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MA
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D A LT
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AN
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UAL
A REP
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01
15
5
RESILIENCE THROUGH
CUSTOMER CENTRICITY
RESILIENCE THROUGH
PORTFOLIO DIVERSIFICATION
RESILIENCE THROUGH
STRONG FINANCIALS
R e silie nce
RESILIENCE IN
VALUE CREATION
Mahindra pioneers
technologically superior
farming solutions with
the Arjun Novo
Technologically advanced and stylishly designed, the
Arjun Novo has created new benchmarks in
performance, technology and ergonomics and is one of
the most comfortable tractors in its category.
D r i v i n g P o s itiv e Change
Corporate Social Responsibility or CSR is an integral part of the Mahindra Group with Education, Public Health and the
Environment forming the key focus areas of our programme.
From providing academic, material and social support to underprivileged girls across India through Project Nanhi Kali to
supporting Impact Indias Lifeline Express, the worlds rst hospital on wheels, the Mahindra Group seeks to drive
positive change and help make the world a better place. The Mahindra Group has pledged to support the Prime
Ministers CLEAN INDIA campaign through the Swachh Bharat Swachh Vidhyalaya program, by committing to build
1,000 toilets blocks (preferably for girls) in government schools across 13 states of India.
Employees across the Group also devote their personal time and energy to help the disadvantaged through ESOPs or
the Employee Social Options Programme. From blood donation drives and sapling plantation to visits to old age homes,
our Esops volunteers are making a difference to the lives of many.
We present a few glimpses of Mahindras CSR activities through the year.
A blood donation drive in progress
Seated: Anish Shah, Group President (Strategy), V S Parthasarathy, Group CFO, Group CIO & President (Group Finance and M&A),
Anand Mahindra, Chairman & Managing Director, Mahindra & Mahindra Ltd., Rajan Wadhera, President & Chief Executive (Truck &
Power Train), Head - Mahindra Research Valley (MRV), Ashok Sharma, President & Chief Executive (Agri and Africa & South Asia
Operations), Anita Arjundas, Managing Director & CEO (Mahindra Lifespace Developers Ltd.) & President (Real Estate Sector),
Pawan Goenka, Executive Director - Mahindra & Mahindra Ltd. & Group President (Auto and Farm Sector), S. P. Shukla, Group
President and CEO (Aerospace & Defence Sector), S. Durgashankar, President (Group M&A, Corporate Accounts & Group
Secretarial)
CHAIRMAN EMERITUS
BANKERS
Audit Committee
Mr. Deepak S. Parekh - Chairman
Mr. Nadir B. Godrej
Mr. M. M. Murugappan
Mr. R. K. Kulkarni
Mr. Bharat Doshi
BOARD OF DIRECTORS
Mr. Anand G. Mahindra
Chairman & Managing Director
Dr. Pawan Goenka
Executive Director
Mr. Bharat Doshi
Mr. Deepak S. Parekh
Mr. Nadir B. Godrej
Mr. M. M. Murugappan
Mr. R. K. Kulkarni
Mr. Anupam Puri
Dr. Vishakha N. Desai
Mr. S. B. Mainak
Nominee of Life Insurance Corporation
of India
AUDITORS
Deloitte Haskins & Sells
Tower 3, 27th 32nd Floor,
Indiabulls Finance Centre,
Elphinstone Mill Compound,
Senapati Bapat Marg,
Elphinstone (W), Mumbai 400 013
ADVOCATES
Khaitan & Co.,
One Indiabulls Centre,
13th Floor, 841, Senapati Bapat Marg,
Elphinstone Road, Mumbai 400 013
REGISTERED OFFICE
Gateway Building, Apollo Bunder,
Mumbai 400 001
CONTENTS
Directors Report .......................................................................................................9
Management Discussion and Analysis ...................................................................71
Corporate Governance ............................................................................................93
Business Responsibility Report ............................................................................. 113
Accounts .................................................................................................................129
Consolidated Accounts ..........................................................................................183
Directors Report
Dear Shareholders
Your Directors present their Report together with the audited
nancial statements of your Company for the year ended
31st March, 2015.
