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You can view the entire text of Notes to accounts of the company for the latest year

BSE: 500520ISIN: INE101A01026INDUSTRY: Auto - Cars & Jeeps

BSE   ` 734.65   Open: 735.05   Today's Range 728.90
737.85
+0.40 (+ 0.05 %) Prev Close: 734.25 52 Week Range 695.20
992.00
Year End :2018-03 

Notes:

a. Additions during the year includes borrowing costs capitalised during the year Rs. 1.56 crores (2017 : Rs. 8.42 crores).

b. Buildings include Rs. * crores (2017 : Rs. * crores) being the value of shares in co-operative housing societies.

* denotes amounts less than Rs. 50,000.

(a) The amount of inventories recognized as an expense Rs. 39,448.41 crores (2017 : Rs 39,329.79 crores) including Rs. 40.00 crores (2017 : Rs. 58.12 crores) in respect of write-down of inventory to net realisable value and has been reduced by Rs. 34.30 crores (2017 : Rs 27.11 crores) in respect of the reversal of such write downs. Reversal in provision is due to sale and/or consumption of inventory provided for in earlier years.

(b) The Company has availed working capital facilities and other non-fund based facilities viz. bank guarantees and letters of credit, some of which are secured by hypothecation of inventories.

(c) Mode of valuation of inventories is stated in note 2(h).

1. The Company has on 9th February, 2018, entered into an agreement, subject to requisite approvals, to sell 26,36,401 Equity shares of Rs. 10 each in Mahindra Sanyo Special Steel Private Limited (MSSSPL) aggregating 22% of the paid-up Equity Share Capital of MSSSPL, to Sanyo Special Steel Co. Ltd. for a consideration of Rs. 146.32 crores.

b. The Ordinary (Equity) Shares of the Company rank pari-passu in all respects including voting rights and entitlement to dividend.

c. Details of Ordinary (Equity) Shares held by shareholders holding more than 5% of the aggregate shares in the Company :

d. For the period of preceding five years as on the Balance Sheet date, Issued, Subscribed and Paid-up Share Capital includes :

i. Aggregate of 5,03,888 (2017 : 5,917) Ordinary (Equity) Shares of Rs. 5 each allotted as fully paid-up pursuant to Scheme of Arrangement without payment being received in cash.

ii. Aggregate of 62,15,96,272 (2017 : Nil) Ordinary (Equity) Shares allotted as fully paid-up by way of bonus shares.

2. Other Equity :

Description of the nature and purpose of Other Equity :

Capital Reserve : Capital Reserve mainly represents the amount of net assets acquired over and above consideration paid consequent to the Scheme of Arrangement (refer note 40).

Securities Premium Account : The Securities Premium is created on issue of shares.

General Reserve : The General Reserve comprises of transfer of profits from retained earnings for appropriation purposes. The reserve can be distributed/utilized by the Company in accordance with the Companies Act, 2013.

Debenture Redemption Reserve : Debenture Redemption Reserve is a Statutory Reserve (as per Companies Act, 2013) created out of profits of the Company available for payment of dividend for the purpose of redemption of Debentures issued by the Company. On completion of redemption, the reserve is transferred to retained earnings.

Employee Stock Options Reserve : The Employee Stock Options Reserve represents reserve in respect of equity settled share options granted to the Company's employees in pursuance of the Employee Stock Option Plan.

(b) Term loan from banks comprise of EURO External Commercial Borrowings carrying an average margin of 95 basis points over three month EURO LIBOR and are repayable after five years and one day from the date of respective a ailment of loan.

(c) Other loans comprise deferred sales tax loans which are interest free and repayable in five equal installments after ten years from the year of a ailment of respective loan.

Other liabilities include salaries and wages payable, capital creditors, brand licenses payable and monies adjusted from share capital and reserves & surplus on account of shares held by ESOP Trust pending transfer to the eligible employees.

Provision for warranty relates to provision made in respect of sale of certain products, the estimated cost of which is accrued at the time of sale. The products are generally covered under a free warranty period ranging from 6 months to 5 years.

