Observations:

1. The shareholder's fund of the company was at peak in the financial year 2016-17 with the percentage of Balance sheet total 67.02% because the reserves and surplus has significantly increased and lowest in the financial year 2014-15 with the Balance sheet total 58.45% and was in the range of 63%-65% in the financial years 2015-16, 2017-18 and 2018-19.

2. The Non current liabilities of the company was highest in the financial year 2014-15 with the percentage of Balance sheet Total 14.31% because of the hike in the long term borrowings. In the financial years 2015-16 to 2018-19 it was stable in the range of 7% -9% because of the decline in the long term borrowing as compared to the preceding years.

3. The total current liabilities of the company varies in the range of 24%-19% of the Balance sheet total, highest in the financial year 2017-18 with 28.10% of the balance sheet total and the lowest in the financial year 2016-17 with 24.10% of the balance sheet total because the advance received from customers and others declined significantly as compared to the preceding and succeeding financial years.

4. The non current assets of the company lies in the range of 65%-70% of the Balance sheet total in the financial years 2014-15 to 2018-19. It was at highest in the financial year 2014-15 with 69.26% of the balance sheet total and lowest in the financial year 2017-18 with 65.10% of the balance sheet total.

5. The current assets of the company lies in the range of 30%-35% of the Balance Sheet total in the financial year 2014-15 to 2018-19. It was highest in the financial year 2017-18 with 34.74% of the balance sheet total because the current investments has increased in the subsequent years and lowest in the financial year 2014-15 with 30.74% of the balance sheet total.

Observations:

1. The total revenue of the company lie between 103% to 105% of the Revenue from operations for the financial years 2014-15 to 2018-19. The revenue is highest in the financial year 2016-17 with 104.66% of the revenue from operations and lowest in the financial year 2015-16 with 103.31% of the revenue from operations.

2. The total expenses of the company lies between the range 91% to 96% of revenue from operations for the financial years 2014-15 to 2018-19. The total expenses were highest in the financial years 2016-17 with 95.03% of the revenue from operations and lowest in the financial year 2017-18 with 91.56% of the revenue from operations.

3. The Profit for the period lies between the range of 7% to 9% of the revenue from operations for the financial years 2014-15 to 2018-19. The company yield the highest profit in the financial year 2018-19 with 9.06% of the revenue from operations and lowest in the financial year 2015-16 with 7.93% of the revenue from operations.

Significant Observations:

1. As shown in the graph the Total current liabilities has increased 38.29% in the financial year 2017-18 as compared to the financial year 2016-17 because the other current liabilities has increased significantly in the year 2017-18 and it has increased by 7.59% in the financial year 2018-19 as compared to the financial year 2017-18 it has increased proportionately less because the short term provisions has declined in the year.

2. The Total current assets of the company has significantly increased 30.67% in the financial year 2017-18 as compared to the financial year 2016-17 because the other current assets and the short term loans and advances has increased in the year and it has increased by 9.69% in the financial year 2018-19 from 2017-18 proportionately as the current investments and short term loans and advancements has declined in the year 2018-19.

Significant Observations:

1. The Total revenue in the financial year 2017-18 has increased by 9.26% as compared to the financial year 2016-17 and has increased by 11.42 % in the financial year 2018-19 as compared to the financial year 2017-18.

2. The total expenses has increased by 6.06% in the financial year 2017-18 as compared to the financial year

2016-17 and increased by 11.42% in the financial year 2018-19 as compared to the year 2017-18.

3. The profit of the year for the financial year has increased in the financial year 2017-18 by 1.53% as compared to the previous year. And has further increased with less proportion of 0.90% in the financial year 2018-19 as compared to the financial year 2017-18

CASH FLOW STATEMENT ANALYSIS

Significant Observations:

1. The cash flow from operating activity has been fluctuated massively in the 5 financial year 2014-15 to 2018-19. The cash generated from the operating activity in the financial year 2014-15 is Rs 3219.49 L , in the next financial year 2015-16 it has significantly increased to Rs 5470.5 L . In the financial year 2016-17 it again declined to Rs 3710 L increased to Rs 7027.08 L in the financial year 2017-18 which is the highest growth in the 5 financial years. In the financial year 2018-19 it it has been decreased to Rs. 4923.87 L.

