The Board of Directors ("the Board") of Mahindra Logistics Limited ("theCompany") is pleased to present their report along with the Audited FinancialStatements of the Company for the financial year ended 31st March 2022 ("financialyear under review" or "financial year 2021-22").
A. FINANCIAL SUMMARY AND OPERATIONAL HIGHLIGHTS
| || || || ||(Rs. in crores) |
| || |
|Particulars ||Financial year 2021-22 ||Financial year 2020-21 ||Financial year 2021-22 ||Financial year 2020-21 |
|Income || || || || |
|Revenue from Operations ||3631.08 ||2959.11 ||4083.03 ||3263.72 |
|Other Income ||9.56 ||15.50 ||12.19 ||17.47 |
|Total Income ||3640.64 ||2974.61 ||4095.22 ||3281.19 |
|Expenses || || || || |
|Cost of materials consumed ||9.81 ||- ||9.81 ||- |
|Changes in inventories of finished goods only ||(0.45) ||- ||(0.45) ||- |
|Employee benefit expenses ||282.20 ||280.43 ||300.00 ||296.46 |
|Operating expenses ||3085.79 ||2494.56 ||3494.53 ||2764.30 |
|Other expenses ||74.15 ||63.12 ||81.48 ||68.74 |
|Depreciation and amortisation expenses ||130.41 ||82.75 ||134.51 ||89.65 |
|Finance cost ||26.04 ||17.11 ||29.52 ||20.09 |
|Total Expenses ||3607.95 ||2937.97 ||4049.40 ||3239.24 |
|Profit before exceptional items and tax ||32.69 ||36.64 ||45.82 ||41.95 |
|Exceptional items (net) ||- ||4.00 ||- ||2.75 |
|Profit Before Tax ("PBT") ||32.69 ||32.64 ||45.82 ||39.20 |
|Provision for tax ||8.25 ||8.65 ||11.25 ||10.02 |
|Profit After Tax ("PAT") ||24.44 ||23.99 ||34.57 ||29.18 |
|Share of Profit/(Loss) of Joint Venture ||- ||- ||0.01 ||(0.39) |
|Non-Controlling interests ||- ||- ||(2.49) ||(1.21) |
|Profit after tax post share of Profit/(Loss) of Joint Venture and Non-Controlling interests ||24.44 ||23.99 ||37.07 ||30.00 |
|Other comprehensive income || || || || |
|Re-measurements of the defined benefit plans ||(1.03) ||0.09 ||(0.90) ||0.07 |
|Income tax relating to items that will not be reclassified to profit or loss ||0.26 ||(0.02) ||0.22 ||(0.01) |
|Total other comprehensive income ||(0.77) ||0.07 ||(0.68) ||0.06 |
|Total comprehensive income ||23.67 ||24.06 ||33.90 ||28.85 |
|Attributable to || || || || |
|(a) Owners of the Company ||23.67 ||24.06 ||36.39 ||30.06 |
|(b) Non-Controlling interest ||- ||- ||(2.49) ||(1.21) |
|Balance of Profit from earlier years ||366.89 ||353.57 ||369.68 ||352.91 |
|Dividend Paid ||(1794) ||(10.74) ||(17.94) ||(10.74) |
|Balance carried forward to reserves ||372.62 ||366.89 ||388.13 ||369.68 |
|Net worth ||564.65 ||551.17 ||580.15 ||553.96 |
During the financial year under review the Company's revenue from operations increasedby 22.71% to Rs.3631.08 crores as compared to Rs.2959.11 crores in the previousfinancial year. The PAT stood at Rs.24.44 crores for the financial year under review asagainst Rs.23.99 crores for the financial year 2020-21. The total comprehensive income forthe financial year under review was lower by 1.62% at Rs.23.67 crores (after accounting ofdeferred tax income of Rs.2.17 crores) as compared to Rs.24.06 crores in the previousfinancial year (after accounting of deferred tax expense of Rs.0.91 crores).
The Company recorded its highest consolidated sales revenue during financial year2021-22 with revenue growth of 25% on a year-on-year basis. The consolidated revenue fromoperations for the financial year amounted to Rs.4083.03 crores as compared toRs.3263.72 crores in the previous financial year. Our revenue growth for financial year2021-22 was driven by E-commerce Consumer Automotive and Freight Forwarding businesses.
The consolidated EBITDA grew by 38.34% from Rs.151.69 crores for the previousfinancial year to Rs.209.85 crores for the financial year 2021-22. The consolidated PATgrew by 18.47% to Rs.34.57 crores for the financial year 2021-22 as compared to Rs.29.18crores for the previous financial year.
Through our two business segments - Supply Chain Management and Enterprise MobilityServices we cater to the myriad needs of over 300 customers across automotiveengineering consumer goods pharmaceuticals telecom e-commerce banking IT financialservices and insurance and consulting businesses while also offering integrated employeetransportation solutions to organisations.
At a consolidated level revenue from the SCM segment contributed 96.46% and theEnterprise Mobility Services segment contributed 3.54%. Performance highlights of theCompany's segments during the financial year under review are stated below:
Supply Chain Management ("SCM")
The SCM segment revenues stood at Rs.3486.73 crores for the financial year underreview as compared to Rs.2840.03 crores for the previous year growth of 22.77%year-on-year on standalone basis.
The non-Mahindra Group consolidated SCM revenue grew by 28.97% year-on-year toRs.1995.76 crores for the financial year under review as compared to Rs.1547.47 croresfor the previous financial year.
Enterprise Mobility Services ("EMS")
The EMS segment reported a growth of 21.22% in its total revenues during the financialyear under review amounting to Rs.144.35 crores as compared to Rs.119.08 crores for theprevious year on standalone basis.
The Company continues to enjoy a strong credit rating which denotes a high degree ofsafety regarding timely servicing of its financial obligations. During the financial yearunder review ICRA Limited re-affirmed [ICRA] AA(Stable)/A1+(Stable) credit ratingsassigned to the sanctioned Long and Short-term Fund and Non-fund based facilities of theCompany of Rs.235 crores. The credit rating of [ICRA] A1+ assigned to the commercial paperprogramme of the Company was also re-affirmed and withdrawn at the request of the Companyas the Company has not issued any Commercial paper and there is no amount outstandingagainst Commercial Paper during the financial year under review. The reaffirmation ofratings reflects the Company's strong financial profile reflected by its low leverage andstrong debt coverage indicators.
Ratings issued by ICRA Limited are disclosed on Company's website and can be accessedat the weblink https://mahindralogistics.com/financial-information/
The Annual Audited Consolidated and Standalone Financial Statements of the Company areprepared in accordance with the Indian Accounting Standards ("Ind AS") asnotified under Sections 129 and 133 of the Companies Act 2013 ("the Act") readwith the Companies (Accounts) Rules 2014 and other relevant provisions of the Act and theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 ("the SEBI Listing Regulations").
The Company has adopted Ind AS 116 'Leases' with the date of initial application being1st April 2019 using the modified retrospective approach. The Company has applied thestandard to its leases with the cumulative impact recognised on the date of initialapplication.
The Annual Audited Consolidated and Standalone Financial Statements of the Company havebeen prepared on a going-concern basis.
Publication and access to the Financial Statements and Results
The Company publishes its Unaudited Consolidated and Standalone Financial Results whichare subjected to limited review on a quarterly basis. The Annual Audited Consolidated andStandalone Financial Results are published on an annual basis. Upon publication theFinancial Statements and results are uploaded on the websites of the stock exchanges andthe website of the Company.
In accordance with Section 136 of the Act the Ministry of Corporate Affairs circularno. 20/2020 dated 5th May 2020 read with circular no. 02/ 2022 dated 5th May 2022 theAnnual Audited Financial Statements of Company and the subsidiary companies and allrelevant documents thereof are uploaded on the website of the Company and can beaccessed at the weblink: https:// mahindralogistics.com/financial-information/
Change in the nature of the business
There have been no changes in the nature of the business and operations of the Companyduring the financial year under review.
Acquisitions and Investments
Acquisition of Meru
With an objective to grow its presence in the shared mobility space and to consolidatethe mobility business ownership the Company entered into a share purchase agreement toacquire 100% paid-up share capital of Meru Mobility Tech Private Limited("MMTPL") V-Link Automotive Services Private Limited ("VASPL") andV-Link Fleet Solutions Private Limited ("VFSPL") fellow subsidiaries of theCompany from Meru Travel Solutions Private Limited ("MTSPL") and 100% paid-upshare capital of MTSPL from Mahindra & Mahindra Limited ("M&M") Holdingand Promoter Company of the Company during the financial year 2021-22.
Meru Cabs a ridesharing company founded in 2006 revolutionized the way peopletravelled in cabs by offering AC cabs at their doorstep with a single call. Meru has asignificant presence in the airport ride hailing segment and provides on-call and employeemobility services to corporates in India. Meru also has a large number of ElectricVehicles in their fleet. The acquisition further strengthens the Company's mobilitybusiness and enhances its range of mobility solutions with strategic focus on enterprisecustomers and electric mobility.
Post completion of the acquisition MMTPL VASPL VFSPL and MTSPL would becomewholly-owned subsidiaries of the Company and would continue to remain subsidiaries ofM&M.
Investment in Whizzard
With an objective to enhance the Company's presence and capabilities in the last-miledelivery and fulfilment services for its customers the Company entered into a SharePurchase Agreement Share Subscription Agreement and Shareholders' Agreement to acquire upto 60% of the paid-up share capital (on a fully diluted basis) of ZipZap Logistics PrivateLimited ("Whizzard") during the financial year 2021-22.
Hyderabad based Whizzard operates an intra-city distribution network for digitalcommerce and last mile delivery. Expanding technology based last mile services is anintegral part of the Company's growth strategy and this acquisition helps accelerateaddition of technology geographical coverage and operational capabilities of the Company.
On 8th April 2022 the Company acquired 36% of the paid-up share capital (on fullydiluted basis) of Whizzard making Whizzard an Associate of the Company with effect fromthe said date.
Material changes and commitments affecting the financial position of the Company
No material changes and commitments affecting the financial position of the Companyhave occurred after the end of the financial year 2021-22 till the date of this report.
Impact of COVID -19
The COVID-19 pandemic continued to be a global challenge creating disruption across theworld. While the global economy showed early signs of recovery in the beginning of 2021the repeated waves of COVID infection overwhelmed the Country's health infrastructure. Thepartial lockdown situation in the Country during most part of the financial year underreview led to rise in inflation impacting recovery especially across emerging economiesand dented the pace of economic activity.