The movement in provision for warranty and service coupon is as follows :

(b) Expenditure incurred on Corporate Social Responsibility (CSR) under Section 135 of the Companies Act, 2013 Rs. 81.97 crores (2017 : Rs. 83.57 crores).

(c) Donations given to New Democratic Electoral Trust Rs. Nil (2017 : Rs. 6.03 crores).

(d) The foreign exchange loss recognized in profit or loss is Rs. 14.86 crores. (2017 : gain of Rs. 13.14 crores).

3. Exceptional Items (net) recognized in profit or loss

Exceptional items of Rs. 433.61 crores (2017 : Rs. 548.46 crores) comprise of :

a) profit on sale of certain long term investments Rs. 406.61 crores (2017 : Rs. 679.46 crores).

b) profit on transfer of agri business Rs. Nil (2017 : Rs. 91.00 crores).

c) During the year ended 31st March, 2018, the Company has recognized reversal of impairment loss on an investment Rs. 27.00 crores. During the year ended 31st March, 2017, the Company had recognized an aggregate impairment loss of Rs. 222.00 crores on certain investments in subsidiaries and joint ventures considering the performance of these companies and their future projections.

During the year, the Company allotted 62,15,96,272 Ordinary (Equity) Shares of Rs. 5 each as fully paid-up Bonus (Equity) Shares in the ratio of 1:1 [i.e. 1 (One) fully paid-up Bonus Ordinary (Equity) Share of Rs. 5 each for every 1 (One) fully paid-up Ordinary (Equity) Share of Rs. 5 each held] to all registered shareholders as on the record date. Consequently, in accordance with Ind AS 33 "Earnings per Share", the basic and diluted earnings per share for the previous year have been adjusted to give effect to the aforesaid issue of Bonus Shares.

4. Employee Benefits

General description of defined benefit plans :

Gratuity

The Company operates a gratuity plan covering qualifying employees. The benefit payable is the greater of the amount calculated as per the Payment of Gratuity Act or the Company scheme applicable to the employee. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation of India through its Gratuity Trust Fund.

Post retirement medical

The Company provides post retirement medical cover to select grade of employees to cover the retiring employees and their spouse up to a specified age through medic aim policy on which the premiums are paid by the Company. The eligibility of the employee for the benefit as well as the amount of medical cover purchased is determined by the grade of the employee at the time of retirement.

Post retirement housing allowance

The Company operates a post retirement benefit scheme for a certain grade of employees in which a monthly allowance determined on the basis of the last drawn basic salary at the time of retirement, is paid to the retiring employee in lieu of housing.

Through its defined benefit plans the Company is exposed to a number of risks, the most significant of which are detailed below:

Asset Volatility

The plan liabilities are calculated using a discount rate set with references to government bond yields; if plan assets underperform compared to this yield, this will create or increase a deficit. The defined benefit plans may hold equity type assets, which may carry volatility and associated risk.

Changes in bond yields

A decrease in government bond yields will increase plan liabilities, although this is expected to be partially offset by an increase in the value of the plan's investment in debt instruments.

Inflation risk

The present value of some of the defined benefit plan obligations are calculated with reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan's liability. The post retirement medical benefit obligation is sensitive to medical inflation and accordingly, an increase in medical inflation rate would increase the plan's liability.

Life expectancy

The present value of defined benefit plan obligation is calculated by reference to the best estimate of the mortality of plan participants, both during and after the employment. An increase in the life expectancy of the plan participants will increase the plan's liability.

The plan assets have been primarily invested in government securities and corporate bonds.

The Company's contribution to Provident Fund and Superannuation fund aggregating Rs. 134.66 crores (2017 : Rs. 128.30 crores) has been recognized in Profit or Loss under the head Employee Benefits Expense.

5. The Company has allotted 55,24,219 Ordinary (Equity) Shares of Rs. 10 each, 10,00,000 Ordinary (Equity) Shares of Rs. 10 each, 1,73,53,034 Ordinary (Equity) Shares of Rs. 5 each, 19,11,628 Ordinary (Equity) Shares of Rs. 5 each and 52,00,000 Ordinary (Equity) Shares of Rs. 5 each in the years ended 31st March, 2002, 31st March, 2010, 31st March, 2011, 31st March, 2014 and 31st March, 2015 respectively to the Mahindra & Mahindra Employees' Stock Option Trust set up by the Company. The trust holds these shares for the benefit of the employees and issues them to the eligible employees as per the recommendation of the Compensation Committee.