2. As shown in the above graph in the financial year 2017-18 the company has invested highest in the fixed assets,i.e. Rs 5110.42 L as compared to preceding and succeeding financial years. In the financial years 2014-15, 2015-16, 2016-17 and 2018-19 the company used cash for investing activity lies between the range 2400 L to 3500 L.

3. The financing activity has shown the negative cash flow which is because the company paid the dividend majorly to the shareholders of the company. In the financial year 2015-16 there was a growth in paid dividends that means the company paid higher dividends in the financial year 2015-16, in the succeeding financial years it has again declined which means that the company paid lesser dividends.

4. As noticed, the cash flow from the activities are negative the net cash has decreased in the consecutive financial years 2014-15 to 2016-17. In the financial years 2017-18 and 2018-19 the cash flow of the company has increased cash as the operating activity created enough cash to cover the investing and financing activities of the company.

STATEMENT OF CHANGES IN EQUITY ANALYSIS

Observations:

1. In the financial year 2016-17 new shares of Rs 0.62 crores has been issued. ESOP worth Rs 0.49 Cr. issued to the employees of the company. In the financial year 2017-18 Rs 0.49 Crores new shares has been issued. ESOP worth 0.55 has been issued to the employees. In the financial year 2018-19 the new shares issued has massively increased worth Rs. 298.16 crores and worth 0.83 crores ESOP has been issued to the Employees of the company.

RATIO ANALYSIS

Significant Analysis:

As shown in the above graph the financial charges coverage ratio has a subsequently increased in the 5 financial years 2014-15 to 2018-19. The financial charges coverage ratio has been increased to 23.44 in 2014-15, 29.4 in 2015-16, 36.72 in 2016-17, 64.71 in 2017-18 which is significantly higher than the increase in the previous years, and at its peak 73.45 in 2018-19. The company's ability to meet it's fixed charge obligations has increased subsequently.

Significant Observation:

• The inventory turnover ratio of the company has been fluctuating moderately low in the financial years 2014-15 to 2018-19. The ratio was 16.87 in 2014-15, decreased in 2015-16 to 16.24, increased to 17.18 in 2017-18, highest in the year 2017-18 at 18.3 and then further declined to 13.96 in 2018-19.

• It shows that the liquidity of inventory has been changing moderately that means inventory generated cash that was stable.

Significant Observation:

The interest coverage ratio of the company has been increasing subsequently in the financial years 2014-15 to 2018-19. It was 18.89 in the financial year 2014-15, 23.66 in the financial year 2015-16, 27.16 in the financial year 2016-17, increased significantly to 51.52 in the financial year 2017-18, 57.04 in the financial year 2018-19.

This shows that the company's ability to meet the interest charges of the debt taken with earning before interest and taxes has been increasing subsequently.

ACCOUNTING STANDARDS FOLLOWED BY THE COMPANY

In the financial year 2014-15 and 2015-16 the financial statements have been prepared in accordance with the Generally Accepted Accounting Principles (IGAAP) under the historical cost convention as a going concern and on accrual basis and in accordance with the provisions of the Companies Act, 2013 and the Accounting Standards specified under section 133 of the Companies Act, 2013 (“the Act”) read with rule 7 of the Companies (Accounts) Rules 2014 (as amended).

In the financial year 2016-17 the financial statements prepared were the first financial statements prepared in accordance with Indian Accounting Standards (Ind AS). The company applied Ind AS 101, First time adoption of Indian Accounting Standards in transition from IGAAP to Ind AS. and followed the same for the subsequent financial years.