The pandemic impacted the logistics sector in both positive and negative ways. On onehand it has increased financial pressure on a lot of companies in the industryespecially transporters. On the other hand it has accelerated some key transformationswithin the logistics sector viz. changing channel landscape increasing adoption ofmulti-modal logistics integrated service offerings technology integration to driveefficiencies etc. Digital solutions and usage of technology has become essential formaking supply chains more robust driving end-to-end visibility ensuring data securityand real-time product traceability and improving government industry collaboration as weare preparing for the future.
Despite these challenges we also saw many tailwinds in our business. Opening of theeconomy spurred growth in all our end markets. Leveraging on the trends emerging from theexternal environment we continue to enhance our focus on delivering value throughcustomised integrated solutions new customer acqusitions and operational excellence anddrive technology investments to maintain profitable growth and improve scalability of ourbusinesses in the prevalent economic scenario.
B. DIVIDEND FOR FINANCIAL YEAR 2021-22
As per the Dividend Distribution Policy the dividend payout is determined basis theperformance of the Company available financial resources investment requirements andtaking into account optimal shareholder return and other internal and external factors.Within these parameters the Company would endeavour to maintain a dividend pay-out of anoptimal range of at least 20% of annual audited standalone PAT of the Company.
Basis the performance of the Company for the financial year 2021-22 the Board of yourCompany is pleased to recommend a final dividend of Rs.2/- per equity share (being 20% onface value of Rs.10/- each) out of the accumulated balance of retained earningsrepresenting the accumulated surplus in the profit and loss account as at 31st March2022.
The recommended equity dividend outgo for the financial year 2021-22 represents 59% ofstandalone PAT as of 31st March 2022 and would result in cash outflow of approximatelyRs.14.4 crores including withholding tax if declared. For financial year 2020-21 theCompany paid final dividend of Rs.17.94 crores representing 75% of standalone PAT as of31st March 2021.
The Dividend pay-out is in accordance with the Dividend Distribution Policy of theCompany.
The final dividend is subject to approval of Members at the ensuing Annual GeneralMeeting ("AGM") and deduction of tax at source and if approved shall be payableto those Members whose names appear in the Register of Members and list of beneficialowners as on the book closure date. The Register of Members and Share Transfer books ofthe Company will remain closed from Saturday 23rd July 2022 to Friday 29th July 2022(both days inclusive) for the purpose of payment of the final dividend.
The Company has not paid any Interim Dividend during the financial year under review.
Taxation on Dividend
Dividends paid or distributed by a company after 1st April 2020 are taxable in thehands of the Shareholders. Accordingly the Company is required to deduct tax at source("TDS") at rates (plus surcharge and cess) as applicable at the time of makingthe payment of the final dividend if approved and declared at the ensuing AGM.
Request to update information
Details of Shareholders as available in the Register of Members/List of beneficialowners on Book Closure date will be relied upon by the Company for the purpose ofcomplying with the applicable withholding tax provisions and payment of the finaldividend if declared. All Shareholders are therefore requested to kindly ensure thatdetails such as PAN residential status category of holding bank account details (IFSCMICR) contact number email address and postal address details are updated in theirrespective demat account(s) maintained with the Depository Participant(s) ("DP")for equity shares held in demat mode or with the Registrar and Share Transfer Agent of theCompany - Link Intime India Private Limited ("RTA") in form ISR-1 in case ofequity shares held in physical form on or before Friday 22nd July 2022.
Web-portal for submission of tax declarations/forms
To enable the Company to determine and deduct appropriate tax Shareholders can submittheir tax exemption declarations/forms and supporting documents along with theself-attested copy of PAN directly on the secure web-portal of the RTA: https://web.linkintime.co.in /formsreg/submission-of-form- 15g-15h.html by selecting"Mahindra Logistics Limited" in the Company dropdown and submitting the formafter filing the details prompted therein through an one-time password based verificationon or before Friday 22nd July 2022.
Unpaid and Unclaimed Dividend
The details of dividends declared by the Company in the past years and lying unpaid andunclaimed as on 31st March 2022 is given hereunder:
|Financial Year ||Date of declaration of Dividend ||Dividend declared per equity share ||Total amount of Dividend paid ||Dividend lying unpaid and unclaimed with the Company ||No. of Shares on which Dividend is lying unpaid and unclaimed with the Company ||Last date for claiming unpaid and unclaimed Dividend |
|2020-21 ||27th July 2021 ||Rs.2.50 ||Rs.17.94 crores ||Rs.29705.00* ||12146 ||30th August 2028 |
|2019-20 ||30th July 2020 ||Rs.1.50 ||Rs.10.74 crores ||Rs.29661.50* ||20293 ||30th August 2027 |
|2018-19 ||1st August 2019 ||Rs.1.80 ||Rs.12.86 crores ||Rs.31111.20 ||17284 ||4th September 2026 |
|2017-18 ||2nd August 2018 ||Rs.1.50 ||Rs.10.67 crores ||Rs.32092.50 ||21395 ||5th September 2025 |
* net of tax deducted at source
Shareholder-wise statement of the unpaid and unclaimed dividend lying with the Companyas on 31st March 2022 is uploaded on the Company's website and can be accessed at theweblink: https://mahindralogistics.com/shareholder-information/ and on the website of theMinistry of Corporate Affairs at www.iepf.gov.in/
Transfer to the Investor Education and Protection Fund ("IEPF")
There is no unpaid and unclaimed dividends of previous years or any equity shares onwhich dividends are lying unpaid or unclaimed for seven consecutive years or more whichhave been transferred to the IEPF up to 31st March 2022 or are due to be transferred tothe IEPF during the financial year 2022-23 in terms of the applicable provisions of theAct read with the IEPF Authority (Accounting Audit Transfer and Refund) Rules 2016 asamended from time to time.
Transfer to reserves
The Board has decided not to transfer any amount to the General Reserves. The profitsearned during the financial year have been retained in the Profit & Loss Account ofthe Company for business and operations of the Company.
Dividend Distribution Policy
The Company has adopted a Dividend Distribution Policy in compliance with Regulation43A of the SEBI Listing Regulations.
The Dividend Distribution Policy of the Company was amended by the Board of the Companyat its meeting held on 29th April 2021 to inter alia maintain a Dividend pay-out of anoptimal range of at least 20% of the Annual Audited Standalone PAT of the Company. ThePolicy is enclosed herewith as Annexure I and forms part of this Integrated AnnualReport.
The Dividend Distribution Policy is also placed on the Company's website and can beaccessed from the weblink: https://mahindralogistics.com/disclosures/
C. SUBSIDIARIES AND ASSOCIATES
As on date of this report the Company has two Indian unlisted subsidiaries viz. LordsFreight (India) Private Limited ("Lords") and 2x2 Logistics Private Limited("2x2").
Our Subsidiary companies primarily deal in the business of transportation and freightforwarding and continue to contribute to the overall growth in revenues and performance ofthe Company.
Operational and performance highlights of the Company's Subsidiary companies for thefinancial year 2021-22 is given hereunder:
I. Lords provides international freight forwarding services for exports andimports customs brokerage operations project cargo services and charters. During thefinancial year 2021-22 Lords earned gross income of Rs.452.65 crores as against Rs.299.42crores in the previous year registering a record growth of 51.18%. Its Net Profit afterTax increased by 144.12% and stood at Rs.15.99 crores for the financial year under reviewas against Rs.6.55 crores for the previous year.
The Company holds 99.05% stake in Lords as on 31st March 2022.
II. 2x2 specializes in offering automotive outbound logistics solutions tofour-wheeler and two-wheeler industries. During the financial year 2021-22 the grossincome of 2x2 de-grew by 34.19% amounting to Rs.24.10 crores as against Rs.36.62 crores inthe previous financial year. 2x2 incurred a net loss of Rs.5.88 crores for financial year2021-22 as compared to a net loss of Rs.2.63 crores for the previous financial year.
The Company holds 55% stake in 2x2 as on 31st March 2022.
In terms of the criteria laid down in the Company's Policy on Material Subsidiaries andthe SEBI Listing Regulations as amended Lords has become a Material Subsidiary of theCompany w.e.f. financial year 2022-23.
Transtech Logistics Private Limited ("Transtech")
Transtech is engaged in the business of providing Transport Management Solutions tothird party logistics companies shippers and transporters on a 'Software as a Service'model (SaaS) under the brand name 'ShipX'. For the financial year 2021-22 Transtechrecorded gross income of Rs.2.94 crores as compared to Rs.1.98 crores in the previousfinancial year an increase of 48.48% year- on-year. Transtech has earned a net profitafter tax of Rs.0.03 crores during the financial year under review as against a net lossof Rs.0.98 crores in the previous financial year.
The Company holds 39.79% stake in Transtech as on 31st March 2022.
As on 31st March 2022 the Company has no Associate Companies.
Changes during the financial year 2021-22
During the financial year under review no company has become or has ceased to be aSubsidiary Associate or Joint Venture of the Company.
Performance and contribution of the Subsidiaries and Joint Venture
A report on the highlights of the performance and financial position of each of theCompany's subsidiaries and joint venture company is included in the Consolidated FinancialStatements. The salient features of their Financial Statements and their contribution tooverall performance of the Company as required under Section 129(3) of the Act read withthe rules framed thereunder is provided in Form AOC-1 and forms part of this IntegratedAnnual Report.
There has been no material change in the nature of the business of the Subsidiary orJoint Venture companies of the Company during the financial year 2021-22.
D. AWARDS AND RECOGNITIONS
During the financial year under review the Company was felicitated with manyprestigious awards and certificates of appreciations for excellence in its areas ofbusiness and continues to receive recognitions for its dedication to work and commitmentto delivering results to name a few:
Gold Overall Excellence Award for 3PL Warehousing and Freight Forwarding at theCII Scale Awards 2021;
Gold Award at the CII National Level Championships Trophy in 'Industry 4.0Service sector' category under Safety and Ergonomics theme;
Gold award for the 2nd Edition-CII National Competition on Digitalization by theConfederation of Indian Industry in Chennai;
Excellent award at the International Convention (ICQCC - 2021) and NationalConventional for Quality Concepts (NCQC-2021) organised by the Quality Circle Forum ofIndia;
Super Gold award at the 32nd Digital Chapter Convention on Quality Conceptsorganised by the Quality Circle Forum of India (QCFI) Nagpur;
MLL's Logos Luhari - Block 2 & 3 warehouses received the Indian GreenBuilding Council (IGBC) Platinum Rating;
Two Gold Five Silver and three Bronze awards at the Virtual Competition on'KAIZEN POKA - YOKE SMED & LCA - 2021' organized by the Quality Circle Forum ofIndia - Mumbai Chapter;
Mahindra Rise Awards 2021 - the Company received third place at the MahindraGroup level for its efforts to make the Company truly diverse and inclusive;
The Company was recognized by the Indian Medical Association Nashik forproviding free transportation services for the movement of medical oxygen cylinders duringthe second wave of COVID-19 infection in May 2021.