Options granted under Mahindra & Mahindra Limited Employees Stock Option Scheme - 2000 ("2000 Scheme") vest in 4 equal installments on the expiry of 12 Months, 24 Months, 36 Months and 48 Months from the date of grant. The options may be exercised on any day over a period of five years from the date of vesting. Number of vested options exercisable is subject to a minimum of 50 or number of options vested whichever is lower.

Options granted under Mahindra & Mahindra Limited Employees Stock Option Scheme - 2010 ("2010 Scheme") vest in

i) 5 equal installments on the expiry of 12 Months, 24 Months, 36 Months, 48 Months and 60 Months from the date of grant. OR

ii) 4 instilments bifurcated as 20% on the expiry of 18 months, 20% on the expiry of 30 months, 30% on the expiry of 42 months and 30% on the expiry of 54 months. after adjusting for reversals on account of options forfeited. The amount excludes Rs. 4.65 crores (2017 : Rs. 8.46 crores) charged to its subsidiaries for options issued to their employees.

6. Capital management

The Company's capital management strategy is to effectively determine, raise and deploy capital so as to create value for its shareholders. The same is done through a mix of either equity and/or preference and/or convertible and/or combination of short term/long term debt as may be appropriate.

The Company determines the amount of capital required on the basis of its products, capital expenditure, operations and strategic investment plans. The same is funded through a combination of capital sources be it either equity and/or preference and/or convertible and/ or combination of short term/long term debt as may be appropriate.

7. Financial Risk Management Framework

I n the course of its business, the Company is exposed to certain financial risks namely credit risk, interest risk, currency risk & liquidity risk. The Company's primary focus is to achieve better predictability of financial markets and seek to minimize potential adverse effects on its financial performance.

The financial risks are managed in accordance with the Company's risk management policy which has been approved by its Board of Directors. Market Risk

Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates etc. could affect the Company's income or the value of its holdings of financial instruments including cash flow. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while maximizing the return.

Currency Risk

The Company's exposure to currency risk relates primarily to the Company's operating activities including anticipated sales, purchases and borrowings where the transactions are denominated in a currency other than the Company's functional currency.

The Company's foreign currency exposures are managed in accordance with its Foreign Exchange Risk Management Policy which has been approved by its Board of Directors. The Company hedges its foreign currency risk mainly by way of Forward Covers. Other derivative instruments may be used if deemed appropriate.

b) Interest Rate Risk

The Company uses a mix of cash and borrowings to manage the liquidity and fund requirements of its day-to-day operations. Further, certain interest bearing liabilities carry variable interest rates.

Interest Rate risk on variable rate borrowings is managed by way of interest rate swaps.

Hedge Accounting : Interest Rate Swaps

Interest Rate Swaps entered into by the Company meet the requirements for hedge accounting under Ind AS 109 - Financial Instruments, and thus are accounted as such.

d) Credit Risk Management

Credit Risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company's exposure are continuously monitored.

e) Financial Guarantees

I n addition, the Company is exposed to credit risk in relation to financial guarantees given to banks provided by the Company. The Company's maximum exposure in this respect is the maximum amount the Company could have to pay if the guarantee is called on. However, financial guarantees are accounted as explained in note 2 (k).

f) Trade Receivables

The Company applies the simplified approach to providing for expected credit losses prescribed by Ind AS 109, which permits the use of the lifetime expected loss provision for all trade receivables. The Company has computed expected credit losses based on a provision matrix which uses historical credit loss experience of the Company. Forward-looking information (including macroeconomic information) has been incorporated into the determination of expected credit losses. The Company has taken dealer deposits, bank guarantees etc. which are considered as collateral and these are considered in determination of expected credit losses, where applicable.

g) The Company's maximum exposure to credit risk in respect of Financial Guarantee contracts are disclosed in note 35 (h).