BOARD'S REPORT ANALYSIS

A. Financial and operational highlights:

In the financial year 2018-19 the company yield the profit of Rs 4796 crores. The automotive sector has recorded significant growth of 9.4% in the domestic market, 2.2% in the Passenger Vehicle, 14.7% in the commercial vehicle. The farm equipment sector has recorded the growth of 3.4%. The tractor industry in India has recorded the growth of 8%. In the domestic market the recorded the growth of 4.2%. In a very competitive industry, the Company continued its market leadership for the 36th consecutive year, with a market share at 40.2%.The Company has distributed profits of Rs 86.58 crores on the dividend declared by the subsidiaries.

B. Consolidated Financial Statements:

Tech Mahindra Limited, Flagship Company in the IT Sector, has reported a consolidated operating revenue of Rs. 34,742 crores in the current year. The Group’s finance company, Mahindra & Mahindra Financial Services Limited (Mahindra Finance), reported a consolidated operating income of Rs. 10,372 crores during the current year. Mahindra Lifespace Developers Limited, the subsidiary in the business of real estate and infrastructure registered a consolidated operating income of Rs. 593 crores. Mahindra Holidays & Resorts India Limited, the subsidiary in the business of timeshare registered a consolidated operating income of Rs. 2,239 crores. Ssyangyong Motor Company, the Korean subsidiary of the Company has reported revenues of Rs. 24,184 crores in the current fiscal year

C. Internal Financial Controls:

The Corporate Governance Policies guide the conduct of affairs of the Company and clearly delineates the roles, responsibilities and authorities at each level of its governance structure and key functionaries involved in governance. The Code of Conduct for Senior Management and Employees of your Company (the Code of Conduct) commits Management to financial and accounting policies, systems and processes. The Corporate Governance Policies and the Code of Conduct stand widely communicated across your Company at all times.

D. Auditors :

Messrs B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration Number 101248W/W-100022) were appointed as the Statutory Auditors of the Company to hold office for a term of 5 years from the conclusion of the 71st Annual General Meeting (AGM) held on 4th August, 2017 until the conclusion of the 76th AGM of the Company to be held in the year 2022. The Board had appointed Messrs D. C. Dave & Co., Cost Accountants (Firm Registration Number 000611), as Cost Auditor for conducting the audit of cost records of the Company for the Financial Year 2018-19. During the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in this Report.

E. Public Deposits and Loans/Advances :

The Company had discontinued its Fixed Deposit Scheme for 36 months with effect from the close of office hours on 31st January, 2014 and has also discontinued acceptance of Fixed Deposits with effect from 1st April, 2014. All the deposits from public and Shareholders had already matured as at 31st March, 2017. Out of the total outstanding of 41 deposits of Rs. 17.24 lakhs from the public and shareholders as at 31st March, 2019, all deposits amounting to Rs. 17.24 lakhs, had matured and had not been claimed as at the end of the Financial Year. Since then 1 of these deposits of the value of Rs. 0.45 lakhs have been claimed. There was no default in repayment of deposits or payment of interest thereon during the year under review. There are no deposits which are not in compliance with the requirements of Chapter V of the Companies Act, 2013.

F. Employees :

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

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

(b) Dr. Pawan Goenka – Managing Director

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

(d) Mr. Narayan Shankar – Company Secretary

The Company had 258 employees who were in receipt of remuneration of not less than Rs. 1,02,00,000 during the year ended 31st March, 2019 or not less than Rs. 8,50,000 per month during any part of the year.

G. Board & committees

Pursuant to the recommendation of the Governance, Nomination and Remuneration Committee, the Board at its Meeting held on 14th November, 2018, appointed Mr. Vijay Kumar Sharma as an Additional Non-Executive Non-Independent Director of the Company representing Life Insurance Corporation of India.

Dr. Pawan Goenka retires by rotation and, being eligible, offers himself for re-appointment at the 73rd Annual General Meeting (AGM) of the Company scheduled to be held on 7th August, 2019 .

Mr. R. K. Kulkarni has been on the Board of the Company for around 22 years. He has been the Chairman of the Stakeholders Relationship Committee, Member of Audit Committee, Governance, Nomination and Remuneration Committee and other committees of the Board.