E. INVESTOR RELATIONS
The Company continuously strives for excellence in its Investor Relations engagementthrough structured earnings conference-calls and periodic investors/ analyst interactionsviz. one-on-one/group meetings video conference calls and participation in investorconferences organised by reputed global and domestic broking houses to provide an overviewof the Company's operations business and financial performance and industry developments.
Interactions with Investors
The Company continued its interactions with Indian and overseasanalysts/investors/funds during the financial year under review through audio-videoconference calls given the Covid-19 waves and lockdown during the financial year underreview. The Company believes in building a relationship of mutual understanding with itsinvestors/analysts and ensures uniform dissemination of information by uploading materialinformation about the Company on the Company's website and on the website of the StockExchanges where equity shares of the Company are listed for access to all the Investors/Analysts Shareholders and General Public.
An advance intimation of interactions scheduled with Investors Fund Managers Analystsand outcome of the interactions are promptly disseminated to the Stock Exchanges anduploaded on the website of the Company.
Earnings conference calls
The Company hosts earnings conference calls for the investors/analysts/funds on aquarterly basis after declaration of the financial results schedule of which is intimatedwell in advance to the Stock Exchanges and uploaded on the website of the Company. Theinvitation along with Dial-in details of the earnings conference calls is also uploaded onthe website of the Company.
An earnings presentation summarising the Company's financial results and performance isreleased upon publication of financial results on a quarterly basis and is made availableto the general public through uploads on the website of the Stock Exchanges and theCompany in advance of the earnings call for active and healthy participation.
To ensure symmetric dissemination of information and transparency the outcomeincluding audio and text transcripts of the earnings conference calls are also uploaded onthe website of the Company and filed with the Stock Exchanges.
The same can be accessed from the weblink: https://mahindralogistics.com/investor-information/
The Company observes a 'Silent/Quiet period' for 15 days prior to the announcement ofits quarterly financial results. During this period no interactions with investors/analysts/funds are held to ensure protection of Company information. Notice of the Silentperiod is uploaded on the website of the Company.
F. INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference to theFinancial Statements commensurate with the size scale and complexity of operations ofthe Company. Regular audits and review processes ensure that such systems are reinforcedon an ongoing basis. The Company's Internal Financial Controls were deployed throughInternal Control - Integrated Framework (2013) issued by the Committee of SponsoringOrganisations of the Treadway Commission (COSO) that addresses material risks in theCompany's operations and financial reporting objectives.
The Company continues to invest in various digitisation initiatives to automatecontrols to an extent possible in order to minimize manual errors and lapses. The Companyhas added new automated controls considering the increase in size and complexity of itsoperation.
The Company internally evaluated the Internal Financial Controls of the Company duringthe financial 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 evaluation carried no material weakness was observed in the effectiveness of internalcontrol systems nor any deficiencies in the design or operation of such internal controlswere observed. Further there were no significant changes in internal control overfinancial reporting and the internal control systems were operating adequately.
The Statutory Auditors have also examined the internal financial controls of theCompany and have submitted an unmodified opinion on the adequacy and operatingeffectiveness of the internal financial controls over financial reporting as at 31stMarch 2022.
Further there were no letters of internal control weaknesses issued by the InternalAuditor or the Statutory Auditors during the financial year under review. The Company'sFinancial Statements are prepared on the basis of the Significant Accounting Policies thatare carefully selected by Management and approved by the Audit Committee and the Board.These Accounting Policies are reviewed and updated from time to time.
The Company uses SAP ERP systems as a business enabler and to maintain its books ofaccounts. The transactional controls built into the SAP ERP systems ensure appropriatesegregation of duties appropriate level of approval mechanisms and maintenance ofsupporting records.
The Company has also adopted policies and procedures for ensuring the orderly andefficient conduct of its business the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information. The Code of Conduct forSenior Management and Employees of the Company ("Code") commits Management tofinancial and accounting policies systems and processes. The Corporate GovernancePolicies and the Code are communicated across the Company. The systems standard operatingprocedures and controls are reviewed by Management. These systems and controls are auditedby Internal Audit and their findings and recommendations are reviewed by the AuditCommittee which ensures the implementation.
Pursuant to Rule 8(5)(viii) of the Companies (Accounts) Rules 2014 and based on theframework of internal financial controls and compliance systems established and maintainedby the Company the assessments and audit carried out by the internal auditors and thestatutory auditors including the audit of internal financial controls over financialreporting by the statutory auditors and the reviews performed by management and the AuditCommittee the Board is of the opinion that the Company's internal financial controls laiddown with reference to the Financial Statements were adequate and effective during thefinancial year 2021-22.
G. MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis for the financial year under review asstipulated under Regulation 34(2)(e) read with Part B of Schedule V of the SEBI ListingRegulations is presented in a separate section and forms part of this Integrated AnnualReport. It provides mandatory disclosures required under the SEBI Listing Regulationscomprising of inter-alia details about the overall industry structure economic scenariosoperational and financial performance of the Company business strategy internal controlsand their adequacy risk and concerns and other material developments during the financialyear 2021-22.
H. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All Related Party Transactions entered during the financial year under review were inthe ordinary course of business and on arms' length basis pre-approved by the AuditCommittee comprising of only Independent Directors and in accordance with the Policy onmateriality of and on dealing with Related Party Transactions formulated by the Company.
Prior omnibus approval of the Audit Committee is obtained for transactions with relatedparties which are repetitive in nature. A statement on Related Party Transactionsspecifying the details of the transactions entered pursuant to the omnibus approvalgranted is reviewed by the Audit Committee and the Board on a quarterly basis.
As on 31st March 2022 M&M is promoter of the Company and Mahindra Engineering andChemical Products Limited and Partners Enterprise form part of the Promoter group of theCompany. Apart from M&M no person or entity held 20% or more equity shares of yourCompany during the financial year under review.
Material Related Party Transactions
The Company has entered into material Related Party Transactions i.e. transactionsexceeding 10% of the annual consolidated turnover of the Company as per the last auditedfinancial statements with M&M the Holding Company and Promoter of the Company interms of approval granted by the Members at the 12th AGM held on 1st August 2019 and theAudit Committee of only Independent Directors. These transactions were in the ordinarycourse of business and on arms' length basis details of which as required to be providedunder Section 134(3)(h) of the Act are disclosed in Form AOC-2 annexed herewith as AnnexureII forming part of this report.
Details of related party transactions entered into by the Company in terms of IndAS-24 have been disclosed in the notes to the Standalone and Consolidated FinancialStatements forming part of this Integrated Annual Report.
The Company did not have any contracts or arrangements with related parties in terms ofSection 188(1) of the Act.
Policy on Materiality of and on Dealing with Related Party Transactions
During the financial year under review the Board on recommendation of the AuditCommittee amended the Company's Policy on Materiality of and dealing with Related PartyTransactions ("RPT Policy") effective 1st April 2022 to incorporate theamendments inserted by the SEBI (Listing Obligations and Disclosure Requirements) (SixthAmendment) Regulations 2021.
The amended policy as approved by the Board is uploaded on the Company's website andcan be accessed at the weblink: https://mahindralogistics.com/ disclosures/
AUDITORS' AND THEIR REPORTS
Deloitte Haskins & Sells LLP Chartered Accountants (Firm RegistrationNo.:117366W/W-100018) ("Deloitte") is the Statutory Auditor of the Companyappointed by the Members of the Company at their 10th AGM held on 14th August 2017.Deloitte was appointed for a term of five years commencing from the conclusion of the 10thAGM up to the conclusion of the ensuing 15th AGM.
In terms of the provisions of the Act an audit firm acting as the statutory auditor ofa company is eligible to be appointed as statutory auditor for two terms of five yearseach. The first term of Deloitte as statutory auditor of the Company expires at theconclusion of the 15th AGM of the Company scheduled to be held on 29th July 2022.Considering inter alia the past performance credentials independence pendingorders/proceedings relating to professional matters of conduct market standing of thefirm effectiveness of the audit teams and processes the Board and the Audit Committee ofthe Company have recommended the re-appointment of Deloitte as Statutory Auditors of theCompany for a second term of five years to hold office from the conclusion of the 15th AGMto be held on 29th July 2022 up to the conclusion of the 20th AGM of the Company to beheld in the year 2027.
Deloitte has consented in writing to their proposed reappointment and confirmed thattheir re-appointment if approved would be within the limits specified under Section141(3)(g) of the Act. They have also furnished a declaration in terms of Section 141 ofthe Act that they are eligible to be re-appointed as Statutory Auditors of the Company andthat they have not incurred any disqualification under the Act. Deloitte has alsosubjected itself to peer review process of the ICAI and holds a valid peer reviewcertificate issued by the Peer Review Board of ICAI.
The above proposal with disclosures as required under Regulation 36(5) of the SEBIListing Regulations and the Act forms part of the Notice of the ensuing AGM for approvalof the Shareholders.
Unmodified Statutory Auditor Reports
The Statutory Auditor's Reports on the Annual Audited Standalone and ConsolidatedFinancial Statements for the financial year 2021-22 forms part of this Integrated AnnualReport and are unmodified i.e. they do not contain any qualification reservation oradverse remark.
M/s. Makarand M. Joshi & Co. Practicing Company Secretaries (Certificate ofPractice No.:3662) ("MMJC") is appointed as the Secretarial Auditor of theCompany to conduct the audit of the secretarial records of the Company and for providingAnnual Secretarial Compliance Report Corporate Governance Certifications othercertifications as may be required under the SEBI Listing Regulations and ESOPCertification as per the Securities and Exchange Board of India (Share Based EmployeeBenefits and Sweat Equity) Regulations 2021.
Annual Secretarial Compliance Report
The Company has obtained an Annual Secretarial Compliance Report for the financial yearended 31st March 2022 from MMJC in compliance with Regulation 24A of the SEBI ListingRegulations and the SEBI circular CIR/ CFD/CMD1/27/2019 dated 8th February 2019. The saidReport is submitted to the Stock Exchanges within the prescribed statutory timelines anduploaded on the website of the Company at the weblink: https://mahindralogistics.com/disclosures/.