I n respect of other financial assets, the maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of financial assets.

h) Liquidity Risk Management Maturity profile of financial liabilities

The following tables detail the Company's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows.

The amounts included above for financial guarantee contracts are the maximum amounts the Company could be forced to settle under the arrangement for the full guaranteed amount if that amount is claimed by the counterparty to the guarantee. Based on expectations at the end of the reporting period, the Company considers that it is more likely than not that such an amount will not be payable under the arrangement.

The following table details the Company's liquidity analysis for its derivative financial instruments. When the amount payable or receivable is not fixed, the amount disclosed has been determined by reference to the projected interest rates as illustrated by the yield curves at the end of the reporting period.

I f the change in rates decline by a similar percentage, there will be opposite impact of similar amount on Profit Before Tax and Pre-tax Equity.

The sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

Interest Rate sensitivity

The sensitivity analysis below have been determined based on exposure to interest rate for both derivative and non-derivative instruments at the end of reporting period. For floating rate liabilities, analysis is prepared assuming the amount of liability outstanding at the end of the reporting period was outstanding for the whole year.

I f the change in rates decline by a similar percentage, there will be opposite impact of similar amount on Profit Before Tax and Pre-tax Equity.

j) Offsetting of balances

The Company has not offset financial assets and financial liabilities.

k) Collaterals

The Company has availed working capital facilities and other non-fund based facilities viz. bank guarantees and letters of credit, which are secured by hypothecation of book debts, receivables, outstanding monies and all other current assets.

Except for the above, carrying value of Other financial assets/liabilities represent reasonable estimate of fair value. There were no transfers between Level 1 and Level 2 during the year.

36. Related Party Disclosures

(a)

Related parties where control exists : Subsidiaries :

Sl. No.

Name of the Company

Sl. No.

Name of the Company

1

2 x 2 Logistics Private Limited (w.e.f. 10th November, 2017)

48

Infinity Hospitality Group Company Limited

2

Anthurium Developers Limited

49

Ki

nteisto Oy Himoksen Tahti 2

3

Arabian Dreams Hotel Apartments LLC

50

Ki

nteisto Oy Himos Gardens

4

Are Villa 3 AB (w.e.f. 26th January, 2018) (Formerly known as

51

Ki

nteisto Oy Katinnurkka

Visionsbolaget 12191 AB)

52

Ki

nteisto Oy Kuusamon Pulkkajarvi 1

5

Are Villa 4 AB (w.e.f. 26th January, 2018) (Formerly known as

53

Ki

nteisto Oy Kylpylantorni 1

Visionsbolaget 12192 AB) (Upto 8th March, 2018)

54

Ki

nteisto Oy Mallosniemi

6

Are Villas 1 AB

55

Ki

nteisto Oy Rauhan Liikekiinteistot 1

7

Are Villas 2 AB

Astra Solren Private Limited

56

Ki

nteisto Oy Rauhan Ranta 1

8

Auto Digitech Private Limited

57

Ki

nteisto Oy Rauhan Ranta 2

9

Bristlecone (Malaysia) Sdn. Bhd.

58

Ki

nteisto Oy Spa Lofts 2

10

11

Bristlecone (Singapore) Pte. Limited

59

Ki

nteisto Oy Spa Lofts 3

12

Bristlecone Consulting Limited

60

Ki

nteisto Oy Tenetinlahti

13

Bristlecone GmbH

61

Ki

nteisto Oy Tiurunniemi

14

Bristlecone Inc.

62

Ki

nteisto Oy Vanha Ykkostii

15

Bristlecone India Limited

63

Kismat Developers Private Limited (Upto 28th December, 2017)

16

Bristlecone International AG

64

Knowledge Township Limited

17

Bristlecone Limited

65

Kota Farm Services Limited

18

Bristlecone Middle East DMCC

66

Lords Freight (India) Private Limited (w.e.f. 10th November, 2017)

19

Bristlecone UK Limited

67

M&M Benefit Trust

20

BSA Company Limited (Upto 30th June, 2017)

68

Mahindra & Mahindra ESOP Trust

21

Classic Legends Private Limited (Upto 30th June, 2017)

69

Mahindra Consulting Engineers Limited ESOP Trust

22

Cleansolar Renewable Energy Private Limited

70

MachinePulse Tech Private Limited

23

Covington S.a.r.l.

