 71stAnnual General Meeting (AGM) of the Company was held on 4th August 2017.

Meetings of Independent Directors

The Independent Directors of your Company meet before the Board Meetings without thepresence of the Executive Chairman or the Managing Director or other Non-IndependentDirector or Chief Financial Officer or any other Management Personnel. These Meetings areconducted in an informal and flexible manner to enable the Independent Directors todiscuss matters pertaining to inter alia review of performance of Non-IndependentDirectors and the Board as a whole review the performance of the Executive Chairman ofthe 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 flowof information between the Company Management and the Board that is necessary for theBoard to effectively and reasonably perform their duties.

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

Audit Committee

The Board at its Meeting held on 4th August 2017 re-constituted the AuditCommittee and appointed Mr. T. N. Manoharan as the Chairman with effect from 8thAugust 2017. The Committee comprises of four Directors viz. Mr. T. N. Manoharan (Chairmanof the Committee) Mr. Nadir B. Godrej Mr. M. M. Murugappan and Mr. R. K. Kulkarni. Allthe Members of the Committee are Independent Directors and possess strong accounting andfinancial management knowledge. The Company Secretary of the Company is the Secretary ofthe Committee.

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


Corporate Governance

Your Company has a rich legacy of ethical governance practices many of which wereimplemented by the Company even before they were mandated by law. Your Company iscommitted to transparency in all its dealings and places high emphasis on business ethics.A Report on Corporate Governance along with a Certificate from the Statutory Auditors ofthe Company regarding compliance with the conditions of Corporate Governance as stipulatedunder 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 prescribedthereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is implemented through the Company's Whistle Blower Policy to enable the Directorsemployees and all stakeholders of the Company to report genuine concerns to provide foradequate safeguards against victimisation of persons who use such mechanism and makeprovision 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 beaccessed at the Web-link: AnnualReports/ Further details are available in the Report on CorporateGovernance that forms part of this Annual Report.

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

The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. Internal Complaints Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this Policy. The Policy is gender neutral. During the yearunder review 1 complaint with allegations of sexual harassment was filed which wasdisposed-off as per the provisions of The Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and as of 31st March2018 no complaint was pending. One complaint pending as on 31st March 2017was also disposed-off during the year under review.

Business Responsibility Report

The ‘Business Responsibility Report' (BRR) of your Company for the year 2017-18forms 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 byusing the levers of environmental and social responsibility while setting aspirationaltargets and improving economic performance to ensure business continuity and rapid growth.Your Company is committed to leverage ‘Alternative Thinking' to build competitiveadvantage in achieving high shareholder returns through customer centricity innovationgood 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 managementframework works at various levels across the enterprise. These levels form the strategicdefence cover of the Company's risk management. The Company has a robust organisationalstructure for managing and reporting on risks.

Your Company has constituted a Risk Management Committee of the Board which isauthorised to monitor and review risk management plan and risk certificate. The Committeeis also empowered inter alia to review and recommend to the Board the modifications tothe Risk Management Policy. Further the Board has constituted a Corporate Risk Councilcomprising the Senior Executives of the Company. The terms of reference of the Councilcomprises review of risks and Risk Management Policy on periodic intervals.

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


Corporate Social Responsibility (CSR)

Your Company's Corporate Social Responsibility efforts continue to be directed towardssupporting the constituencies of girls youth and farmers by innovatively supporting themthrough programs in the domains of education health and environment while harnessing thepower of technology. It is only through these sustained and continued efforts that yourCompany can build and consolidate its CSR initiatives which contribute to nation building.During the last financial year your Company has been making an impact through its ongoingCSR programs some of the notable ones include – Project Nanhi Kali which supportsthe education of underprivileged girls Mahindra Pride Schools and Mahindra PrideClassrooms which provide livelihood training to youth from socially and economicallydisadvantaged communities and a variety of other scholarship programs which range fromproviding opportunities to youth from low income group families to undergo diploma coursesat vocational 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. In the area of publichealth your Company sponsored Lifeline Express through which medical care and treatmentwas provided to communities who do not have access to any medical facilities. Furtheryour Company supported critical patients suffering from cancer and other life threateningillnesses and also lent support for setting up of the Head and Neck Cancer Institute.