Unmodified Secretarial Audit Report and Annual Secretarial Compliance Report
The Secretarial Audit Report and the Annual Secretarial Compliance Report for thefinancial year ended 31st March 2022 are unmodified i.e. they do not contain anyqualification reservation or adverse remark.
The Secretarial Audit Report in Form No. MR-3 as per the provisions of Section 204 ofthe Act read with Rules framed thereunder for the financial year ended 31st March 2022 isannexed to this Boards' Report as Annexure III and forms part of this report.
The Annual Secretarial Compliance Report is annexed to the Report on CorporateGovernance and forms part of this Integrated Annual Report.
Secretarial Audit of Material Unlisted Indian Subsidiary
Lords a material unlisted Indian subsidiary of the Company has carried out SecretarialAudit for the financial year 2021-22 from M/s. Parikh & Associates Practicing CompanySecretaries (Firm Registration Number : P1988MH009800) pursuant to Section 204 of the Act.In terms of Regulation 24A of the SEBI Listing Regulations the Secretarial Audit Reportof Lords is annexed to the Report on Corporate Governance and is unmodified i.e. it doesnot contain any qualification reservation or adverse remark or disclaimer.
The Company has in place an adequate internal audit framework to monitor the efficacyof the internal controls with the objective of providing to the Audit Committee and theBoard an independent objective and reasonable assurance on the adequacy andeffectiveness of the Company's processes. The Board has appointed Mr. K. N. Vaidyanathanas the Internal Auditor of the Company with effect from 1st April 2020. The InternalAuditor reports directly to the Chairman of the Audit Committee. The Internal Auditfunction develops an audit plan for the Company which inter-alia covers core businessoperations as well as support functions and is reviewed and approved by the AuditCommittee on an annual basis. The internal audit approach verifies compliance with theoperational and system related procedures and controls.
Significant audit observations are presented to the Audit Committee together with thestatus of the management actions and the progress of the implementation of therecommendations on a regular basis.
For the financial year 2021-22 the provisions of Cost Audit and maintenance of costrecords as specified by the Central Government under Section 148 of the Act read with theRules framed thereunder are not applicable to the Company and hence such accounts andrecords are not required to be maintained by the Company during the financial year underreview.
Reporting of frauds by Auditors
During the financial year under review the Statutory Auditor and the SecretarialAuditor of the Company have not reported any instance of fraud committed in the Company byits officers or employees to the Audit Committee under Section 143(12) of the Act.
J. PARTICULARS OF LOANS INVESTMENTS GUARANTEES AND SECURITIES
Particulars of the loans given investments made and the purpose for which the loan isproposed to be utilised by the recipient of the loan are provided in Note Nos. 9 and 38 tothe Standalone Financial Statements. No loans/advances have been made to companies/ firmsin which Directors are interested. The Company has not subscribed to the securities of anyother body corporate or provided any guarantees and securities in connection with anyloans given during the financial year under review.
During the financial year under review the Company provided Inter-Corporate Deposit ofRs.2 crores to Lords for meeting its working capital requirements the same was repaid byLords during the financial year under review.
Disclosure of transactions which are required to be disclosed in the annual accounts ofthe Company pursuant to Regulation 34(3) read with Para A of Schedule V of the SEBIListing Regulations are disclosed in Note No. 38 to the Standalone Financial Statements.
K. PUBLIC DEPOSITS AND LOANS/ADVANCES
The Company has not accepted any deposits from the public or its employees during thefinancial year under review and no amount on account of principle or interest thereon wasoutstanding as of 31st March 2022. The Company has not accepted any loans from itsDirectors or from Holding/Subsidiary/Joint Venture Company of the Company during thefinancial year under review.
Key Managerial Personnel
As on 31st March 2022 the following persons have been designated as Key ManagerialPersonnel ("KMP") of the Company pursuant to the provisions of Sections 2(51)and 203 of the Act read with the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014:
1. Mr. Rampraveen Swaminathan Managing Director & CEO;
2. Mr. Yogesh Patel Chief Financial Officer ("CFO");
3. Ms. Ruchie Khanna Company Secretary ("CS").
Changes in KMP during the financial year
As a part of Mahindra's good people practices of talent movement within the group Ms.Brijbala Batwal ceased to be the Company Secretary (Key Managerial Personnel) andCompliance Officer of the Company with effect from close of 31st January 2022 and Ms.Ruchie Khanna was appointed as Company Secretary (Key Managerial Personnel) and ComplianceOfficer of the Company with effect from 1st February 2022.
Employee Stock Option Schemes
Employee Stock Options are recognised as an effective instrument to attract and retaintalent and align the interest of employees with that of the Company thereby providing anopportunity to the employees to participate in the growth of the Company and to alsocreate longterm wealth in the hands of employees.
The Company has in force two Employee Stock Option schemes under the provisions of theSEBI (Share Based Employee Benefits and Sweat Equity) Regulations 2021 ("SEBI SBEB& SE Regulations") :
1. Mahindra Logistics Limited - Key Executive Stock Option Scheme 2012 ("KESOSScheme 2012"); and
2. Mahindra Logistics Employee Restricted Stock Unit Plan 2018 ("RSU Plan2018"); collectively referred to as "Schemes"
During the financial year under review the Company upon receipt of Shareholders'approval at the 14th AGM held on 27th July 2021 upon recommendation of Nomination andRemuneration Committee ("NRC") and the Board amended the RSU Plan 2018 to coverthe employees of the subsidiary companies of the Company. Further the Board at theirmeeting held on 27th October 2021 on recommendation of NRC further amended the RSU Plan2018 to align the same with SEBI SBEB & SE Regulations which entitled companies tovary the terms of the scheme to meet the regulatory amendments without seekingShareholders' approval by way of special resolution.
During the financial year under review the NRC granted 40885 Restricted Stock Units("RSUs") to the eligible employees of the Company and the Subsidiary Company inaccordance with the RSU Plan 2018 approved by the Shareholders. No eligible employee(including Director) of the Company has been granted RSUs equal to or exceeding 1% of theissued share capital of the Company at the time of grant.
No stock options were granted under the KESOS Scheme 2012 during the financial yearunder review. The stock options vested to eligible employees of the Company under KESOSScheme 2012 prior to the initial public offer of the Company were exercised during thefinancial year under review. The unvested stock options have been cancelled and added backto the pool. There are no stock options outstanding under the KESOS Scheme 2012 as on 31stMarch 2022.
A certificate from the Secretarial Auditor of the Company viz. MMJC certifying thatthe Schemes have been implemented in accordance with the SEBI SBEB & SE Regulationsand the resolutions passed by the Members for the respective Schemes will be placed at theensuing AGM for inspection by the Members.
Disclosure on the Schemes as required under Regulation 14 of the SEBI SBEB & SERegulations has been uploaded on the website of the Company and can be accessed at theweblink: https://mahindralogistics.com/financial- information/
Particulars of employees and related disclosures
The Company has 13 employees who were in receipt of remuneration of not less thanRs.10200000/- during the financial year under review or not less than Rs.850000/- permonth during any part of the financial year ended 31st March 2022.
Disclosures with respect to the remuneration of the Directors the KMPs and theemployees of the Company as required under Section 197(12) of the Act read with Rule 5(1)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 aregiven in Annexure IV to this Report.
Details of employee remuneration as required under the provisions of Section 197(12) ofthe Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 can be accessed at the weblink:https://mahindralogistics. com/financial-information/ and any Member interested inobtaining a copy of the same may write to the Company Secretary of the Company.
M. EMPLOYEE RELATIONS
As a leading 3PL Solutions provider the Company is a people driven organisation withover 22800 employees and workers (on-rolls and off-rolls) spread over 500 client andoperating locations across India. With the inherent belief that people are our greatestasset the employer-employee relationship can be characterised as fair just trusting andcaring which has been enmeshed into the employee lifecycle and ensuring that throughcontinual reinforcement via communication platforms and the celebration of successstories alignment in the organisation is strengthened. The Human Resource("HR") function has ensured that it has driven process excellence by digitisingwork processes in tandem with policy changes so that technology-driven engagementefficiency simplicity scalability and empowerment could be achieved.
The Company has been certified as a Great Place to Work whereby it has beenevaluated on the Trust Index and the Culture Audit to understand the relationship anemployee shares with the organization its own jobs and colleagues at work. The Companyhas robust processes for overall employee development ensuring collaboration inclusionand providing support across their lifecycle. The Company has designed andinstitutionalized robust practices to help sustain positive perception among employees.
The Company has been focusing on digitization Nectar the human resource managementsystem platform has been implemented for white-collared employees.
It has empowered the employees with easy data navigation efficient workflows and alower turnaround time for processing employee lifecycle transactions. The Company is alsotaking actions for implementation of said platform for blue-collar staff thereby drivinghigher levels of automation and process efficiency.
The Company's intranet portal 'HIVE' has become a potent platform for employeesto connect and engage with each other. It provides a single-window communication aboutorganizational events and ensures that employees are updated on the latest developments.To further drive communication and engagement amongst employees the Company also sharesweekly podcasts.
The Company revamped its performance management process as well as career growth andcompensation practices. The grades and designations are restructured with the addition ofnew grades based on benchmarking with industry practices. Appraisal Grievance Redressalmechanism has been launched to address employee grievances in a timebound andeffective manner that provides employees with a forum to have their concerns addressed.
To assess the engagement levels of such a large workforce the organization administersthe Mahindra CARES (MCARES) engagement survey for its on-roll employees. Based onthe philosophy that "your culture will determine your success" the MahindraGroup has created an ecosystem of engagement that is anchored by its core purpose. TheMCARES results are shared with Managers and their teams to initiate action planning.Brainstorming sessions are conducted with the team of respective managers in the absenceof the manager to ensure open dialogue and debate within the team.
