COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE
Your Company has been following fair, transparent and ethical governance practices. The governance processes and practices embedded into the culture of the Organisation ensure that the interest of all the stakeholders are taken into account in a balanced and transparent manner. Your Company believes that good Corporate Governance emerges from the application of best management practices and compliance with the laws coupled with the highest standards of integrity, transparency, accountability and business ethics.
Your Company also believes that sound Corporate Governance is critical to enhance and retain investor trust. Your Company continues to strengthen its governance principles to generate long term value for its stakeholders on sustainable basis thus ensuring ethical and responsible leadership both at the Board and at the Management levels.
A Report on compliance with the Corporate Governance provisions as prescribed under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") is given below.
I. BOARD OF DIRECTORS
The composition of the Board of your Company is in conformity with Regulation 17 of the Listing Regulations. The Chairman & Managing Director of your Company, though a Professional Director in his individual capacity, is a Promoter and the number of Non-Executive and Independent Directors is more than one-half of the total number of Directors.
Mr. Anand G. Mahindra, Chairman & Managing Director and Dr. Pawan Goenka, Executive Director & Group President (Auto and Farm Sector) 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 as on 31st March, 2016 are highly renowned professionals drawn from diverse fields, possess the requisite qualifications and experience in general corporate management, finance, banking, insurance, economics and other allied fields which enable them to contribute effectively to your Company and enhance the quality of Board's decision making process.
The maximum tenure of Independent Directors is in compliance with the Companies Act, 2013 ("the Act"). All the Independent Directors have confirmed that they meet the criteria as mentioned in Regulation 16(1)(b) of the Listing Regulations and section 149(6) of the Act.
As mentioned in the previous Annual Report, Mr. Bharat Doshi, Non-Executive Director had conveyed his desire to relinquish his position as a Director of your Company and accordingly ceased to be a Director with effect from the conclusion of the 69th Annual General Meeting ("AGM") held on 7th August, 2015.
Apart from reimbursement of expenses incurred in the discharge of their duties, the remuneration that these Directors were entitled to under the Act as Non-Executive Directors and the remuneration that a Director may receive for professional services rendered to the Company through a firm in which he is a partner, none of these Directors have any other pecuniary relationships with your Company, its Subsidiaries or Associates, or their Promoters, or Directors, during the two immediately preceding financial years or during the current financial year. None of the Directors of your Company are inter-se related to each other.
Professional fees for the year under review to Khaitan & Co., Advocates & Solicitors, in which Mr. R. K. Kulkarni, Non-Executive and Independent Director is a partner, amounted to Rs. 124.20 lakhs (including out of pocket expenses).
The Senior Management of your Company have made disclosures to the Board confirming that there are no material financial and commercial transactions between them and the Company which could have potential conflict of interest with the Company at large.
A. Composition of the Board
The Board of your Company comprises of ten Directors as on 31st March, 2016. The names and categories of Directors, the number of Directorships and Committee positions held by them in the companies are given below. None of the Director is a Director in more than 10 public limited companies (as specified in section 165 of the Act) or acts as an Independent Director in more than 7 listed companies or 3 listed companies in case he/she serves as a Whole-time Director in any listed company (as specified in Regulation 25 of the Listing Regulations). Further, none of the Directors on the Board is a Member of more than 10 Committees and Chairman of more than 5 Committees (as specified in Regulation 26 of the Listing Regulations), across all the Indian public limited companies in which he/she is a Director.
B. Board Procedure
A detailed Agenda, setting out the business to be transacted at the Meeting(s), supported by detailed notes is sent to each Director at least seven days before the date of the Board Meeting(s) and of the Committee Meeting(s). To provide web-based solution, a soft copy of the said Agenda(s) is also uploaded on the Board Portal which acts as a document repository. The Directors are also provided the facility of video conferencing to enable them to participate effectively in the Meeting(s), as and when required.
To enable the Board to discharge its responsibilities effectively and take informed decisions, the Chairman & Managing Director apprises the Board at every Meeting of the overall performance of your Company, followed by a Presentation by the Executive Director & Group President (Auto and Farm Sector). A detailed functional Report is also presented at the Board Meeting(s).
The Board also, inter alia, periodically reviews strategy and business plans, annual operating and capital expenditure budget(s), investment and exposure limit(s), compliance report(s) of all laws applicable to your Company, as well as steps taken by your Company to rectify instances of non-compliances, review of major legal issues, minutes of the Committees of the Board and of Board Meetings of your Company's subsidiary companies, significant transactions and arrangements entered into by the unlisted subsidiary companies, approval of quarterly/half-yearly/annual results, significant labour problems and their proposed solutions, safety and risk management, transactions pertaining to purchase/disposal of property(ies), major accounting provisions and write-offs, corporate restructuring, details of any joint ventures or collaboration agreement, material default in financial obligations, if any, fatal or serious accidents, any material effluent or pollution problems, transactions that involve substantial payment towards goodwill, brand equity or intellectual property, any issue that involves possible public or product liability claims of substantial nature, including judgement or order which may have passed strictures on the conduct of your Company, quarterly details of foreign exchange exposures and the steps taken by Management to limit the risks of adverse exchange rate movement and information on recruitment of Senior Officers just below the Board level.