Your Company also contributed to the environment by adding green cover through plantingof over 1.5 million trees this year through Project Hariyali. Your Company continues tosupport small and marginal farmers by training them in effective farming practicesincluding soil health crop planning creating model farms with bio-dynamic farmingpractices and increasing the water table with a view to increasing crop productivity.These initiatives are implemented through the Wardha Farmer Family Project Krishi MitraProject and Integrated Watershed Development Project. Your Company also partnered with theMaharashtra State Government to support the Village Social Transformation Mission of theGovernment. Your Company is working to create a ‘Zero Fatality Corridor' to ensure‘zero' deaths due to accidents on Mumbai Pune Expressway. In addition to the aboveCSR initiatives your Company has a vibrant ESOPs (Employee Social Options) platformthrough which the employees are provided opportunities to give back to the community.

During the last financial year your Company was awarded the prestigious‘Corporate Citizen of the Year 2017' by Economic Times as well as the ‘SociallyAware Corporate of the Year' at Business Standard Awards 2018 both being a validation ofthe Company's sustained efforts to ‘Rise for Good'.

CSR Policy

The Corporate Social Responsibility Committee had formulated and recommended to theBoard a Corporate Social Responsibility Policy (CSR Policy) which was subsequentlyadopted by it and is being implemented by the Company. The CSR Policy including a briefoverview of the projects or programs undertaken can be accessed at the Company's websitethrough the Web-link: AnnualReports/

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. TheCommittee inter alia reviews and monitors the CSR as well as Sustainability activities.

During the year under review your Company spent Rs. 81.97 crores on CSR activities.The amount equal to 2% of the average net profit for the past three financial yearsrequired to be spent on CSR activities was Rs. 81.27 crores. The detailed Annual Report onthe CSR activities undertaken by your Company in Financial Year 2018 is annexed herewithmarked as Annexure VI.


During the year under review the 10th Non-Financial Report was released forthe year 2016-17. This year's Report was the first ‘Integrated Report' conforming toreporting frameworks viz. International Integrated Reporting Council (IIRC) and GlobalReporting Guideline - ‘GRI G4 Core option'. The report was externally assured byDNV-GL.

Your Company continued the focus on the Environmental Social and Governance (ESG)parameters in the year under review by developing Mahindra Sustainability Framework toensure common language for sustainability across the Group. This framework definessustainability as building enduring businesses by rejuvenating the environment andenabling stakeholders to rise. Under the three pillars People Planet and Profit ofSustainability; various actions have been identified for implementation across the Group.Many of these actions are already underway as demonstrated by the Igatpuri Plant bygetting certified as ‘Water Positive' and being the 1st Plant in India tobe certified by Intertek as ‘Zero Waste to Landfill'.

The Company uses 63% less energy to produce a vehicle than what was done eight yearsago. Mahindra Towers at Worli and Kandivali are Indian Green Building Council (IGBC)Platinum Certified existing buildings. The Mahindra IT Centre at Kandivali is USGBC LEEDgold certified green building. Mr. Anand G. Mahindra Executive Chairman of your Companyrepresented the Corporate World Economic Forum at Davos and issued a ‘Call to Action'to all industries and businesses to adopt Science Based Targets to restrict average globaltemperature rise to 2 degree Celsius in alignment of Paris Climate Change Agreement. Mr.Anand Mahindra has been invited by Mr. Edmund G. Brown Governor of California to be theCo-Chair at the Global Climate Action Summit to be held in September 2018 in SanFrancisco California.

The Sustainability performance for your Company for the Financial Year 2017-18 will beready for release shortly.

Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo

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


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 ofthe Board of Directors' and ‘General Meetings' respectively have been duly compliedby your Company.

Extract of Annual Return

Pursuant to section 134(3)(a) and section 92(3) of the Companies Act 2013 read withRule 12(1) of the Companies (Management and Administration) Rules 2014 an extract of theAnnual Return as on 31st March 2018 in Form No. MGT-9 is attached asAnnexure VIII and forms part of this Report.


The Executive Chairman of the Company did not receive any remuneration or commissionfrom any of the subsidiary of your Company. The Managing Director of the Company did notreceive any remuneration or commission from any of the subsidiary of your Company.However the Managing Director has exercised ESOPs of a subsidiary company during theyear which were granted in the earlier year(s).

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions/ events on these items during the year underreview except as !WARDR stated hereunder:

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

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

3. Significant or material orders passed by the Regulators or Courts or Tribunals whichimpact 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 sharesfor the subscription/ purchase of which loan was given by the Company (as there is noscheme pursuant to which such persons can beneficially hold shares as envisaged undersection 67(3) (c) of the Companies Act 2013).

For and on behalf of the Board
Executive Chairman
Mumbai 29th May 2018