The Company continues its efforts to propagate and implement employee centric practicesby engaging all employees including fixed term and contract employees through severalinitiatives/programmes including the following:
V.E.E.R the Veteran Employment Engagement and Retention Program waslaunched to train and deploy retired Armed Forces Veterans in operations. The Companyinducted the 3rd batch of armed forces veterans successfully;
Diversity & Inclusion ("D&I") the Company has madeprogress in the D&I spectrums by hiring and inclusion of People with Disabilities andtalent from the LGBTQ community;
You Said - We Did a campaign that reassures employees that their opinionsmatter and they are an integral part of the change journey whereby projects linked tocapability building hygiene action planning communication organizational developmentprojects for functions or business units with low scores leadership development andtalent management have been conducted;
iCoach programme designed as a leadership development initiative hassuccessfully enabled the creation of a coaching culture where internally certified Coachescoach employees with potential so that they are equipped with the right skills to overcomechallenges and achieve their goals;
Learning Management System was launched this year to accelerate learningthat offers courses on leadership behavioral and technical topics;
Sandhaan a platform designed to groom future leaders at the mid managementlevel. Based on the premise that Happy Employees create Happy Customers participantsshare their learnings with their colleagues and then drive business impact projects bycreating 'Moments of Truth' for customers;
Disha a program for first time supervisors on the shop floor to strengthentheir ability to manage teams and ensure result orientation with execution excellencealigned to the Mahindra Leadership Rise competencies wherein 1500+ employees were coveredvia this initiative by leveraging on in-house leaders and faculty;
AXLERATE platform which was created to drive functional capabilitybuilding across various domain in supply chain and operations management. The focus wasto develop an overall perspective about best practices from the industry. The Company hasalso introduced AXELRATE 2.0 to develop capabilities of employees in partnership withNITIE an external agency;
Prapantaran the Six Sigma Black Belt certification programme was launchedfor 15 leaders they have identified projects linked to optimisation cost reductionproductivity enhancement etc. specific to their role in the Company with an aim to enhancethe problem-solving capability of senior leaders in the Company;
Sanjeevani a platform for harmonious work relations for carrying outseveral initiatives linked to inclusive participation capability building communicationand welfare creating higher engagement for all employment categories especially FixedTerm and Third-party Contract staff;
Udaan a Second Career Programme for women under the Diversity and Inclusioncampaign;
Swayam a Health and wellness platform for physical and emotional well-beingof employees.
The Company has also prepared itself adequately to manage the challenges posed byCOVID-19 through empowered workgroups.
Incidence Management Teams
monitored and drove initiatives to mitigate associated risks by taking decisive actionat impacted locations. In addition to this the Company also introduced various policieson COVID-19 leave health insurance at the site level additional home care facilitiesand vaccination for eligible employees. The collective proactivity of the IncidenceManagement Teams ensured that the employees were provided with a safe work environment.During the lockdown the organization focused on virtual learning a total of 125000+man- days of virtual learning were conducted
A detailed note on HR initiatives of the Company is included in section titledManagement Discussion and Analysis which is a part of this Integrated Annual Report
N. ENVIRONMENT HEALTH AND SAFETY
The Company being a leading 3PL solutions provider recognises its people as importantassets and is committed to providing a safe and healthy work environment at all operatinglocations. The Company has adopted an Environment Health and Safety ("EHS")policy to establish effective control measures for EHS management across all locations.The EHS policy is displayed at all prominent locations and offices and communicated to allstakeholders. The Company demonstrates strong leadership commitment towards EHS throughits management safety council headed by the Managing Director & CEO of the Company.The Company is a registered member of National Safety Council and CII.
Preventing and reducing workplace accidents is a key focus for the Company and isemphasised at all levels through constant communications awareness programmes andtrainings.
The EHS policy is supported by safety management programs conducted for near missrecordings safety kaizens safety trainings safety observation tours to identify assessand control EHS risks. Multiple measures and actions are implemented through competencytraining programs like defensive driver training first aid firefighting emergencypreparedness. External training through certified trainer in material handling lashingchemical safety is also being conducted.
The Company has also initiated ACE a learning program which includes training onsafety practices and best practices related to EHS. During the financial year under reviewthe Company has trained over 50+ manpower on creating and sustaining safety culture atsite.
The Company also carries out internal safety audits and external electrical audits offacilities for assessing and managing safety risks with respect to the warehousing andlogistics verticals. Safety Themes and various events like National Road Safety WeekNational Safety Week World Environment Day and Drivers' Day are rolled out PAN India on aregular basis for awareness of a safety culture across the organisation. The Companycontinues its commitment to improve the wellbeing of employees and contract workmen byorganising health examination camps health check-ups and eye check-up camps.
Every year World Environment Day is celebrated by plantation of trees across the regionwith government authorities celebration of World Earth day by switching off the lightscreating awareness for environment protection among the employees. The Company adopted newtechnologies like new power source such as Solar energy adopting LED light water savinginitiatives at locations to support local communities.
During the financial year under review the Company has implemented following safetyinitiatives:
LIFE - Life Impacting Injuries and Fatalities Elimination a safetyinitiative program that furthers the Company's objective of inculcating a safety cultureacross the Company;
Digital Initiative - M-Safe Dashboard and Augmented Reality /Virtual RealityElectrical Safety Training Module covering Electrical Safety electrical fire fighting andemergency responses
The Company believes in adopting an integrated approach to drive excellence ineverything it does. At the organisational level the Company follows 'The Mahindra Way'("TMW") the Mahindra Group's Business Excellence Model. It is an integratedapproach that extends beyond the quality of our products and services to encompassexcellence in all functions processes and operations within the businesses in the Group.Management and key business processes are selected for driving improvements through astructured and systematic approach. Every year the Company undergoes an annual assessmentby experienced assessors and basis the feedback received improvements are carried out byfollowing a PDCA (Plan-Do-Check-Act) approach. This provides us with regular feedback onour progress and also serves as a common yardstick to measure TMW maturity (on process andresults) for the Company and also across different companies in the Group. The Companyfollows a continuous improvement approach across businesses and functions. At operatingsites / workplaces high Impact Projects are selected for driving improvements usingsystematic way of problem solving and task achieving approach and Lean Six Sigma approach.These projects are implemented through use of 7 Quality control tools advancedstatistical tools lean tools like 5S process mapping waste elimination value streammapping makigami analysis etc.
The Company continued to undertake quality and improvement initiatives across theorganisation during the financial year under review. The Company successfully implemented6500+ Kaizens 25+ quality circles 100+ yellow belt projects 50+ green belt projectsand 15+ black belt projects in the financial year 2021-22 covering KPI improvementsreduction in customer complaints Safety Customer cost savings etc. The Company alsofocused heavily on the capability building programs as per the needs of the employees andfeedback from the customers. Over 1100 employees were trained on daily work managementand standardization 5S task achieving quality control Mahindra yellow belt Mahindragreen belt Mahindra black belt Plan-Do-Check-Act line feeding transportation etc.
The Company continues to sustain its commitment to inspire and enable all employees toembrace the quality culture as part of their routine work. To this end in November andDecember 2021 the Company celebrated Quality Month at PAN India level with a theme on"Reimagining Mobility Solutions Systems and Processes for sustainable future"with focus on spreading a quality culture across all locations through various fun filledactivities like Kaizen Poster Slogan Quality Quiz5S Best Site for Sustainability aspart of knowledge sharing Industry experts were invited to address employees on currenttrends of Total Quality Management Lean and customer satisfaction etc.
Integrated Management System
The Company continues to stay competitive in the market and deliver on our promise toprovide quality services to all our customers every single time. The Company has wellestablished rigorous processes and systems in place to ensure quality team performanceand productivity efficiency safety quick decision making etc.
The Company has successfully completed its Second Integrated Management System (IMS).IMS is a combination of three international standards ISO9001: 2015 (Quality ManagementSystem) ISO14001:2015 (Environmental Management System) & ISO 45001:2018(Occupational Health and Safety Management System) surveillance audit.
The operations of the Company demonstrated successful sustenance of IMS during theonline audit conducted at 8 locations and Corporate Office in January 2022. Thesestandards & processes further enable the Company to improve the quality of servicesreducing the costs achieve the Company objectives and live by its Purpose & PurposePrinciple.
P. BOARD & COMMITTEES
As on 31st March 2022 the Board of the Company consisted of ten Directors comprisingof a Non-Executive Chairman an Executive Director (Managing Director & CEO) twoNon-Executive Non-Independent Directors and six Independent Directors of whom two areWomen Independent Directors.
Director Appointments/Re-appointments for Members approval
The Board of the Company on recommendations of the NRC inter-alia considering thecriteria of preferred skills and expected role of the directors vis-a-vis thebackground qualifications skills and expertise possessed experience and proficiencyability to devote time commitments and having due regard to diversity on the Board and tomaintain an orderly succession planning has recommended the following appointments/re-appointments for approval of Members of the Company at the ensuing AGM. The Company hasreceived the requisite notices from Member under section 160 of the Act proposing thebelow appointments/re- appointments.
Proposal seeking approval of the Shareholders for the said appointments/re-appointmentwith disclosures as required under Act and the SEBI Listing Regulations forms part of theNotice of the ensuing AGM.
Ms. Avani Davda Independent Director
Ms. Avani Davda (DIN: 07504739) was appointed as a Non-Executive Independent Directorof the Company for a first term of five consecutive years commencing from 6th June 2018up to conclusion of the AGM to be held in 2022. Accordingly the first term of office ofMs. Avani Davda as a Non- Executive Independent Director of the Company is due to expireat the conclusion of the ensuing 15th AGM scheduled to held on 29th July 2022.
The Board of the Company at its meeting held on 26th April 2022 based on therecommendation of the NRC and given the high ratings and positive outcome of herperformance evaluation carried out by the NRC and the Board has recommended there-appointment of Ms. Avani Davda as Non-Executive Independent Director for a second termof five consecutive years commencing from 30th July 2022 to 29th July 2027 (both daysinclusive) not liable to retire by rotation to the Members for approval through specialresolution at the ensuing AGM (prior to expiry of her term). Ms. Avani Davda confirms tothe criteria of independence prescribed under the Act and the SEBI Listing Regulations.
Ms. Avani Davda is registered in the data bank maintained by the Indian Institute ofCorporate Affairs ("IICA") and has qualified the proficiency test conducted byIICA. The Board basis recommendation of the NRC and considering the skills experienceand acumen possessed by Ms. Avani Davda is of the opinion that she is a person ofintegrity and possesses the relevant skills expertise experience (including proficiency)and capabilities identified to continue as an Independent Director of the Company and isIndependent of the Management of the Company.
Ms. Avani Davda has consented to and is not disqualified from being re-appointed as anindependent Director in terms of Section 164 of the Act read with applicable rules madethereunder. She is not debarred from holding the office of Director by virtue of any orderissued by SEBI or any other such authority.
Brief profile and other disclosures and details required as per the Act and the SEBIListing Regulations are given in the explanatory statement to the AGM Notice.