(Rs. in crores)
2015
2014
41,982
43,838
2,188
2,612
39,794
41,226
5,022
975
5,439
863
4,047
214
4,576
259
3,833
336
4,169
4,317
52
4,369
743
350
105
3,321
12,325
261
3,758
9,952
17
15,629
17
13,693
745
102
400
862
104
35
14,750
2
*
12,325
11
Performance Review
Automotive Division:
Your Companys Automotive Division recorded total sales of
3,96,534 vehicles and 59,404 three-wheelers as compared to
4,34,505 vehicles and 64,510 three-wheelers in the previous
year registering a decline of 8.7% in vehicle sales and a decline
of 7.9% in three-wheeler sales.
On the domestic sales front, your Company sold 2,23,968
Passenger Vehicles [including 2,06,837 Utility Vehicles (UVs),
13,947 Multi Purpose Vehicles (MPVs) and 3,184 Cars] which
is a decline of 11.9% over the previous years volumes of
2,54,344 Passenger Vehicles [including 2,19,421 UVs, 25,189
MPVs and 9,734 Cars]. In the commercial vehicle segment, your
Company sold 1,45,010 vehicles [including 15,255 vehicles < 2T
GVW and 1,29,755 vehicles between 2-3.5T GVW] registering
a decline of 4.8% over the previous years volume of 1,52,398
commercial vehicles, [including 29,223 vehicles < 2T GVW and
1,23,175 vehicles between 2-3.5T GVW]. In the three-wheeler
segment, your Company sold 56,764 three-wheelers registering
a decline of 9.3% over the previous years volume of 62,614
three-wheelers.
For the year under review, the Passenger Vehicle (PV) industry
has shown signs of revival, but this has been patchy. The
Car industry growth is largely driven by new launches. Your
Companys volume decline in the UV segment is a reection
of the UV market shift towards compact UVs attracting lower
excise rates. The < 2T Light Commercial Vehicle (LCV) industry
continues to shrink and the 2 to 3.5T LCV industry (PikUps) suffered due to slowdown in Agri incomes and nance
availability.
Your Companys UV sales volume declined by 5.7%, but your
Company continued to maintain its leadership position in
the domestic UV market by posting a market share of 37.4%.
During this year, Bolero sales once again crossed the milestone
of 1 lakh sales in a year. This is the fourth consecutive year that
Bolero has achieved this milestone. Also, Bolero retained the
title of Indias largest selling Sports Utility Vehicle (SUV) for the
9th consecutive year. It is also the 5th highest selling passenger
12
Finance
The Financial Year 2014-15 witnessed divergent economic
performance and monetary policies around the world. The
United States economy saw continued improvement with
job creation, the US Fed ended its quantitative easing (QE)
program in October, 2014 and is the only economy among
G-20 countries expected to go into an interest rate hike cycle.
On the other hand, stagnant economic activity and falling
commodity prices (especially crude) prompted central banks
in Europe and Japan to embark on QE programs. Emerging
markets witnessed a fall in growth rates, led by a slowdown in
China, a steep contraction in Russia and a recession in Brazil.
A large number of central banks have cut rates in the fourth
quarter of the Financial Year 2014-15 as they ght the threat
of deation with the collapse in crude and other commodity
prices. The latest World Economic Outlook by IMF projects the
global growth to remain moderate in 2015. The outlook for
advanced economies is improving, while growth in emerging
markets and developing economies is projected to be lower,
primarily reecting weaker prospects for some large emerging
market economies and oil-exporting countries. Financial Year
2014-15 witnessed unprecedented strength in the US Dollar
against most currencies. Countries over-reliant on commodity
exports saw their currencies coming under pressure. Indian
Rupee remained in a relatively narrow band as the new
Governments commitment towards scal prudence and
progressive economic policies, led to surge of foreign ows
into the country (both FDI and FII). The Reserve Bank of India
(RBI) steadily intervened in the forex market to augment its
forex reserves.