The Board sets annual performance objectives, oversees the actions and results of the management, evaluates its own performance, performance of its Committees and individual Directors on an annual basis and monitors the effectiveness of the Company's governance practices for enhancing the stakeholders' value.
Apart from Board members and the Company Secretary, the Board and Committee Meetings are generally also attended by the Chief Financial Officer and wherever required the Heads of various corporate functions.
C. Number of Board Meetings, Attendance of the Directors at Meetings of the Board and at the Annual General Meeting
During the year 1st April, 2015 to 31st March, 2016, six Board Meetings were held on the following dates - 29th May, 2015, 7th August, 2015, 6th November, 2015, 21st December, 2015, 12th February, 2016 and 29th March, 2016. The Board met at least once in every Calendar Quarter and the gap between two Meetings did not exceed one hundred and twenty days. These Meetings were well attended. The 69th AGM of your Company was held on 7th August, 2015.
D. Meetings of Independent Directors
The Independent Directors of your Company meet before the Board Meeting without the presence of the Chairman & Managing Director, Executive Director, other Non-Independent Director(s) or any other Management Personnel.
These Meetings are conducted in an informal and flexible manner to enable the Independent Directors to, inter alia, discuss matters pertaining to review of performance of Non-Independent Directors and the Board as a whole, review the performance of the Chairman of the Company (taking into account the views of the Executive and Non-Executive Directors), assess the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
Five Meetings of Independent Directors were held during the year and these Meetings were well attended.
E. Director(s) seeking Appointment/Re-appointment
Mr. S. B. Mainak, Non-Independent Director, Nominee of Life Insurance Corporation of India ("LIC") is liable to retire by rotation and being eligible for re-appointment at the forthcoming AGM of your Company, has offered himself for re-appointment.
Mr. S. B. Mainak, a qualified Chartered Accountant, joined LIC as a Direct Recruit Officer in 1983 and retired as its Managing Director with effect from 1st March, 2016. During his long tenure at LIC, Mr. Mainak acquired wide range of experience in several functions spanning Investments, Finance & Accounts and Marketing and held various positions including Senior/ Branch Manager, Divisional Manager of Pension & Group Superannuation and in various capacities in the Investment Department.
Mr. Mainak also had a stint in academics as a Professor (Life Insurance) and Head of Finance Department in National Insurance Academy ("NIA"), Pune, where he was instrumental in creating new teaching programmes in Finance & Accounts, Investment, GAAP Accounting and Insurance Investment and Financial Reporting Standards. Mr. Mainak was Deputy President of the Insurance Institute of India and a Member of the Governing Board of NIA. He was earlier appointed by the Government of India on the Board of Satyam Computer Services Limited as an Independent Director for restructuring the company.
In 2009, he was conferred the 'NDTV Profit Business Leadership Award', 'CNN-IBN Indian of the Year Award' and 'Dataquest IT Person of the Year Award'.
Mr. Mainak is the Non-Executive Chairman of Credit Analysis and Research Limited. He is on the Boards of Mahindra & Mahindra Limited and ITC Limited, representing LIC. He is also a Member of CSR & Sustainability Committee of ITC Limited.
Mr. Mainak does not hold any shares in your Company.
F. Codes of Conduct
The Board of your Company has laid down two separate Codes of Conduct ("Codes"), one for all the Board Members and the other for Senior Management and Employees of the Company. These Codes have been posted on the Company's website <http://www.mahindra.com>. All the Board Members and Senior Management Personnel have affirmed compliance with these Codes. A declaration signed by the Chairman & Managing Director to this effect is enclosed at the end of this Report.
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.
G. CEO/CFO Certification
As required under Regulation 17(8) of the Listing Regulations, the Chairman & Managing Director (CEO) and Group CFO, Group CIO & President (Group Finance and M&A) of the Company have certified to the Board regarding the Financial Statements for the year ended 31st March, 2016.
H. Board Evaluation
Pursuant to the provisions of the Act and the Listing Regulations, the Board has carried out an annual evaluation of its own performance and that of its Committees as well as performance of all the Directors individually. Feedback was sought by way of a structured questionnaire covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance and the evaluation was carried out based on responses received from the Directors.
A separate exercise was carried out by the Governance, Nomination and Remuneration Committee of the Board to evaluate the performance of individual Directors. The performance evaluation of the Non-Independent Directors and the Board as a whole was carried out by the Independent Directors. The performance evaluation of the Chairman of the Company was also carried out by the Independent Directors, taking into account the views of the Executive Director and Non-Executive Directors. The Directors expressed their satisfaction with the evaluation process.