71

Mahindra & Mahindra Contech Limited

24

Daiya Computer Services Co., Ltd.

72

Mahindra & Mahindra Financial Services Limited

25

Daiya Kikou Co., Ltd. (Upto 27th October, 2017)

73

Mahindra Agri Solutions Limited

26

Deep Mangal Developers Private Limited

74

Mahindra Airways Limited

27

Defence Land Systems India Limited (Upto 18th October, 2017)

75

Mahindra and Mahindra South Africa (Proprietary) Limited

28

Divine Solren Private Limited

76

Mahindra Asset Management Company Private Limited

29

EPC Industrie Limited

77

Mahindra Auto Steel Private Limited

30

Erkunt Sanayi A.S. (w.e.f. 1st December, 2017)

78

Mahindra Automobile Distributor Private Limited

31

Erkunt Traktor Sanayii A.S. (w.e.f. 1st December, 2017)

79

Mahindra Automotive Australia Pty. Limited

32

Gables Promoters Private Limited

80

Mahindra Automotive North America Inc. (w.e.f. 25th April, 2017)

33

Gateway Housing Company Limited (Upto 27th February, 2018)

81

Mahindra Construction Company Limited

34

Gromax Agri Equipment Limited (Formerly known as Mahindra Gujarat Tractor Limited)

82

Mahindra Consulting Engineers Limited

35

HCR Management Oy

83

Mahindra Defence Naval Systems Limited (Formerly known as Mahindra Defence Naval Systems Private Limited)

36

Heritage Bird (M) Sdn. Bhd.

84

Mahindra Defence Systems Limited

37

Hisarlar ithalat ihracat Pazarlama Anonim §irketi

38

Hisarlar Makina Sanayi ve Ticaret Anonim §irketi

85

Mahindra do Brasil Industrial Ltda.

39

Holiday Club Canarias Investments S.L.U.

86

Mahindra 'Electoral Trust' Company

40

Holiday Club Canarias Resort Management S.L.U.

87

Mahindra Electric Mobility Limited

41

Holiday Club Canarias Sales & Marketing S.L.U.

88

Mahindra Electrical Steel Private Limited

42

Holiday Club Resorts Oy

89

Mahindra eMarket Limited

43

Holiday Club Resorts Rus LLC

90

Mahindra Emirates Vehicle Armouring FZ-LLC

44

Holiday Club Sport and Spahotels AB

(w.e.f. 15th October, 2017)

45

Holiday Club Sweden Ab

91

Mahindra Engineering and Chemical Products Limited

46

Industrial Cluster Private Limited (Upto 17th September, 2017)

92

Mahindra Europe S.r.l.

47

Industrial Township (Maharashtra) Limited

93

Mahindra First Choice Wheels Limited ESOP Trust

36. Related Party Disclosures (contd.)

Sl. No.

Name of the Company

Sl. No.

Name of the Company

94

Mahindra First Choice Services Limited

142

Mega Suryaurja Private Limited (Formerly known as Mahindra

95

Mahindra First Choice Wheels Limited

Suryaurja Private Limited)

96

Mahindra Fresh Fruits Distribution Holding Company (Europe)

143

MH Boutique Hospitality Limited

B.V. (w.e.f. 17th November, 2017)

144

MHR Holdings (Mauritius) Limited

97

Mahindra Graphic Research Design S.r.l.

145

Mahindra Holidays & Resorts India Limited ESOP Trust

98

Mahindra Greenyard Private Limited

146

Mitsubishi Mahindra Agricultural Machinery Co., Ltd.

99

Mahindra Heavy Engines Limited

147

Mitsubishi Noki Hanbai Co., Ltd.