Mr. Anupam Puri has been on the Board of the Company for around 18 years. . He has been a Member of the Strategic Investment Committee and has contributed in evaluating various proposals which has enabled the Company build a strong and diversified portfolio of investments with sustainable growth.

All the Independent Directors of the Company are made aware of their roles and responsibilities at the time of their appointment through a formal letter of appointment, which also stipulates various terms and conditions of their engagement.

H. Governance :

Company has a rich legacy of ethical governance practices many of which were implemented by the Company, even before they were mandated by law. The Company is committed to transparency in all its dealings and places high emphasis on business ethics.

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 .

I. Corporate Social Responsibility:

With a deeper understanding of societal issues, your Company has built the ‘Rise for Good’ mission around the four pillars of Community, People, Governance and Environment. With its focus on driving positive change to enable communities to Rise, your Company’s CSR initiatives are designed to support the constituencies of girls, youth and farmers through the domains of education, health and environment. The impact of some of the flagship CSR initiatives that your Company undertook in the last financial year are given below: -

– Project Nanhi Kali, supported the education of over 1,65,291 underprivileged girls across 10 States of India.

– Through Mahindra Hariyali 0.95 million trees were planted which contributed to improving green cover and protecting bio-diversity in the country

–The Integrated Water Management Program (IWMP) in Hatta and Bhopal (Madhya Pradesh) led to increased water availability in 48 villages of Bhopal, thereby directly improving agricultural productivity and increasing farmer income.

CORPORATE GOVERNANCE REPORT ANALYSIS

A. Board of Directors :

Mr. Anand G. Mahindra, Executive Chairman and Dr. Pawan Goenka, Managing Director are the Whole-time Directors of your Company. The remaining Non-Executive Directors, comprising of Seven Independent Directors including a Woman Director and One Non-Independent Director.

The Board of the Company has laid down two separate Codes of Conduct (“Codes”), one for all the Board Members and the other for Employees of the Company. The Code of Conduct for the Board Members of the Company also includes Code for Independent Directors which is a guide to professional conduct for Independent Directors, pursuant to section 149(8) and Schedule IV of the Act .

B. Remuneration to Directors :

A commission of Rs. 247.17 lakhs has been provided as payable to the Non-Executive Directors in the accounts for the year under review. Non-Executive Directors are also paid sitting fees of Rs. 1,00,000 each for every Meeting of the Board and Rs. 50,000 each for every Committee Meeting other than Stakeholders Relationship Committee. The sitting fees paid for every Meeting of Stakeholders Relationship Committee is Rs. 10,000 each for Non-Executive Director.

Remuneration to the Whole-time Directors is fixed by GNRC which is subsequently approved by the Board of Directors and Shareholders at a General Meeting. A salary of Rs. 364.49 lakhs , commission of Rs. 445.62 lakhs has been provided to the executed director Mr. Anand G Mahindra.

A salary of Rs. 387.70 lakh and commission of Rs. 483.89 has been provided to the Managing director Mr. Pawan Goenka.

C. Committees of the Board :

i) Audit Committee : This Committee comprises of the following Directors viz. Mr. T. N. Manoharan (Chairman of the Committee), Mr. Nadir B. Godrej, Mr. M. M. Murugappan and Mr. R. K. Kulkarni. All the Members of the Committee are Independent Directors. All the Members of the Committee possess strong accounting and financial management knowledge. The Company Secretary is the Secretary to the Committee.

ii) Governance, Nomination and Remuneration Committee : All Committee Members are Independent Directors including the Chairman. The Members are Mr. M. M. Murugappan (Chairman of the Committee), Mr. Nadir B. Godrej, Mr. R. K. Kulkarni and Mr. Vikram Singh Mehta. Mr. Anand G. Mahindra and Mr. Rajeev Dubey, Group President (HR & Corporate Services) & CEO (After-Market Sector) are permanent invitees to the Committee.