I. Familiarisation Programme for Independent Directors
Pursuant to Regulation 25(7) of the Listing Regulations, the Company imparted various familiarisation programmes for its Directors including visit to Company's Plant, review of Strategic Investments of the Company by Strategic Investment Committee, industry outlook at the Board Meetings, regulatory updates at Board and Audit Committee Meetings, Presentations on Internal Control over Financial Reporting, Operational Control over Financial Reporting, Prevention of Insider Trading Regulations, SEBI Listing Regulations, Framework for Related Party Transactions, etc. Pursuant to Regulation 46 the details required are available on the website of your Company at the web link: <http://www.mahindra.com/resources/investor-reports/> FY16/Annual Reports/Links-AnnualReport.zip.
II. REMUNERATION TO DIRECTORS
A. Remuneration Policy
Your Company has a well-defined Policy for Remuneration of the Directors, Key Managerial Personnel and other Employees. The Policy was approved by the Board of your Company at its Meeting held on 31st October, 2014, based on the recommendations made by the Governance, Nomination and Remuneration Committee ("GNRC"). This Policy is furnished in Annexure IV-B to the Board's Report.
GNRC while deciding the basis for determining the compensation, both fixed and variable to the Non-Executive Directors, takes into consideration various factors such as Director's participation in Board and Committee Meetings during the year, other responsibilities undertaken, such as Membership or Chairmanship of Committees, time spent in carrying out other duties, role and functions as envisaged in Schedule IV of the Act and Listing Regulations and such other factors as the GNRC may consider deem fit.
The elements of remuneration package of Executive Directors includes salary, benefits, stock options, provident fund, etc. The Non-Executive Directors are paid remuneration in the form of sitting fees and commission.
B. Remuneration to Non-Executive Directors for the year ended 31st March, 2016
Pursuant to the approval granted by the Shareholders of the Company at the 69th Annual General Meeting held on 7th August, 2015, the eligible Non-Executive Directors are paid commission upto a maximum of 1% of the net profits of the Company for each financial year, as computed in the manner laid down in section 198 of the Act or any statutory modification(s) or re-enactment thereof or Rs. 38 crores in the aggregate, whichever is lower; provided that none of such Directors, in any Financial Year individually receive a portion of such remuneration more than one quarter percent of the net profits of the Company.
During the year under review, the Non-Executive Directors were paid a commission of Rs. 207.33 lakhs (provided for in the accounts for the year ended 31st March, 2015), distributed amongst the Directors as under:
A commission of Rs. 181.07 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 for every Meeting of Stakeholders Relationship Committee is Rs. 10,000 each for Non-Executive Director.
III. RISK MANAGEMENT
Your Company has a well-defined risk management framework in place. The risk management framework works at various levels across the Company. These levels form the strategic defence cover of the Company's risk management. The Company has a robust organisational structure for managing and reporting on risks.
Your Company has constituted a Risk Management Committee consisting of Board members which is authorised to monitor and review risk management plan and risk certificate. The Committee is also empowered, inter alia, to review and recommend to the Board the modifications 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 Risk Management Policy approved by the Board, inter alia, includes identification therein of elements of risk, including those which in the opinion of the Board, may threaten the existence of the Company. Risk management process has been established across the Company 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 functions and revolves around the goals and objectives of the Company.
IV. COMMITTEES OF THE BOARD
A. 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 and Mr. R. K. Kulkarni. All the Directors are Independent Directors. During the year under review, Mr. Bharat Doshi ceased to be a member with effect from the conclusion of the 69th Annual General Meeting held on 7th August, 2015. All the Members of the Committee possess strong accounting and financial management knowledge. The Company Secretary is the Secretary to the Committee.
The terms of reference of this Committee are very wide and are in line with the regulatory requirements mandated by the Act and Part C of Schedule II of the Listing Regulations. Besides having access to all the required information from within the Company, the Committee can obtain external professional advice whenever required. The Committee acts as a link between the Statutory and the Internal Auditors and the Board of Directors of the Company. It is authorised to, inter alia, review and monitor the Auditor's independence and performance, effectiveness of audit process, oversight of the Company's financial reporting process and the disclosure of its financial information, review with the management, the quarterly and annual financial statements and auditor's report before submission to the Board for approval, select and establish accounting policies, review Reports of the Statutory and the Internal Auditors and meet with them to discuss their findings, suggestions and other related matters, approve (wherever necessary) transactions of the Company with related parties including subsequent modifications thereof, grant omnibus approvals for related party transactions subject to fulfilment of certain conditions, scrutinise inter-corporate loans and investments, valuation of undertakings or assets of the Company, review the risk assessment and minimisation procedures, evaluate internal financial controls and risk management systems, monitor end use of the funds raised through public offers and related matters, etc.
The Committee is also empowered to, inter alia, recommend the remuneration payable to the Statutory Auditors and to recommend a change in the Auditors, if felt necessary. Further, the Committee is empowered to recommend to the Board the term of appointment and remuneration of the Cost Auditor, Internal Auditor and Chief Financial Officer (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function), etc., review the functioning of the Whistleblower Policy/Vigil Mechanism. The Committee also reviews Financial Statements and investments of unlisted subsidiary companies, Management Discussion & Analysis of financial condition and results of operations, material individual transactions with related parties not in normal course of business or which are not on an arm's length basis, if any.