Mr. Ameet Hariani Independent Director
Mr. Ameet Hariani (DIN: 00087866) was appointed as an Additional (Non-Executive andIndependent) Director of the Company not liable to retire by rotation to hold office forfirst term commencing with effect from 1st May 2022 up to 30th April 2027 (both daysinclusive) and holds office as an Additional Director up to the date of the ensuing AGM ofthe Company.
The Board at its meeting held on 26th April 2022 basis recommendation of NRC assessedthe balance of skills knowledge and experience available with the Board as a wholevis-a-vis Mr. Ameet Hariani's background qualification skills sets expertise abilityto devote time disclosures and declarations submitted and was of the opinion that Mr.Ameet Hariani is a person of integrity and possesses the relevant skills expertiseexperience (including proficiency) and capabilities identified for being appointed as anIndependent Director of the Company. Accordingly the Board subject to the approval of theShareholders at the ensuing AGM appointed Mr. Ameet Hariani as Non-Executive IndependentDirector of the Company a first term of five consecutive years commencing from 1st May2022 up to 30th April 2027 (both days inclusive) not liable to retire by rotation.
Mr. Ameet Hariani confirms to the criteria of independence prescribed under the Act andthe SEBI Listing Regulations and is Independent of the Management of the Company.
Mr. Ameet Hariani is registered in the data bank maintained by the Indian Institute ofCorporate Affairs ("IICA") and is exempted from appearing the proficiency testconducted by IICA. Mr. Ameet Hariani has consented to and is not disqualified from beingappointed as an independent Director in terms of Section 164 of the Act read withapplicable rules made thereunder. He is not debarred from holding the office of Directorby virtue of any order issued by SEBI or any other such authority.
The brief profile and other disclosures and details required as per the Act and theSEBI Listing Regulations are given in explanatory statement to the AGM Notice.
Director Retiring by Rotation
Mr. Rampraveen Swaminathan Managing Director and CEO
I n terms of Section 152 of the Act Mr. Rampraveen Swaminathan Managing Director(DIN: 01300682) retires by rotation at the ensuing AGM and being eligible has offeredhimself for re-appointment at the ensuing 15th AGM scheduled to be held on 29th July2022. The Board basis recommendation of the NRC recommends his re-appointment asDirector of the Company.
Mr. Rampraveen Swaminathan has consented to and is not disqualified from beingre-appointed as Director in terms of Section 164 of the Act read with applicable rulesmade thereunder. He is not debarred from holding the office of Director by virtue of anyorder issued by SEBI or any other such authority. He is not related to any otherDirectors/KMPs of the Company.
Brief profile and other disclosures and details required as per the Act and the SEBIListing Regulations are given in the additional information section of the AGM Notice.
Directors appointed during the financial year 2021-22
During the financial year 2021-22 the Shareholders of the Company at the 14th AGM heldon 27th July 2021 basis recommendation of the Board and the NRC approved theappointment of Dr. Anish Shah and Mr. Amit Kumar Sinha on the Board of the Company andre-appointment of Mr. Ranu Vohra and Mr. Darius Pandole as Independent Directors of theCompany as given hereunder:
|Director ||Designation ||Terms and conditions of appointment |
|Dr. Anish Shah (DIN: 02719429) ||Chairman and Non-Executive Non-Independent Director ||From 2nd April 2021 liable to retire by rotation. |
|Mr. Amit Kumar Sinha (DIN: 09127387) ||Non-Executive Non-Independent Director ||From 29th April 2021 liable to retire by rotation. |
|Mr. Ranu Vohra (DIN: 00153547) ||Independent Director ||Second term of office of five consecutive years commencing from 25th July 2022 to 24th July 2027 at such remuneration as approved by the Board from time to time within the Shareholders approved limits |
|Mr. Darius Pandole (DIN:00727320) ||Independent Director ||Second term of office of five consecutive years commencing from 25th July 2022 to 24th July 2027 at such remuneration as approved by the Board from time to time within the Shareholders approved limits |
Cessations during financial year 2021-22
Mr. V. S. Parthasarathy Chairman and NonExecutive Director
Mr. V. S. Parthasarathy (DIN:00125299) Non-Executive (Non-Independent) Director andthe erstwhile Chairman of the Board of the Company resigned from the Board of the Companywith effect 2nd April 2021 to pursue other interests. Consequently he also ceased to bea Member of the NRC from the said date.
Mr. Parag Shah Non-Executive Director
Mr. Parag Shah (DIN:00374944) resigned from the position of Non-Executive(Non-Independent) Director of the Board of the Company due to his pre-occupation witheffect from close of business hours of 29th April 2021. Consequently he also ceased tobe a Member of the NRC Stakeholders' Relationship Committee Risk Management CommitteeCorporate Social Responsibility Committee and Investment Committee of the Board from thesaid date.
Mr. S. Durgashankar Non-Executive Director
Mr. S. Durgashankar (DIN: 00044713) Non-Executive (Non-Independent) Director retiredby rotation at 14th AGM held on 27th July 2021 Although being eligible he had notoffered himself for re-appointment due to preoccupation.
Consequently he also ceased to be Member of the Audit Committee Stakeholders'Relationship Committee and Corporate Social Responsibility Committee of the Board from thesaid date.
The Board places on record it's deep appreciation for the valuable contributions madeby Mr. V.S. Parthasarthy Mr. Parag Shah and Mr. S. Durgashankar during their tenure withthe Company.
Declaration by Independent Directors
All the Independent Directors of the Company have given declarations and confirmed thatthey meet the criteria of Independence as provided under Section 149(6) of the Act andRegulation 16(1)(b) of the SEBI Listing Regulations and that they are not aware of anycircumstance or situation which exist or may be reasonably anticipated that could impairor impact their ability to discharge their duties with an objective independent judgmentand without any external influence. The Independent Directors of the Company areregistered in the Independent Directors data bank maintained by the IICA and unlessexempted have also passed the online proficiency self-assessment test conducted by IICA.
The Board of the Company after taking these declarations on record and undertaking dueveracity of the same concluded that the Independent Directors of the Company are personsof integrity and possess the relevant expertise proficiency and experience to qualify asIndependent Directors of the Company and are Independent of the Management of the Company.
A diverse Board enables efficient functioning through its access to broad perspectivesand diverse thought processes. A truly diverse Board includes and makes good use ofdifferences in the thought perspective knowledge skills industry experiencebackground race gender and other distinctions between Directors. The Board recognisesthe importance of a diverse composition and has adopted a Board Diversity Policy whichsets out the approach to diversity. The Board diversity policy of the Company is availableon the website of the Company at https://mahindralogistics. com/disclosures/
Pursuant to the applicable provisions of the Act and the SEBI Listing Regulations theBoard of the Company at its meeting (following the NRC and Independent Director meeting)carried out an annual evaluation of its own performance performance of its Committeesthe performance and independence of Independent Directors as well as the performance ofthe Directors individually (including Independent Directors proposed for re-appointment)for financial year 2021-22. The Board also carried out performance evaluation of theManaging Director & CEO of the Company.
The Independent Directors in a separate meeting carried out the evaluation of theperformance of the Chairman of the Company considering the views of Executive andNon-Executive Directors the performance of the NonIndependent Directors and the Board asa whole and also assessed the quality quantity and timeliness of flow of informationbetween the Company Management and the Board that is necessary for the Board toeffectively and reasonably perform their duties.
The NRC at its meeting reviewed the evaluations and the implementation and complianceof the evaluation exercise done for the financial year 2021-22.
Process of evaluation
The performance was evaluated basis feedback for each of the evaluations sought by wayof structured questionnaires through a secured electronic portal. The questionnaires forperformance evaluation are comprehensive and in alignment with the guidance note on Boardevaluation issued by the SEBI vide its circular dated 5th January 2017. The performanceevaluation parameters covers various attributes/functioning of the Board such as adequacyof the composition of the Board and its Committees the Board culture execution andperformance of specific duties Board's functioning such as Board effectiveness Boardmeetings quality quantity and timeliness of the information flow between the BoardMembers and the Management Board composition and Member participation quality andtransparency of discussions time devoted by the Board to strategy etc. based on thecriteria approved by the NRC. The evaluators were also able to give qualitative feedbackand comments apart from responding to the questionnaire. A detailed note on process ofevaluation is provided in the Report on Corporate Governance which forms part of thisIntegrated Annual Report.
Outcome and results of evaluation
The outcome of the evaluations was presented to the Board the NRC and the IndependentDirectors at their respective meetings for assessment and development of plans/suggestivemeasures for addressing action points that arise from the outcome of the evaluation.
All Directors of the Company as on 31st March 2022 participated in the evaluationprocess. The Directors expressed their satisfaction on the parameters of evaluation theimplementation and compliance of the evaluation exercise and the outcome of the evaluationprocess.
The evaluation exercise for the financial year 2021-22 inter alia concluded thatIndependent Directors appointed on the Board fulfilled the criteria of Independence as setout in the SEBI Listing Regulations and the Act the Board conducts its affairseffectively and has the right mix of background capabilities competenciesqualifications experiences and time to serve the Company the Board operates in acohesive atmosphere of openness and trust. The Directors were also satisfied with thetimeliness and flow of information and documents.
Suggestions provided to enhance the Board's effectiveness have been noted and taken upfor implementation.
The suggestions from previous evaluations were implemented by the Company.
Familiarisation Program for Independent Directors
The Directors are afforded many opportunities to familiarise themselves with theCompany its Management and its operations during their association with the Company. TheCompany conducts induction and familiarisation programs for the Directors joining theBoard including site visits to familiarise them. All the Independent Directors of theCompany are made aware of their roles and responsibilities at the time of theirappointment through a formal letter of appointment which also stipulates terms andconditions of their engagement. The Managing Director & CEO and the Senior Managementprovide an overview of the operations and familiarise the Directors on matters related tothe Company's values and commitments. They are also introduced to the organisationstructure constitution terms of reference of the Committees board proceduresmanagement strategies etc. Further
the Directors are on a quarterly basis apprised on the powers role andresponsibilities and constitution of the Board Committees its charter and terms ofreference and changes therein meetings held during a quarter.
The Board Members are apprised by the Senior Management at quarterly Board Meetings byway of presentations which include industry outlook competition update company overviewoperations and financial highlights regulatory updates presentations on internal controlover financial reporting succession planning strategic investment etc. which not onlygive an insight to the Directors on the Company and its operations but also allows them anopportunity to interact with the Senior Management.