100

Mahindra Holdings Limited

148

Mahindra & Mahindra Financial Services Limited ESOP Trust

101

Mahindra Holidays & Resorts India Limited

149

Moonshine Construction Private Limited

102

Mahindra Hotels and Residences India Limited

150

Mumbai Mantra Media Limited

103

Mahindra HZPC Private Limited

151

NBS International Limited

104

Mahindra Infrastructure Developers Limited

152

Neo Solren Private Limited

105

Mahindra Insurance Brokers Limited

153

OFD Holding B.V.

106

Mahindra Integrated Business Solutions Private Limited

154

Officemartindia.com Limited

107

Mahindra Integrated Township Limited

108

Mahindra International UK Limited

155

Origin Direct Asia (Shanghai) Trading Company Limited

109

Mahindra Intertrade Limited

156

Origin Direct Asia Ltd.

110

Mahindra Lifespace Developers Limited

157

Origin Fruit Direct B.V.

111

Mahindra Logistics Limited (w.e.f. 10th November, 2017)

158

Origin Fruit Services South America SpA

112

Mahindra Marine Private Limited

159

Orizonte Business Solutions Limited

113

Mahindra Mexico, S. de. R. L.

160

Ownership Services Sweden Ab

114

Mahindra MiddleEast Electrical Steel Service Centre (FZC)

161

Peugeot Motocycles Deutschland GmbH

115

Mahindra MSTC Recycling Private Limited

162

Peugeot Motocycles Italia S.p.A.

116

Mahindra Namaste Limited

163

Peugeot Motocycles S.A.S.

117

Mahindra North American Technical Center, Inc.

164

Raigad Industrial & Business Park Limited

118

Mahindra Overseas Investment Company (Mauritius) Limited

(Upto 28th December, 2017)

119

Mahindra Racing S.p.A.

165

Rathna Bhoomi Enterprises Private Limited

120

Mahindra Racing UK Limited

166

Retail Initiative Holdings Limited

121

Mahindra Renewables Private Limited

167

Ryono Asset Management Co., Ltd.

122

Mahindra Residential Developers Limited

168

Ryono Engineering Co., Ltd.

123

Mahindra Retail Private Limited

169

Ryono Factory Co., Ltd.

124

Mahindra Rural Housing Finance Limited

170

Ssangyong European Parts Center B.V.

125

Mahindra Steel Service Centre Limited

171

Ssangyong Motor (Shanghai) Company Limited

126

Mahindra Susten Private Limited

172

Ssangyong Motor Company

127

Mahindra Telecom Energy Management Services Limited

173

ST-42-Jupiter Trust A Jan 13-Axis/ITSL (Upto 26th May, 2017)

(w.e.f 25th June, 2017)

174

ST-43-MM TRUST MAR 13 I-IDBI/ITSL (Upto 29th May, 2017)

128

Mahindra Telecommunications Investment Private Limited

175

ST-44-MM TRUST MAR 13 II-Citi/ITSL (Upto 29th May, 2017)

(Upto 27th February, 2018)

176

ST-46-MM TRUST MAR 13 IV-HDFC/ITSL (Upto 29th May, 2017)

129

Mahindra Tractor Assembly Inc.

177

ST-47-MM TRUST MARCH 14 I-IDBI/ITSL (Upto 29th May, 2017)

130

Mahindra Trucks and Buses Limited

Mahindra Trustee Company Private Limited

178

ST-48-MM TRUST MARCH 14 II-YES/ITSL (Upto 26th May, 2017)

131

Mahindra Two Wheelers Europe Holdings S.a.r.l.

179

ST-49-MM TRUST MARCH 14 III-HDFC/ITSL (Upto 29th May, 2017)

132

133

Mahindra Two Wheelers Limited

180

ST-51-MM TRUST SEPTEMBER 14 -YES/ITSL

134

Mahindra USA Inc.