The Audit Committee has been granted powers as prescribed under Regulation 18(2)(c) of the Listing Regulations and reviews all the information as prescribed in Part C of Schedule II of the Listing Regulations. The Committee also reviews on quarterly basis the Report on compliance under Code of Conduct for Prevention of Insider Trading adopted by the Company pursuant to Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. Further, Compliance Reports under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Whistleblower Policy are also placed before the Committee.
The Meetings of the Audit Committee are also attended by the Chairman & Managing Director, the Executive Director & Group President (Auto and Farm Sector), the Group CFO Group CIO & President (Group Finance and M&A), the President (Group M&A, Corporate Accounts & Group Secretarial), the Executive Vice President - Corporate Finance & Investor Relations, the Statutory Auditors, the Chief Internal Auditor, the Controller of Accounts, the Managing Partner - Mahindra Partners & President (Group Legal) and the Company Secretary. The Cost Auditor also attends the Committee Meeting at which the Cost Audit Report(s) are considered.
The Chairman of the Audit Committee, Mr. Deepak S. Parekh was present at the 69th Annual General Meeting of the Company held on 7th August, 2015 to address the Shareholders' queries pertaining to Annual Accounts of the Company.
The Committee met six times during the year under review. The Committee Meetings were held on 28th May, 2015, 6th August, 2015, 5th November, 2015, 21st December, 2015, 11th February, 2016 and 28th March, 2016. The gap between two Meetings did not exceed one hundred and twenty days.
B. Governance, Nomination and Remuneration Committee
The Governance, Nomination and Remuneration Committee has been vested with the authority to, inter alia, recommend nominations for Board Membership, develop and recommend policies with respect to composition of the Board commensurate with the size, nature of the business and operations of the Company, establish criteria for selection to the Board with respect to the competencies, qualifications, experience, track record, integrity, establish Director retirement policies and appropriate succession plans and determine overall compensation policies of the Company.
The Committee also administers the Company's Employee Stock Option Schemes formulated from time to time including "Mahindra & Mahindra Limited Employees' Stock Option Scheme - 2000", "Mahindra & Mahindra Limited Employees Stock Option Scheme - 2010" and take appropriate decisions in terms of the concerned Scheme(s).
The terms of reference of this Committee are in line with the regulatory requirements mandated in the Act and Part D of Schedule II of the Listing Regulations.
The scope of the Committee also includes review of market practices and decide on remuneration packages to the Chairman & Managing Director, the Executive Director(s), Presidents, etc., lay down performance parameters for the Chairman & Managing Director, the Executive Director(s), Presidents, etc. and review the same.
In addition to the above, the Committee's role includes identifying persons who are qualified to become Directors and who may be appointed in Senior Management in accordance with the criteria laid down, recommending to the Board their appointment and removal and carrying out evaluation of every Director's performance.
The Committee has also formulated the criteria for determining qualifications, positive attributes and independence of a Director and recommended to the Board a Policy relating to the remuneration for the Directors, Key Managerial Personnel and other Employees.
The Committee also carries out a separate exercise to evaluate the performance of individual Directors. Feedback is sought by way of structured questionnaires covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance and performance evaluation is carried out based on the responses received from the Directors.
The performance evaluation of Independent Directors were based on the criteria viz. attendance at Board and Committee Meetings, skill, experience, ability to challenge views of others in a constructive manner, knowledge acquired with regard to the Company's business, understanding of industry and global trends, etc.
The Committee is also empowered to opine, in respect of the services rendered by a Director in professional capacity, whether such Director possesses requisite qualification for the practice of the profession.
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.
As per section 178(7) of the Act and Secretarial Standards, the Chairman of the Committee or, in his absence, any other Member of the Committee authorised by him in this behalf shall attend the General Meetings of the Company. The Chairman of the Committee, Mr. M. M. Murugappan was present at the 69th Annual General Meeting of the Company held on 7th August, 2015.
The Committee met four times during the year under review. The Committee Meetings were held on the following dates 28th May, 2015, 6th August, 2015, 5th November, 2015 and 29th March, 2016
C. 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. Consequent to the cessation as a Director in the Company, Mr. Bharat Doshi ceased to be a Member of the Committee with effect from the conclusion of the 69th Annual General Meeting held on 7th August, 2015. Dr. Pawan Goenka was inducted as a Member of the Committee in place of Mr. Doshi.
The Committee meets, as and when required, to inter alia, deal with matters relating to transfer/transmission of shares, request for issue of duplicate share certificates and monitor redressal of the grievances of the security holders of the Company relating to transfers, non-receipt of Annual Report, non-receipt of dividends declared, etc. With a view to expedite the process of share transfers, necessary authority has been delegated to certain officers of the Company to approve the transfers of not more than 10,000 Ordinary (Equity) Shares per transfer, provided the transferee does not hold 2,00,000 or more Ordinary (Equity) Shares in your Company. The Committee is also authorised to approve request for transmission of shares and issue of duplicate share certificates.