On the interest rate front, RBI, stayed on its path of ination
targeting. With the CPI ination target of 8% by March,
2015 comfortably achieved (Ination for March, 2015 at
5.25%) and the future outlook for coming quarters being
benign, RBI reduced repo rate by cumulative of 50 bps in the
last quarter of the Financial Year 2014-15. RBI, in addition,
effectively managed the systemic liquidity conditions by way
of its liquidity management framework comprising xed and
variable rate repo and reverse repo, term repo and marginal
13
Dividend
Your Directors are pleased to recommend a dividend of Rs. 12
per Ordinary (Equity) Share of the face value of Rs. 5 each,
payable to those Shareholders whose names appear in the
Register of Members as on the Book Closure Date. The equity
dividend outgo for the Financial Year 2014-15, inclusive of tax
on distributed prots (after reducing the tax on distributed
prots of Rs. 50.15 crores on the dividends receivable from
the subsidiaries during the current Financial Year) would
absorb a sum of Rs. 846.89 crores [as against Rs. 963.01 crores
comprising the dividend of Rs. 13.50 per Ordinary (Equity)
Share and also a Special Dividend of Re. 0.50 per Ordinary
(Equity) Share aggregating Rs. 14 per Ordinary (Equity) Share
of the face value of Rs. 5 each and tax thereon paid for the
previous year].
14
15
16
G. AUDITORS
Statutory Auditors and Auditors Report
Messrs. Deloitte Haskins & Sells, Chartered Accountants (ICAI
Registration No. 117364W) were re-appointed as the Statutory
Auditors of the Company to hold ofce from the conclusion of
the 68th Annual General Meeting (AGM) held on 8th August,
2014 until the conclusion of the third consecutive AGM of the
Company to be held in the year 2017 (subject to ratication of
their appointment by the Members at every AGM held after
the AGM held on 8th August, 2014).
As required under the provisions of section 139(1) of the
Companies Act, 2013, the Company has received a written
consent from Messrs. Deloitte Haskins & Sells, Chartered
Accountants to their appointment and a Certicate, to the
effect that their appointment, if made, would be in accordance
with the Companies Act, 2013 and the Rules framed thereunder
and that they satisfy the criteria provided in section 141 of the
Companies Act, 2013.
The Members are requested to ratify the appointment of the
Statutory Auditors as aforesaid and x their remuneration.
The Auditors Report does not contain any qualication,
reservation or adverse remark.
Secretarial Auditor
Pursuant to the provisions of section 204 of the Companies Act,
2013 and the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, the Company has appointed
Mr. Sachin Bhagwat, Practicing Company Secretary (Certicate
of Practice Number: 6029) to undertake the Secretarial Audit
of the Company.
In terms of provisions of sub-section 1 of section 204 of the
Companies Act, 2013, the Company has annexed to this Board
Report as Annexure I, a Secretarial Audit Report given by the
Secretarial Auditor.
The Secretarial Audit Report does not contain any qualication,
reservation or adverse remark.
17
Cost Auditors
18
J. EMPLOYEES
Key Managerial Personnel (KMP)
The following have been designated as the Key Managerial
Personnel of the Company pursuant to sections 2(51) and
203 of the Companies Act, 2013 read with the Companies
(Appointment and Remuneration of Managerial Personnel)
Rules, 2014:
a)
b)
c)
d)
None of the KMP has resigned during the year under review.
Industrial Relations
The year under review has witnessed positive vibes in Industrial
Relations Scenario across all manufacturing locations for the
Automotive and Farm Equipment Sectors.
Employees have always been valuable assets of the Company and
focus was laid in propagating proactive and employee centric
practices at the shop oor. The Companys endeavour has been
to ensure transparent communication of overall business goals
and implement an efcient concern resolution mechanism.
Your Company has adopted a more holistic approach to
enhance skill and capabilities of employees at the shop oor
through Mahindra Skill Excellence Initiative. For the year
under review, there was participation of over 1,800 employees
across all manufacturing facilities. Your Company had one
highly skilled associate, representing India at the World Skill
Competition 2014, held at Leipzig Germany.