The Directors are encouraged to participate in orientation & learning sessionsconducted by third-party experts/organisations. During the year under review theIndependent Director of the Company participated in an online orientation programmecovering Boardroom Dynamics and role and responsibilities of Directors in line with recentlaws and expectations from stakeholder. The Company has a web-based portal i.e. the Boardportal accessible to all the Directors which inter-alia contains the followinginformation:
Roles responsibilities and liabilities of Directors under the Act and the SEBIListing Regulations;
Board Agenda and Presentations;
Code of Conduct for Directors;
Terms and conditions of appointment of Independent Directors;
Details of familiarisation programs imparted during the financial year under review inaccordance with the requirements of the SEBI Listing Regulations are available on theCompany's website and can be accessed at the weblink:https://mahindralogistics.com/disclosures/.
Remuneration Policy and criteria for determining attributes qualificationindependence and appointment of Directors
A Policy on Appointment and Remuneration of Directors and Senior Management andSuccession Planning ("Appointment and Remuneration Policy") is adopted andimplemented by the Board in accordance with the applicable provisions of the Act and theSEBI Listing Regulations. The said Policy inter-alia includes criteria for determiningqualifications positive attributes independence of directors identification of personswho are qualified to become Directors Key Managerial Personnel and Senior ManagementPersonnel in accordance with the criteria laid down in the Policy and the basis forpayment of remuneration to the Directors of the Company KMPs Senior Management and otheremployees of the Company.
The Company has in place processes for orderly succession planning of its Directors andSenior Management which aims to identify high growth individuals train them and feed thepipelines with new talent. The Company has a process of identifying Hi-pots and criticalpositions and mapping suitable successors for these positions.
The Appointment and Remuneration Policy is provided in Annexure V and forms partof this report. The Policy is also uploaded on website of the Company and can be accessedfrom the weblink: https://mahindralogistics. com/disclosures/
During the financial year under review the Board on recommendation of NRC amended itsAppointment and Remuneration Policy to align the existing employee grade structure withindustry standards.
Remuneration to Directors
The NRC determines and recommends to the Board the compensation payable to allDirectors within the limits approved by the Shareholders and prescribed under theapplicable provisions of the Act and the SEBI Listing Regulations. The NRC also reviewsand recommends to the Board the remuneration of the Senior Management Personnel of theCompany.
None of the Non-Executive Directors of the Company received remuneration in excess of50% of the total remuneration paid to all Non-Executive Directors during the financialyear under review.
The Managing Director & CEO of the Company does not draw any remuneration orcommission from the Holding Company or the Subsidiary companies of the Company.
Details of remuneration payable to Directors of the Company is provided in the Reporton Corporate Governance which forms part of this Integrated Annual Report.
Directors' Responsibility Statement
Pursuant to Section 134(5) of the Act your Directors based on representation from themanagement and after due enquiry confirm that:
a. I n the preparation of the annual accounts for the financial year ended 31st March2022 the applicable accounting standards had been followed and there are no materialdepartures therein;
b. They had in consultation with Statutory Auditors selected such accounting policiesand applied them consistently and made judgments and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company at theend of the financial year on 31st March 2022 and of the profit of the Company for thefinancial year ended on that date;
c. They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d. They have prepared the annual accounts on a going concern basis;
e. They have laid down internal financial controls to be followed by the Company andsuch internal financial controls were adequate and were operating effectively during thefinancial year ended 31st March 2022;
f. They have 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 2022.
During the financial year ended 31st March 2022 five Board Meetings were held. Fordetails of meetings of the Board please refer to the Corporate Governance Report whichis a part of this Integrated Annual Report.
Annual General Meeting
The 14th AGM of the Company was held on Tuesday 27th July 2021.
Meeting of Independent Directors
The Independent Directors of the Company meet without the presence of other Directorsor the Management of the Company.
The Meetings are conducted to enable the Independent Directors to inter-alia discussmatters pertaining to review of performance of the Non-Independent Directors the Board asa whole and the Chairman of the Company (taking into account the views of the NonExecutiveDirectors) and to assess the quality quantity and timeliness of flow of informationbetween the Company's Management and the Board that is necessary for the Board toeffectively and reasonably perform their duties.
During the financial year under review the Independent Directors met twice i.e. on27th April 2021 and 27th October 2021. The Meetings were well attended by theIndependent Directors of the Company.
As on 31st March 2022 the Audit Committee comprised of five Non-Executive Directorsall of whom are Independent Directors. All Members of the Audit Committee including theChairman possess strong accounting and financial management knowledge.
Composition of Audit Committee
Details of the composition of the Audit Committee as on 31st March 2022 is givenhereunder:
Mr. Ajay Mehta Independent Director - Chairman
Mr. Darius Pandole Independent Director - Member
Ms. Avani Davda Independent Director - Member
Ms. Malvika Sinha Independent Director - Member
Mr. Dhananjay Mungale Independent Director - Member
The Company Secretary of the Company acts as the secretary to the Audit Committee.
Changes in composition of the Audit Committee
During the financial year 2021-22 the Board inducted Mr. Dhananjay MungaleIndependent Director as a Member and Dr. Anish Shah as permanent invitee of the AuditCommittee with effect from 29th April 2021.
Mr. S. Durgashankar Non-Executive Director ceased to be the member of the AuditCommittee with effect from 27th July 2021 and Mr. Parag Shah Non-Executive Directorceased to be permanent invitee of the Audit Committee with effect from 29th April 2021consequent to cessation of their directorship with the Company during the financial yearunder review.
Recommendations of the Audit Committee
All the recommendations made by the Audit Committee were accepted by the Board of theCompany during the financial year under review.
Other Board Committees
Details of other Board Committees constituted under the Act and the SEBI ListingRegulations their compositions Meetings held attendance of the Members at the CommitteeMeetings are provided in the Corporate Governance Report which forms part of thisIntegrated Annual Report.
The composition of the Board Committees is also uploaded on the website of the Companyand can be accessed through the weblink: https://mahindralogistics.com/board-of-directors/#committee.
The Corporate Governance Policies guide the conduct of affairs of the Company andclearly delineate the roles responsibilities and authorities at each level of itsgovernance structure and key functionaries involved in the governance.
The Board has adopted two detailed Codes of Conduct - one for Board members and theother for the senior management and employees of the Company. An affirmation of complianceto the said Codes is received from the Directors Senior Management Personnel andemployees of the Company on an annual basis.
The Company is committed to transparency in all its dealings and places high emphasison business ethics. A detailed Report on Corporate Governance along with a Certificatefrom a Practicing Company Secretary regarding compliance with the conditions of CorporateGovernance as stipulated under Schedule V of the SEBI Listing Regulations is included as aseparate section and forms part of this Integrated Annual Report.
Vigil Mechanism / Whistle Blower Policy
The Vigil Mechanism as envisaged in the Act the Rules framed thereunder and the SEBIListing Regulations is implemented through the Company's Whistle Blower Policy. TheWhistle Blower Policy provides a mechanism for the Directors employees and all thestakeholders of the Company to report their genuine concerns and provides adequatesafeguard against victimization to those who use such mechanism. The Policy also makesprovision for direct access to the Chairperson of the Audit Committee. The Company alsohas a Business Ethics Governance Council who is responsible for steering all activitiesrelated to ethics and governance in the Company.
All Stakeholders who have a concern to raise can access the totally secureindependently monitored and transparent modes of logging of complaints which areaccessible 24x7 viz.
Online web-portal: https://ethics.mahindra.com:
Toll free hotline number: # 000 800 100 4175;
Writing to the Company at postal address: Mahindra Logistics Limited ArenaSpace 10th & 11th Floor Plot No. 20 Jogeshwari Vikhroli Link Road Near Majas BusDepot Jogeshwari - (East) Mumbai -400060.
Directly writing to the Chairman of the Audit Committee through e-mail:email@example.com or by letter addressed to -
The Chairman Audit Committee
C/o Chief Financial Officer Mahindra Logistics Limited Arena Space 10th & 11thFloor
Plot No. 20 Jogeshwari Vikhroli Link Road
Near Majas Bus Depot Jogeshwari - (East) Mumbai -400060
The Board had at its meeting held on 29th April 2021 amended the Whistle BlowerPolicy for setting up a governance committee and inclusion of additional mechanisms forraising complaints by all stakeholders (Employees Directors vendors customers etc.)viz. a secured third-party online portal and a 24x7 toll-free hotline number. The amendedWhistle Blower Policy of the Company is available on the website of the
Company and can be accessed at the web link: https://mahindraloaistics.com/disclosures/
An update on whistle blower complaints is provided to the Audit Committee of theCompany on a quarterly basis. During the financial year under review no personnel wasdenied access to the Chairperson of Audit Committee of the Board.
Prevention of Sexual Harassment at Workplace
The Company has zero tolerance towards sexual harassment at its workplace and hasadopted a Policy for Prevention of Sexual Harassment in line with the requirements of theSexual Harassment of Women at Workplace (Prevention Prohibition & Redressal) Act2013 ("POSH Act") to provide a safe secure and enabling environment free fromsexual harassment. The Policy is gender neutral. Internal Complaints Committee has beenset across regions to redress complaints received regarding sexual harassment. During thefinancial year under review the Company has complied with the provisions relating to theconstitution of Internal Complaints Committee ("ICC") under the POSH Act.
All employees are briefed on the POSH Policy during induction. The Company alsoactively conducts various trainings and sensitisation programs across all its locationsand verticals on a periodical basis through its SPEAK UP THEN and THERE programme toincrease awareness about the Policy and the provisions of the POSH Act amongst employees.During the year mandatory trainings on the POSH were conducted online with an improvedand interactive approach.
During the financial year 2021-22 the Company received four complaints in this regardwhere appropriate action was taken by the ICC and three complaints were resolved as on31st March 2022. One complaint pending as 31st March 2022 was resolved before the dateof this report and as on the date of this report there are no complaints pending under thePOSH Act.
The Company has a well-defined risk management framework in place which inter-aliaincludes identification of elements of risk if any which in the opinion of theManagement and the Board may impact the performance outcome of the Company.
The Company has developed and implemented a Risk Management Policy which is approved bythe Board. The Risk Management Policy inter-alia includes well defined risk managementroles within the Company risk appetite and risk tolerance capacity of the Companyidentification and assessment of the likelihood and impact of risk risk handling andresponse strategy and reporting of existing and new risks associated with the Company'sactivities in a structured manner. This facilitates timely and effective management ofrisks and opportunities and achievement of the Company's objectives. The Board onrecommendation of Risk Management Committee amended the Risk Management policy in linewith the SEBI Listing Regulations.