The role and terms of reference of the Committee covers the areas as contemplated under Regulation 20 read with Part D of Schedule II of the Listing Regulations and section 178 of the Act, as applicable, besides the other terms as referred by the Board of Directors.
As per section 178(7) of the Act and the Secretarial Standards, the Chairman of the Committee or, in his absence, any other Member of the Committee authorised by him in this behalf shall attend the General Meetings of the Company. The Chairman of the Committee, Mr. R. K. Kulkarni was present at the 69th Annual General Meeting of the Company held on 7th August, 2015.
During the year, 19 complaints were received from the Shareholders, all of which have been attended/resolved to the satisfaction of the Shareholders. As of date, there are no pending share transfers pertaining to the year under review.
The Committee met four times during the year under review. The Committee Meetings were held on 29th May, 2015, 6th November, 2015, 12th February, 2016 and 29th March, 2016.
D. Corporate Social Responsibility Committee
The Corporate Social Responsibility ("CSR") Committee is a Committee constituted by the Board with powers, inter alia, to make donations/contributions to any Charitable and /or CSR projects or programs to be implemented directly or through an executing agency or other Not for Profit Agency with minimum three years proven track record or through a Corporate Foundation or other reputed Non-Governmental Organisation, of at least two percent of the Company's average net profits during the three immediately preceding Financial Years in pursuance of its CSR Policy for the Company's Corporate Social Responsibility Initiatives
The scope of functions of the Committee includes, inter alia, the formulation and recommendation to the Board for its approval and implementation, the Business Responsibility ("BR") Policy(ies) of the Company, undertake periodical assessment of the Company's BR performance, review the draft Business Responsibility Report and recommend the same to the Board for its approval and inclusion in the Annual Report of the Company.
The role of this Committee also includes recommendation of the amount of expenditure to be incurred on the CSR activities as enumerated in Schedule VII of the Act and also referred to in the CSR Policy of the Company, as also to monitor the CSR Policy from time to time, etc.
The CSR Policy for your Company as duly amended is displayed on the Company's website <http://www.mahindra.com>.
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. Consequent to the cessation as a Director in the Company, Mr. Bharat Doshi ceased to be a Member of the Committee with effect from the conclusion of the 69th Annual General Meeting held on 7th August, 2015. The Committee met three times during the year. The Committee Meetings were held on 28th May, 2015, 5th November, 2015 and 29th March, 2016. The attendance at the Meetings was as under:
E. Risk Management Committee
Regulation 21 of the Listing Regulations mandates constitution of the Risk Management Committee. The Committee is required to lay down the procedures to inform to the Board about the risk assessment and minimisation procedures and the Board shall be responsible for framing, implementing and monitoring the Risk Management Plan of the Company. The Board has constituted a Risk Management Committee. The Committee is headed by Dr. Pawan Goenka. The other Members are Mr. Deepak S. Parekh, Mr. Nadir B. Godrej, Mr. M. M. Murugappan and Mr. R. K. Kulkarni. Consequent to the cessation as a Director in the Company, Mr. Bharat Doshi ceased to be a member of the Committee with effect from the conclusion of the 69th Annual General Meeting held on 7th August, 2015.
During the year under review, the Committee met on 28th May, 2015 and 5th November, 2015 which was attended by all of its Members.
F. Research & Development Committee (a voluntary initiative of your Company)
The Research & Development ("R&D") Committee, which was constituted by the Board in 1998, provides direction on the R&D mission and strategy and key R&D and technology issues. The Committee also reviews and makes recommendations on the skills and competencies required and the structure and the process needed to ensure that the R&D initiatives result in products that are in keeping with the business needs. Mr. M. M. Murugappan is the Chairman of the Committee. Mr. Anand G. Mahindra, Dr. Pawan Goenka and Mr. Nadir B. Godrej are the other Members of the Committee. Consequent to the cessation as a Director in the Company, Mr. Bharat Doshi ceased to be a Member of the Committee with effect from the conclusion of the 69th Annual General Meeting held on 7th August, 2015.
The Committee met three times during the year under review on 28th May, 2015, 5th November, 2015 and 11th February, 2016. These Meetings were attended by all of its Members.
G. Strategic Investment Committee (a voluntary initiative of your Company)
The Strategic Investment Committee is constituted by the Board with powers, inter alia, to evaluate and scrutinise significant investments/funding including but not limited to business acquisitions, reviewing and monitoring existing investments in subsidiaries, joint ventures and other group companies, overseeing and reviewing performance of various subsidiaries and making necessary recommendations to the Board from time to time including disinvestments. Mr. Anand G. Mahindra is the Chairman of the Committee. Mr. Deepak S. Parekh, Mr. Nadir B. Godrej, Mr. Vikram Singh Mehta and Mr. Anupam Puri are the other Members of the Committee. Consequent to the cessation as a Director in the Company, Mr. Bharat Doshi ceased to be a Member of the Committee with effect from the conclusion of the 69th Annual General Meeting held on 7th August, 2015.
The Committee met five times during the year under review on 28th May, 2015, 6th August, 2015, 5th November, 2015, 11th February, 2016 and 28th March, 2016.