181

ST-52-MM TRUST NOVEMBER 14 I-ICICI/ITSL

135

Mahindra Vehicle Manufacturers Limited

182

ST-53-MM TRUST Feb 15-ICICI/ITSL

136

Mahindra Vehicle Sales and Service Inc. (w.e.f. 6th June, 2017)

183

ST-54-MM TRUST Mar 15 I-ICICI/ITSL

137

Mahindra Water Utilities Limited

184

ST-55-MM TRUST Mar 15 II-HDFC/ITSL

138

Mahindra West Africa Limited

185

Sunrise Initiatives Trust

139

Mahindra World City (Maharashtra) Limited

186

Suomen Vapaa-aikakiinteistot Oy LKV

140

Mahindra Waste To Energy Solutions Limited (w.e.f 25th June, 2017)

187

Supermarket Capri Oy

(Formerly known as Mahindra Waste Energy Solutions Limited)

188

Topical Builders Private Limited (Upto 28th December, 2017)

141

Marvel Solren Private Limited

189

Trringo.com Limited

Note: a) Inter corporate deposits given and repaid during the year amounting to Rs. 344.55 crores (2017 : Rs. 324.24 crores) were given to Mahindra HZPC Private Limited (subsidiary), Mahindra Lifespace Developers Limited (subsidiary), Mahindra Trucks and Buses Limited (subsidiary), Trringo.com Limited (subsidiary), Orizonte Business Solutions Limited (subsidiary), Mahindra World City (Jaipur) Limited (joint venture), Kotak Mahindra Prime Limited and Kotak Mahindra Investment Limited.

b) Refer note 6 for investments.

Domestic includes sales to customers located in India and service income accrued in India.

Overseas includes sales and services rendered to customers located outside India.

Information about major customers

During the year ended 31st March, 2018 revenues from transactions with a single external customer did not amount to 10% or more of the Company's revenues from external customers.

8. Contingent Liability & Commitments :

(A) Contingent Liability :

(a) Claims against the Company not acknowledged as debts comprise of :

(i) Excise Duty, Sales Tax and Service Tax claims disputed by the Company relating to issues of applicability and classification aggregating Rs. 2,240.66 crores (2017 : Rs. 3,536.07 crores) before tax.

(ii) Other matters (excluding claims where amounts are not ascertainable) : Rs. 27.38 crores (2017 : Rs. 28.79 crores) before tax.

(b) Taxation matters:

(i) Demands against the Company not acknowledged as debts and not provided for, in respect of which the Company is in appeal and exclusive of the effect of similar matters in respect of assessments remaining to be completed.

— Income-tax : Rs. 904.43 crores (2017 : Rs. 627.66 crores).

(ii) Items in respect of which the Company has succeeded in appeal, but the Income-tax Department is pursuing/likely to pursue in appeal/reference and exclusive of the effect of similar matters in respect of assessments remaining to be completed :

— Income-tax matters : Rs. 64.17 crores (2017 : Rs. 110.78 crores).

(c) The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) by its order dated 7th December, 2009 has rejected the Company's appeal against the order dated 30th March, 2005 passed by the Commissioner of Central Excise (Adjudication), Navi Mumbai confirming the demand made on the Company for payment of differential excise duty (including penalty) of Rs. 304.10 crores in connection with the classification of Company's Commander range of vehicles, during the years 1991 to 1996. Whilst the Company had classified the Commander range of vehicles as 10-seater attracting a lower rate of excise duty, the Commissioner of Central Excise (Adjudication), Navi Mumbai, has held that these vehicles could not be classified as 10-seater as they did not fulfil the requirement of 10-seater vehicles, as provided under the Motor Vehicles Act, 1988 (MVA) read with Maharashtra Motor Vehicles Rules, 1989 (MMVR) and as such attracted a higher rate of excise duty. The Company has challenged the CESTAT order in the Supreme Court.

I n earlier collateral proceedings on this issue, the CESTAT had, by an order dated 19th July, 2005 settled the controversy in the Company's favour. The CESTAT had accepted the Company's submission that MVA and MMVR could not be referred to for determining the classification for the purpose of levy of excise duty and rejected the Department's appeal against the order of the Collector, Central Excise classifying the Commander range of vehicles as 10-seater. The Department had challenged the CESTAT order in the Supreme Court.

Without prejudice to the grounds raised in this appeal, the Company has paid an amount of Rs. 40.00 crores in January, 2010. The Supreme Court has admitted the Company's appeal and has stayed the recovery of the balance amount till further orders.