The CFO provides oversight and reports to the Board the Audit Committee and the RiskManagement Committee who have the responsibility for overseeing all risks. The RiskManagement Committee is inter-alia authorised to monitor and review the risk assessmentmitigation and risk management plans for the Company from time to time and report theexistence adequacy and effectiveness of the above process to the Board on a periodicbasis.
The details of composition of the Risk Management Committee their terms of referencemeetings held and attendance of the Committee Members thereat during the financial year2021-22 are provided in the section titled Report on Corporate Governance which formspart of this Integrated Annual Report.
R. CORPORATE SOCIAL RESPONSIBILITY AND RELATED MATTERS
Corporate Social Responsibility ("CSR")
As part of the Mahindra Group social responsibility is in our DNA. All our communityinterventions are based on our belief that positive change is best achieved through socialand economic empowerment. Our CSR programmes are therefore structured in a way thatpromotes educational and other opportunities so that communities become self-sufficient inthe long run.
The Company's CSR efforts continued to be directed towards Building Communities SkillDevelopment Sustainability Disaster Relief and other initiatives in line with theCompany's CSR Policy positively impacting over 190000 beneficiaries across all CSRinitiatives of the Company during the financial year under review. Programs such as Oxygenon Wheels and other COVID-19 relief support activities continued during the pandemic tounderline our commitment to communities.
The CSR Committee of the Board is constituted in compliance with the provisions of theAct read with the applicable rules made thereunder.
The CSR Committee of the Company comprised of four Directors as on 31st March 2022 asdetailed hereunder:
1. Mr. Ranu Vohra Independent Director - Chairman
2. Mr. Rampraveen Swaminathan Managing Director and CEO - Member
3. Mr. Naveen Raju Non-Executive Director - Member
4. Ms. Malvika Sinha Independent Director - Member
The Company Secretary of the Company acts as the secretary to the CSR Committee.
Changes in composition of the CSR Committee
During the financial year 2021-22 following changes were made in the composition ofthe CSR Committee:
Mr. Parag Shah Non-Executive Director ceased to be the member with effect from29th April 2021;
Ms. Malvika Sinha Independent Director was inducted as Member with effect from29th April 2021;
Mr. S. Durgashankar Non-Executive Director ceased to be the member with effectfrom 27th July 2021;
The composition of the CSR Committee is uploaded on the website of the Company and canbe accessed through the weblink: https://mahindralogistics.com/board-of-directors/#committee.
The Board has adopted a CSR Policy formulated and recommended by the CSR Committee.The CSR Policy including a brief overview of the projects or programs approved by theBoard with implementation schedule thereof is uploaded on the Company's website and can beaccessed through the weblink : https:// mahindralogistics.com/disclosures/
During the financial year under review the Company has spent Rs.1.77 crores towardsCSR activities as stipulated under Schedule VII of the Act. The Company has spent Rs.0.07crores in excess of statutory limit of 2% prescribed under the Act. There is no unspentCSR expenditure as on 31st March 2022.
Impact Assessment of CSR Projects
The Company's average CSR obligation in the three immediately preceding financial yearsdoes not exceed Rs.10 crores. Hence the Company is not required to undertake impactassessment through an independent agency in terms of Rule 8(3)(a) of the Companies(Corporate Social Responsibility) Rules 2014.
However in line with the CSR Policy the Company voluntarily conducted impactassessment of its CSR programmes viz. Village Adoption Program in Tembha VillageMaharashtra and Drivers Welfare's Program. Further the Company also conducts internalassessments situational analysis need assessment surveys project visits or socialaudits etc. to monitor and evaluate the CSR projects of the Company.
Annual Report on CSR
Annual Report on CSR for the financial year 2021-22 is annexed as Annexure VI ofthis report and forms part of this Integrated Annual Report.
The Company's sustainability vision is to be a logistics sector leader in adoptingsustainable business practices which helps maximize benefits to the environment andcommunity. The Materiality and Stakeholder engagement study helps as a compass toimplement sustainability programs with relevance to the issues of high importance to thestakeholders as well as the Company's growth. The Company integrates economic progresssocial responsibility and environment consciousness into the strategic business decisions.
The Company has adopted a Sustainability Policy and continued with its focus on theEnvironmental Social and Governance ("ESG") parameters by implementing theSustainability Framework developed for ensuring a common language and a uniformunderstanding of the aspects of sustainability across the organisation. As a responsiblebusiness the Company recognizes the real time climate change dynamics and the impactcreated by logistics and transportation sector.
The Company is focused for attaining carbon neutrality by 2040. To reach the targetthe Company is expanding the share of energy-efficient technologies across its assetsdeploying clean transportation solutions implementing energy efficiency initiatives andtechnologies thereby making our operations and warehousing infrastructure moresustainable. To further improve the focus in the area of Green House Gas ("GHG")reduction the Company has made a commitment to Science Based Targets Initiative (SBTi) toreduce scope 1 and 2 GHG emissions by 88% per employee and scope 3 GHG emissions by 69%per million kilometer by the year 2033 from a 2018 base year. The Company has prepared itsfirst Integrated report in alignment with the International Integrated Reporting (IIRC)framework and Global Reporting Initiative (GRI) Standards.
Specific initiatives taken in this regard are detailed in Annexure VII of thisreport. These efforts have resulted in reduction in energy and costs improved processefficiencies and increased customer satisfaction.
Business Responsibility Report
As stipulated in Regulation 34(2)(f) of the SEBI Listing Regulations the BusinessResponsibility Report of the Company highlighting the initiatives taken by the Company inthe areas of social environment governance and economic responsibilities of business forthe financial year 2021-22 in the prescribed format is available as a separate sectionand forms part of this Integrated Annual Report.
T. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
The particulars relating to the conservation of energy technology absorption andforeign exchange earnings and outgo as required under Section 134(3)(m) of the Act readwith Rule 8(3) of the Companies (Accounts) Rules 2014 is provided in Annexure VII andforms part of this report.
The details of the Key Policies adopted by the Company are mentioned at AnnexureVIII and forms part of this report.
Authorised Share Capital
The authorised share capital of the Company as on 31st March 2022 was '1050000000/-divided into 105000000 equity shares of the face value of Rs.10/- each.
Changes in issued subscribed and paid-up share capital
During the financial year under review the Company allotted 201278 equity shares offace value of Rs.10/- each to the eligible employees/ex-employees of the Company towardsexercise of RSUs and stock options under the RSU Plan 2018 and KESOS Scheme 2012respectively. The equity shares issued and allotted during the financial year under reviewrank pari-passu with the existing equity shares of the Company in all respects.
The movement in the paid-up share capital during the financial year under review is asunder:
|Date ||Particulars ||No. of equity shares allotted ||Cumulative Equity Shares (in nos.) ||Cumulative Share Capital (in Rs.) |
|1st April 2021 ||Opening issued subscribed and paid-up share capital ||- ||71670340 ||716703400 |
|12th April 2021 ||Allotment of equity shares to employees pursuant to exercise of RSUs granted under the RSU Plan 2018 ||41663 ||71712003 ||717120030 |
|12th July 2021 ||Allotment of equity shares to employees pursuant to exercise of RSUs granted under the RSU Plan 2018 ||25661 || || |
| ||Allotment of equity shares to employees pursuant to exercise of KESOS granted under the KESOS Scheme 2012 ||39444 ||71777108 ||717771080 |
|9th October 2021 ||Allotment of equity shares to employees pursuant to exercise of RSUs granted under the RSU Plan 2018 ||86428 ||71863536 ||718635360 |
|10th January 2022 ||Allotment of equity shares to employees pursuant to exercise of RSUs granted under the RSU Plan 2018 ||8082 ||71871618 ||718716180 |
|31st March 2022 ||Closing issued subscribed and paid-up share capital ||- ||71871618 ||718716180 |
Changes in the equity share capital from 1st April 2022 to date of this report
On 11th April 2022 the Company has allotted 64085 equity shares to eligible RSUHolders on exercise of RSUs granted under the RSU Plan 2018. Consequently the issuedsubscribed and paid-up share capital of the Company as on the date of this report isRs.719357030/- (divided into 71935703 equity shares of Rs.10/- each fully paid-up).
The Annual Return of the Company for the financial year ended 31st March 2022 preparedin compliance with Section 92(3) of the Act and Rules framed thereunder in prescribed FormNo. MGT-7 is placed on the website of the Company and can be accessed at the weblink:https://mahindralogistics.com/financial-information/.
Compliance with Secretarial Standards
The Directors have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards viz. the Secretarial Standard-1 on Meetings of theBoard of Directors ("SS-1") and the Secretarial Standard-2 on General Meetings("SS- 2") issued by The Institute of Company Secretaries of India and approvedby the Central Government and such systems are adequate and operating effectively. Duringthe financial year under review the Company was in compliance with the SecretarialStandards-SS-1 and SS-2.
The Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions/events related to these items during thefinancial year under review:
Issue of equity shares with differential rights as to dividend voting orotherwise;
Issue of sweat equity shares to employees of the Company under any scheme;
Significant or material orders passed by the Regulators or Courts or Tribunalswhich impact the going concern status and the Company's operations in future;
Raising of funds through Preferential Allotment Rights Issue or QualifiedInstitutional Placement;
Voting rights which are not directly exercised by the employees in respect ofequity shares for the subscription/purchase of which loan was given by the Company (asthere is no scheme pursuant to which such persons can beneficially hold shares asenvisaged under Section 67(3)(c) of the Act);
Suspension of trading of equity shares of the Company;
There was no revision made in Financial Statements or the Board's Report of theCompany;
There was no one-time settlement done by the Company and hence the provision ofdetails of difference in valuation arising between such one-time settlement and the loantaken from the Banks does not arise;
No application for Bankruptcy under the Insolvency & Bankruptcy Code 2016was made against the Company during the financial year under review nor are there anypending proceedings for the same.
The financial year 2021-22 saw waves of COVID-19 as we return to an adapted form ofnormalcy.
We thank our customers vendors business associates investors shareholders andbankers for their continued support. We also would like to place on record our deepappreciation to all the employees for their hardwork and contribution which was thefulcrum of our performance.
| ||For and on behalf of the Board of Directors |
| ||Dr. Anish Shah |
|Place: Mumbai ||Chairman |
|Date: 26th April 2022 ||DIN: 02719429 |