H. Loans & Investment Committee
(a voluntary initiative of your Company)
The Loans & Investment Committee is authorised to approve loans and investment, disinvestment, borrowing moneys and related aspects of fund management in accordance with the authority granted and the parameters prescribed by the Board with Mr. Anand G. Mahindra as the Chairman of the Committee and the other Members being Dr. Pawan Goenka, Mr. R. K. Kulkarni and Mr. Vikram Singh Mehta. Consequent to the cessation as a Director in the Company, Mr. Bharat Doshi ceased to be a Member of the Committee with effect from the conclusion of the 69th Annual General Meeting held on 7th August, 2015.
The Committee met eight times during the year under review on 21st May, 2015, 23rd July, 2015, 16th September, 2015, 27th October, 2015, 14th December, 2015, 5th February, 2016, 11th February, 2016 and 2nd March, 2016.
V. SUBSIDIARY COMPANIES
Regulation 16 of the Listing Regulations defines a "material subsidiary" to mean a subsidiary, whose income or net worth exceeds twenty percent of the consolidated income or net worth respectively, of the listed entity and its subsidiaries in the immediately preceding accounting year.
Under this definition, the Company did not have any unlisted material subsidiary, incorporated in India during the year under review.
The subsidiaries of the Company function independently, with an adequately empowered Board of Directors and adequate resources. For more effective governance, the minutes of Board Meetings of subsidiaries of the Company are placed before the Board of Directors of the Company for their review at every quarterly Meeting.
The other requirement of Regulation 24 of the Listing Regulations with regard to Corporate Governance requirements for Subsidiary Companies have been complied with.
A. Policy for determining 'material' subsidiaries
Your Company has formulated a Policy for Determining 'Material' Subsidiaries as defined in Regulation 16 of the Listing Regulations. This Policy has also been posted on the website of the Company and can be accessed through web link: <http://www.mahindra.com/resources/investor-reports/FY16/> Annual Reports/Links-AnnualReport.zip.
B. Policy on Materiality of and Dealing with Related Party Transactions
Your Company has formulated a Policy on Materiality of and Dealing with Related Party Transactions which specify the manner of entering into related party transactions. This Policy has also been posted on the website of the Company and can be accessed through web link: <http://www.mahindra>. com/resources/investor-reports/FY16/Annual Reports/Links-AnnualReport.zip.
C. Disclosure of Transactions with Related Parties
During the Financial Year 2015-16, there were no materially significant transactions or arrangements entered into between the Company and its Promoters, Directors or their Relatives or the Management, Subsidiaries, etc. that may have potential
conflict with the interests of the Company at large. Further, details of related party transactions are presented in Note Number 42 to Annual Accounts in the Annual Report.
D. Disclosure of Accounting Treatment in preparation of Financial Statements
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) and comply with the Accounting Standards specified under section 133 of the Act.
E. Code for Prevention of Insider Trading Practices
The Company has instituted a comprehensive Code of Conduct for Prevention of Insider Trading, in compliance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 ("the Regulations") which came into force from 15th May, 2015. 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"). These Codes were also made effective from 15th May, 2015.
M&M Code of Conduct has been formulated to regulate, monitor and ensure reporting of trading by the Employees and Connected Persons designated on the basis of their functional role in the Company towards achieving compliance with the Regulations and is designed to maintain the highest ethical standards of trading in Securities of the Company by persons to whom it is applicable. M&M Code of Conduct lays down Guidelines, which advises them on procedures to be followed and disclosures to be made, while dealing with shares of the Company and cautions them of the consequences of violations.
F. Whistleblower Policy
The Vigil Mechanism as envisaged in the Act and the Rules prescribed thereunder and the Listing Regulations is implemented through the Whistleblower Policy to provide for adequate safeguards against victimisation of persons who use such mechanism and make provision for direct access to the Chairperson of the Audit Committee.
As such the Whistleblower Policy provides for protected disclosure and protection to the Whistleblower. Under the Vigil Mechanism all Stakeholders have been provided access to the
Audit Committee through the Chairperson. No personnel has been denied access to the Audit Committee. All Employees, Directors, vendors, suppliers or other stakeholders associated with the Company can make the Protected Disclosure through an email to email@example.com.
The Chairperson of the Audit Committee can be reached by sending an email to chairpersonauditcommittee@mahindra. com or by sending a letter to the below address:
Chairperson of the Audit Committee
Mahindra & Mahindra Limited
Mahindra Towers, Dr. G.M. Bhosale Marg, P.K. Kurne Chowk, Worli, Mumbai 400 018.
Whistleblower Policy of the Company is available on the website of the Company and can be accessed at the web link: <http://www.mahindra.com/resources/investor-reports/FY16/> Annual Reports/Links-AnnualReport.zip.
VII. MEANS OF COMMUNICATION
Your Company, from time to time and as may be required, communicates with its 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.
The unaudited quarterly results are announced within forty-five days of the close of each quarter, other than the last quarter. The audited annual results are announced within sixty days from the end of the financial year as required under the Listing Regulations. The aforesaid financial results are announced to the Stock Exchanges within the statutory time period from the conclusion of the Board Meeting (s) at which these were considered and approved.