iii) Stakeholders Relationship Committee : The Company’s Stakeholders Relationship Committee functions under the Chairmanship of Mr. R. K. Kulkarni, Independent Director. Mr. Anand G. Mahindra, Dr. Vishakha N. Desai and Dr. Pawan Goenka are the other Members of the Committee. Mr. Narayan Shankar, Company Secretary is the Compliance Officer of the Company.

iv) Corporate Social Responsibility Committee : Dr. Vishakha N. Desai, Independent Director is the Chairperson of the Committee. Mr. Anand G. Mahindra, Dr. Pawan Goenka, Mr. R. K. Kulkarni and Mr. Vikram Singh Mehta are the other Members of the Committee. Out of the total number of Members of the Committee, three are Independent Directors.

D. Disclosures :

Disclosure of Accounting Treatment in preparation of Financial Statements :

The Company adopted Indian Accounting Standards (”Ind AS“) from 1st April, 2016. Accordingly, the financial statements have been prepared in accordance with Ind AS as per the Companies (Indian Accounting Standards) Rules, 2015 as amended and notified under section 133 of the Act and other relevant provisions of the Act.

Code for Prevention of Insider Trading Practices : The Company has formulated and adopted the ‘Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information’ and ‘Code of Conduct for Prevention of Insider Trading in Securities of Mahindra & Mahindra Limited’ (“M&M Code of Conduct” or “the Code”) in compliance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (“the Regulations”). The Securities and Exchange Board of India (SEBI) on 31st December, 2018, notified amendments to the Regulations which have come into force from 1st April, 2019.

E. Means of Communication :

The Company recognizes the importance of two way communication with shareholders and of giving a balanced reporting of results and progress. Full and timely disclosure of information regarding the Company’s financial position and performance is an important part of the Company’s corporate governance ethos. The Company follows a robust process of communicating with its stakeholders, security holders and investors through multiple channels of communications such as dissemination of information on the website of the Stock Exchanges, Press Releases, the Annual Reports and uploading relevant information on its website.

AUDITOR'S REPORT ANALYSIS

1. Impairment assessment of long-term investments in subsidiaries, joint ventures and associates :

The Company records its long-term investments at cost less any provision for impairment loss. Changes in business environment could have a significant impact on the valuation of these investments.

The auditor assessed the design, implementation and operating effectiveness of key controls in respect of the Company’s impairment review process, including the review and approval of forecasts and valuation models; Evaluated reasonableness of the valuation assumptions, such as discount rates, used by management through reference to external market data ,Evaluated past performances where relevant, and assessed historical accuracy of the forecast produced by management; and Enquired and challenged management on the commercial strategy associated with the products to ensure that it was consistent with the assumptions used in estimating future cash flows.

2. Recognition and impairment assessment of development expenditure capitalized and currently under development :

Management uses judgment to classify research and development related expenditure to be expensed or capitalized as intangible assets under development.

The auditors assessed design, implementation and operating effectiveness of recognition and classification of development expenditure, and evaluation of existence of any impairment; The auditors Tested project related expenditures with underlying documents relating to material costs, overheads and employee hours incurred to verify the existence and appropriateness of classification as research or development expenditure.

3. . Taxes including provision for current tax, valuation of uncertain tax positions and recognition of deferred taxes :

The Company is subject to periodic tax challenges by tax authorities leading to protracted litigations. As such, accounting for taxes involves management judgment in developing estimates of tax exposures and contingencies in order to assess the adequacy of tax provision.

The auditors assessed the design, implementation and operating of the Company’s process of recognition of tax expense, including uncertain tax positions and deferred taxes; Assessed completeness of uncertain tax positions in conjunction with our internal tax specialists by considering changes to business and tax legislation through discussions with management and review of correspondence with authorities where relevant; Assessed the calculation for the current tax provision and the procedures performed to analyse movements, including the rationale for any release, increase or continued provision in the year.

THANK YOU FOR READING.

BY : SHANYA SONI

B.COM (H)

2K17/BC/230