19
20
b)
21
Audit Committee
This Committee comprises of the following Directors viz.
Mr. Deepak S. Parekh (Chairman of the Committee), Mr. Nadir
B. Godrej, Mr. M. M. Murugappan, Mr. R. K. Kulkarni and
Mr. Bharat Doshi. Except for Mr. Bharat Doshi, all the Members
are Independent Directors. All the Members of the Committee
possess strong accounting and nancial management
knowledge. The Company Secretary of the Company is the
Secretary of the Committee.
All the recommendations of the Audit Committee were
accepted by the Board.
22
L. GOVERNANCE
Corporate Governance
Your Company has a rich legacy of ethical governance practices
many of which were implemented by the Company, even before
they were mandated by law. Your Company is committed to
transparency in all its dealings and places high emphasis on
business ethics. A Report on Corporate Governance along
with a Certicate from the Statutory Auditors of the Company
regarding compliance with the conditions of Corporate
Governance as stipulated under Clause 49 of the Listing
Agreement form part of this Annual Report.
Vigil Mechanism
The Vigil Mechanism as envisaged in the Companies Act, 2013,
the Rules prescribed thereunder and the Listing Agreement is
implemented through the Companys Whistle Blower Policy
to enable the Directors and employees of the Company to
report genuine concerns, to provide for adequate safeguards
against victimisation of persons who use such mechanism and
make provision for direct access to the Chairman of the Audit
Committee.
Whistle Blower Policy of the Company is available on the
Companys website at the web-link: http://www.mahindra.
com/Investors/Mahindra-and-Mahindra/Governance
Further details are available in the Report on Corporate
Governance that forms part of this Annual Report.
Risk Management
Your Company has a well-dened risk management framework
in place. The risk management framework works at various
levels across the enterprise. These levels form the strategic
defence cover of the Companys risk management. The
Company has a robust Organisational structure for managing
and reporting on risks.
Your Company has constituted a Risk Management Committee
of the Board which is authorised to monitor and review risk
management plan and risk certicate. The Committee is also
empowered, inter alia, to review and recommend to the Board
the modications to the Risk Management Policy. Further, the
Board has constituted a Corporate Risk Council comprising the
Senior Executives of the Company. The terms of reference of
the Council comprises review of risks and Risk Management
Policy on periodic intervals.
The Board has approved the modications to the Risk
Management Policy which are made with the intention of
increasing the spectrum and reach of the risk management
processes across the Company. The Risk Management Policy,
inter alia, includes identication therein of elements of
risk, including those that may threaten the existence of the
Company. Risk management process has been established
across the organisation and is designed to identify, assess
and frame a response to threats that affect the achievement
of its objectives. Further, it is embedded across all the major
CSR Policy
The Corporate Social Responsibility Committee had formulated
and recommended a Corporate Social Responsibility Policy
to the Board of the Company which was subsequently
adopted by it and is being implemented by the Company. The
web-link to the CSR Policy is http://www.mahindra.com/
resources /RHS-Elements /5.0-How-we-help /Mahindra-CSRPolicy.pdf
A brief overview of projects or programs proposed to be
undertaken is available at the web-link http://www.mahindra.
com/How-We-Help
CSR Committee
Your Company has constituted a CSR Committee comprising of
Dr. Vishakha N. Desai (Chairperson), Mr. Anand G. Mahindra,
Mr. Bharat Doshi, Mr. R. K. Kulkarni, Dr. Pawan Goenka and
Mr. Vikram Singh Mehta to monitor the CSR activities.
CSR Initiatives
Major CSR initiatives undertaken by the Company during the
Financial Year 2014-15 were as follows:
a.
23
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
During the year under review, your Company spent Rs. 83.24
crores on CSR activities. The amount equal to 2% of the
average net prot for the past three Financial Years is Rs. 83.03
crores. The detailed Annual Report on CSR activities is annexed
herewith and marked as Annexure V.