Your Company discloses to the Stock Exchanges, all information required to be disclosed under Regulation 30 read with Part 'A' and Part 'B' of Schedule III of the Listing Regulations including material information having a bearing on the performance/ operations of the Company and other price sensitive information. All information is filed electronically on BSE's online portal - BSE Corporate Compliance & Listing Centre (Listing Centre) and on NSE Electronic Application Processing System (NEAPS), the online portal of National Stock Exchange of India Limited.
Presentations are also made to international and national institutional investors and analysts. These presentations and other disclosures which are required to be disseminated on the Company's website under the Listing Regulations have been uploaded on the website of the Company and as per the Archival Policy of the Company would be hosted on the website for a minimum period of five years from the date of respective disclosures. The Annual Report of the Company, the quarterly/half-yearly and the audited financial statements and the official news releases of the Company are also disseminated on the Company's website. The quarterly, half-yearly and yearly results are also published in Business Standard and Sakal which are national and local dailies respectively. These are not sent individually to the Shareholders.
VIII. GENERAL SHAREHOLDER INFORMATION
1. 70th Annual General Meeting
Date : 10th August, 2016 Time : 3:00 p.m.
Venue : Birla Matushri Sabhagar, 19, Sir Vithaldas Thackersey Marg (New Marine Lines), Mumbai - 400 020.
2. Financial Year of the Company
The financial year covers the period from 1st April to 31st March.
3. Date of Book Closure and Dividend Payment Date
Book Closure for Dividend will be from Saturday, 23rd July, 2016 to Wednesday, 10th August, 2016, both days inclusive and the Dividend would be paid/despatched after 10th August, 2016.
4. Listing of Ordinary (Equity) Shares, Debentures on Stock Exchanges and Stock Code
Your Company's Ordinary (Equity) Shares are listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE). The Global Depository Receipts (GDRs) of your Company are listed on the Luxembourg Stock Exchange and are also admitted for trading on International Order Book (IOB) of the London Stock Exchange. The requisite listing fees have been paid in full to all these Stock Exchanges.
The Company's privately placed Non-Convertible Debentures of Rs. 500 crores are listed on the Debt Segment of BSE.
Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai 400 001.
Type of Security/ Scrip Code: Ordinary (Equity) Shares/ 500520
National Stock Exchange of India Limited
Exchange Plaza, C-1, Block G, Bandra-Kurla-Complex, Bandra (East), Mumbai-400 051.
Type of Security/ Scrip Code: Ordinary (Equity) Shares/M&M
International Securities Identification Number (ISIN): INE101A01026
Bourse de Luxembourg Society de la Bourse de Luxembourg, Societe
Anonyme/ R.C.B. 6222, B.P. 165, L-2011, Luxembourg
Type of Security/ Scrip Code: Global Depository Receipts (GDRs)
International Securities Identification Number (ISIN): USY541641194
London Stock Exchange
Plc, 10, Paternoster Square, London - EC4M 7LS.
Type of Security/ Scrip Code: GDRs / MHID
Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai 400 001.
Type of Security/ Scrip Code: Debentures/949342 / Scrip ID:955MML2063
International Securities Identification Number (ISIN): INE101A08070
5. Corporate Identity Number:
6. Registered Office Address
Mahindra & Mahindra Limited Gateway Building, Apollo Bunder, Mumbai - 400 001.
7. Registrar and Transfer Agents
The Board of Directors of the Company at its Meeting held on 30th May, 2016, decided to appoint M/s. Karvy Computershare Private Limited, details whereof are given below, as its Registrar and Transfer Agents with effect from 13th June, 2016 in place of M/s. Sharepro Services (India) Private Limited.
Karvy Computershare Private Limited
Unit : Mahindra & Mahindra Limited
Karvy Selenium Tower B, Plot No. 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad, Telangana - 500 032, India.
Tel. No. : +91 40 6716 2222 Fax No. : +91 40 2342 0814
E-mail : firstname.lastname@example.org Website : www.karvycomputershare.com
Toll Free No. : 1800 3454 001
8. Share Transfer System
Trading in Ordinary (Equity) Shares of the Company through recognized Stock Exchanges is permitted only in dematerialized form.
Shares sent for transfer in physical form are registered and returned within a period of fifteen days from the date of receipt of the documents, provided the documents are valid and complete in all respects. With a view to expedite the process of share transfers, Mr. V S Parthasarathy,
Group CFO, Group CIO & President (Group Finance and M&A) or Mr. Zhooben Bhiwandiwala, Managing Partner -Mahindra Partners & President (Group Legal) or Mr. S. Durgashankar, President (Group M&A, Corporate Accounts & Group Secretarial) or Mr. Narayan Shankar, Company Secretary of the Company have been severally authorised to approve the transfers of not more than 10,000 Ordinary (Equity) Shares per transfer, provided the transferee does not hold two lakh or more Ordinary (Equity) Shares in the Company. The Stakeholders Relationship Committee meets as and when required to inter alia consider the other transfer proposals, requests for issue of duplicate share certificates, attend to Shareholders' grievances, etc.