Both these orders of the Tribunals were heard and disposed off by the Honorable Supreme Court, in August 2014. Since contrary views were expressed by the Tribunals in two parallel proceedings, the Honorable Supreme Court directed that a larger bench of the Tribunal be constituted to hear the appeals without expressing any opinion on the issues.

The Larger Bench of the CESTAT heard the matter in February, 2015 and by an order dated 27th February, 2015, remanded the matter to the Commissioner of Central Excise for consideration of the case afresh keeping all issues open. The matter is presently pending before the Honorable Commissioner. The Company strongly believes, based on legal advice it has received, that it has a good case on merits and would eventually succeed in the matter. As regards Commander case the matter is still pending adjudication before the Commissioner. However, pending the final outcome, basis the earlier adjudication order, the Company has reflected the above amount aggregating Rs. 304.10 crores ( duty penalty) and the interest of Rs. 390.72 crores accrued on the same upto 31st March, 2018, under note (a)(i) above.

I n another case relating to Armada range of vehicles manufactured during the years 1992 to 1996, by the Company at its Nashik facility, the Commissioner of Central Excise, Nashik passed an order dated 20th March, 2006 confirming a demand of Rs. 24.75 crores, on the same grounds as adopted for Commander range of vehicles. This matter was heard by the Honorable Tribunal at Mumbai, which was pleased to allow the Company's appeal.

(d) I n respect of (a) & (b) above, it is not practicable for the Company to estimate the closure of these issues and the consequential timings of cash flows, if any.

(B) Commitments :

The estimated amount of contracts remaining to be executed on capital account and not provided for as at 31st March, 2018 is Rs. 888.09 crores (2017 : Rs. 965.43 crores) and other commitment as at 31st March, 2018 is Rs. 7.50 crores (2017 : Rs. 7.50 crores).

9. Research and Development expenditure

(a) In recognized Research and Development units :

(i) Expensed to Profit or Loss, including certain expenditure based on allocations made by the Company, aggregate Rs. 822.00 crores (2017 : Rs. 804.56 crores) [excluding depreciation and amortization of Rs. 564.24 crores (2017 : Rs. 474.88 crores)].

(ii) Development expenditure incurred during the year Rs. 830.39 crores (2017 : Rs. 716.42 crores).

(iii) Capitalization of assets Rs. 163.97 crores (2017 : Rs. 120.12 crores).

(b) In other units :

(i) Expensed to Profit or Loss, including certain expenditure based on allocations made by the Company, aggregate Rs. 75.05 crores (2017 : Rs. 84.12 crores) [excluding depreciation and amortization of Rs. 25.88 crores (2017 : Rs. 29.33 crores)].

(ii) Development expenditure incurred during the year Rs. 154.64 crores (2017 : Rs. 101.88 crores).

(iii) Capitalization of assets Rs. 9.34 crores (2017 : Rs. 29.97 crores).

10. The Scheme of Arrangement ('The Scheme') for merger of Two Wheeler business of the Company's subsidiary, Mahindra Two Wheelers Limited (MTWL), with the Company has been approved by the Mumbai Bench of National Company Law Tribunal and on completion of the required formalities on 25th October, 2017, the Scheme has become effective from appointed date i.e., 1st October, 2016. The merger has been accounted under the 'pooling of interests' method in accordance with Appendix C of Ind AS 103 'Business Combinations' and comparatives have been restated for merger from the beginning of the previous year i.e. 1st April, 2016. Further, in terms of the Scheme, 5,03,888 Ordinary (Equity) shares (pre-bonus) of Rs. 5 each of the Company have been issued and allotted as fully paid up to the minority shareholders of MTWL in the ratio of 1 (One) Ordinary (Equity) Share of Rs. 5 each fully paid-up in the capital of the Company for every 461 (Four Hundred and Sixty One) fully paid-up Equity Shares held in MTWL. Consequently, an amount of Rs. 335.87 crores representing difference between the consideration issued and value of net identifiable assets acquired has been transferred to Capital Reserve.

11. Previous year's figures have been regrouped/reclassified wherever necessary.