9. Dematerialisation of Shares and Liquidity
99.10% of the paid-up Ordinary (Equity) Share Capital of your Company is held in a dematerialised form with National Securities Depository Limited and Central Depository Services (India) Limited as on 31st March, 2016. The market lot of the Share of your Company is one Share, as the trading in the Equity Share of your Company permitted only in dematerialised form. Non-Promoters' holding as on 31st March, 2016 is around 74.56% and the stock is highly liquid.
10. Outstanding GDRs/ADRs/Warrants or any Convertible Instruments, Conversion date and likely impact on equity
3,45,30,583 GDRs were outstanding as on 31st March, 2016. Since the underlying Ordinary (Equity) Shares represented by GDRs have been allotted in full, the outstanding GDRs have no impact on the Equity of the Company. There are no other convertible instruments outstanding as on 31st March, 2016.
11. Commodity price risk or Foreign Exchange Risk & hedging activities
Commodities witnessed a sharp drop in prices in the financial year under review led by Crude oil prices. Your Company was able to capitalise and take benefit of the same along with other value engineering activities in the year.
Your Company continues to watch the market situation closely and continues to focus on mitigating the inflationary impact through "Commodity Risk Management" and other cost reduction measures. Hedging of commodities as a part of "Commodity Risk Management" as well as Foreign Exchange and Commodity price risks are being governed in accordance with the Foreign Exchange Risk Management Policy and Commodity Risk Management Policy, approved by the Board of Directors of your Company.
The details of Foreign Exchange hedging activities undertaken by the Company is disclosed in Note No. 43 of the Annual Report.
12. Plant Locations
Your Company's manufacturing facilities are located at Kandivali, Nashik, Igatpuri, Nagpur, Zaheerabad, Jaipur, Rudrapur, Haridwar and Mohali.
13. Address for correspondence
Shareholders may correspond with the Registrar and
Transfer Agents at:
Karvy Computershare Private Limited
Unit : Mahindra & Mahindra Limited
Karvy Selenium Tower B, Plot No. 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad, Telangana - 500 032, India.
Tel. No. : +91 40 6716 2222 Fax No. : +91 40 2342 0814
E-mail : email@example.com Website : www.karvycomputershare.com
Toll Free No. : 1800 3454 001
for all matters relating to transfer/dematerialisation of shares, payment of dividend and any other query relating to Equity Shares of your Company.
The Registrar and Transfer Agents also have an Office at:
Karvy Computershare Private Limited
24-B, Raja Bahadur Mansion, Ground Floor, Ambalal Doshi Marg, Behind BSE, Fort, Mumbai 400 023.
Tel. No. : +91 22 6623 5454/412/427
Your Company has also designated firstname.lastname@example.org as an exclusive email ID for Investors for the purpose of registering complaints and the same has been displayed on the Company's website.
Karvy Computershare Private Limited also acts as Registrar and Transfer Agents for the Listed Debentures of the Company.
Securityholders would have to correspond with the respective Depository Participants for Shares held in demateralised form for transfer/transmission of Shares, change of Address, change in Bank details, etc.
For all investor related matters, the Company Secretary & Compliance Officer can also be contacted at:
Mahindra Towers, 5th Floor, Dr. G. M. Bhosale Marg, Worli, Mumbai - 400 018.
Tel. No. : +91 22 24975074 Fax No. : +91 22 24900833 Email : email@example.com
Your Company can also be visited at its website: <http://www.mahindra.com >
14. Address for correspondence with Debenture Trustee
Axis Trustee Services Limited 2nd Floor, E-Wing, Axis House, Bombay Dyeing Mills Compound, Pandurang Budhkar Marg, Worli, Mumbai 400 025. Tel. No.: +91-22-2425 5216.
15. Disclosures with respect to demat suspense account/ unclaimed suspense account
The Company does not have any shares in the demat suspense account/unclaimed suspense account.
16. Management Discussion and Analysis Report
Management Discussion and Analysis Report forms part of this Annual Report.
17. Details of non-compliance etc.
Your Company has complied with all the requirements of regulatory authorities. During the last three years, there were no instances of non-compliance by the Company and no penalty or strictures were imposed on the Company by the Stock Exchanges or SEBI or any statutory authority, on any matter related to the capital markets. The Company has also complied with the requirements of Corporate Governance Report of Paras (2) to (10) mentioned in Part 'C' of Schedule V of the Listing Regulations and disclosed necessary information as specified in Regulation 17 to 27 and Regulation 46(2) (b) to (i) in the respective places in this Report.
18. Compliance with Mandatory requirements
Your Company has complied with all the mandatory requirements of the Listing Regulations relating to Corporate Governance.
19. Compliance with Non-mandatory requirements Audit Qualifications:
During the year under review, there is no audit qualification in your Company's standalone financial statements. Your Company continues to adopt best practices to ensure regime of unqualified financial statements.