Directors Report of Mahindra & Mahindra Ltd.

Mar 31, 2025

Your Directors are pLeased to present their Thirty-Fifth Report together with the audited financial, statements of your Company for the FinanciaL Year ended 31^st March 2025 ("FY2025”).

Financial Summary and Operational Highlights

 

(' in crore)
Particulars	Consolidated		%	Standalone		%
	FY2025	FY2024	Change	FY2025	FY2024	Change
Total Income	18,530.46	15,970.32	16.03	16,074.69	13,562.42	18.52
Less: Finance Costs	8,415.43	6,959.20	Â	7,898.30	6,426.94	Â
Expenditure	6,832.14	6,204.20	Â	4,755.70	4,551.30	Â
Depreciation, Amortization and Impairment	321.21	274.85	Â	273.42	228.71	Â
Total Expenses	15,568.78	13,438.25	15.85	12.927.42	11,206.95	15.35
Profit before exceptional items and taxes	2,961.68	2,532.07	Â	3,147.27	2,355.47	Â
Share of profit of Associates & Joint Ventures	65.23	56.11	Â	-	Â	-
ExceptionaL items	-	-	-	-	-	-
Profit Before Tax	3,026.91	2,588.18	16.95	3,147.27	2,355.47	33.62
Less: Provision For Tax	Â			Â
Current Tax	820.93	716.10	Â	779.45	664.93	Â
Deferred Tax	(54.89)	(70.97)	Â	22.78	(69.08)	Â
Profit After Tax	2,260.87	1,943.05	16.36	2,345.04	1,759.62	33.27
Less: Profit for the year attributabLe to NoncontroLLing interests	(1)	10.36	Â	-	Â	-
Profit attributable to owners of the Company	2,261.87	1,932.69	17.03	2,345.04	1,759.62	33.27
BaLance of profit brought forward from earLier years	8,364.29	7,417.35	Â	7037.93	6,376.60	Â
Add: Other Comprehensive income /(Loss)	(5.71)	(6.71)	Â	(7.49)	(4.97)	Â
BaLance avaiLabLe for appropriation	10,620.45	9,343.33	Â	9,375.48	8,131.25	Â
Less: Appropriations	Â			Â
Dividend paid on Equity Shares	777.78	740.23	Â	778.38	741.32	Â
Transfer to Statutory Reserves	469.13	352.94	Â	469.00	352.00	Â
Add/Less: Other Adjustments:	Â			Â
Changes in Group's Interest	(0.65)	114.13	Â	-
BaLance carried forward to baLance sheet	9,372.89	8,364.29	Â	8,128.10	7,037.93	15.49
Net worth	21,529.46	19,933.25	8.01	19,812.23	18,157.49	9.11

Consolidated Performance Highlights

¦    TotaL Income increased by 16.03% to ' 18,530.46 crore for FY2025 as compared to ' 15,970.32 crore in FY2024.

¦    Profit Before Tax ("PBT") increased by 16.95% to ' 3,026.91 crore for FY2025 as compared to ' 2,588.18 crore in FY2024.

¦    Profit After Tax ("PAT”) (Net of non-controLLing interest) increased by 17.03% to ' 2,261.87 crore for FY2025 as compared to ' 1,932.69 crore in FY2024.

Standalone Performance Highlights

¦    During the year under review, the Company has disbursed Loans of ' 57,899.69 crore as against ' 56,208.22 crore during the previous year, an increase of 3% over the same period in previous year.

¦    TotaL Income increased by 18.52% to ' 16,074.69 crore for the year ended 31^st March 2025 as compared to ' 13,562.42 crore for the previous year.

¦    PBT increased by 33.62% to ' 3,147.27 crore as compared to ' 2,355.47 crore for the previous year.

¦    PAT increased by 33.27% to ' 2,345.04 crore as compared to ' 1,759.62 crore in the previous year.

¦    The Assets Under Management ("AUM”) registered a growth of 17% and stood at ' 1,19,673.02 crore as at 31^st March 2025 as against ' 1,02,596.77 crore as at 31^st March 2024.

The Gross Stage 3 Loan assets stood at ' 4,413.94 crore as on 31^st March 2025 as compared to ' 3,490.90 crore as on 31^st March 2024. The Gross Stage 3 as a percentage to Business Assets increased to 3.7% as on 31^st March 2025 as against 3.4% as on 31^st March 2024.

During the year, the Company's asset quaLity remained within a comfortabLe range, with Gross Stage 3 sLightLy higher at 3.7% of Business assets and as targeted, the Company has been abLe to maintain the aggregate LeveL of Gross Stage 2 + Gross Stage 3 beLow 10% (actuaL at 9.1%) of business assets as on 31^st March 2025. WhiLe the credit cost for the year was at 1.3% underscoring prudent risk management. The Company continued to maintain underwriting discipLine and a proactive approach to restrict earLy-stage deLinquencies.

Material changes from the end of the financial year till the date of this report

No materiaL changes and commitments have occurred after the cLosure of the FinanciaL Year 2024-25 tiLL the date of this Report, which wouLd affect the financiaL position of your Company.

ECL and other updates

The Company estimates impairment on financiaL instruments as per Expected Credit Loss ("ECL”) approach prescribed under Ind AS 109 'FinanciaL Instruments' and in accordance with the Board approved ECL PoLicy.

In estimation of Expected Credit Loss (ECL) provisions, the Company has been using the updated ECL modeL in which muLti-factor macro-economic variabLes and product cLassification of vehicLe Loan portfoLios are buiLt-in and the Company has been updating the ECL modeL with the Latest set of data inputs at reasonabLe periodic intervaLs to capture the expected significant changes in macro-economic growth prospects and shifts in market drivers and changes in risk profiLe of customer credit exposures. During the current financiaL year, as part of annuaL refresh, aLong with updation of Latest macro-economic growth estimates and other reLevant input parameters for computation of ECL provisions for Loan portfoLios, the Company has aLso caLibrated the ECL modeL for SmaLL and Medium Enterprise (SME) portfoLio and Trade advance portfoLio. The Company had estimated the ECL provision for year ended 31^st March 2025 in accordance with the updated ECL modeL. The Company hoLds provision towards expected credit Loss as at 31^st March 2025 aggregating to ' 3,459 crore (as at 31^st March 2024: ' 3,401.59 crore).

The Company's net Stage-3 assets ratio stood at 1.84% as at 31^st March 2025 as against 1.28 % as at 31^st March 2024.

Transfer to Reserves

The Company has transferred an amount of ' 469 crore to the Statutory Reserves, in compLiance with section 45-IC of the Reserve Bank of India ("RBI”) Act, 1934. Further, the Board of your Company has decided not to transfer any amount to the GeneraL Reserve for the year under review. An amount of ' 8,128.10 crore is proposed to be retained in the Profit and Loss Account of the Company.

The Company maintains sufficient Liquidity buffer to fuLfiL its obLigations arising out of issue of debentures. The Company being an NBFC, is exempt from transferring any amount to debenture redemption reserve in respect of privateLy pLaced or pubLic issue of debentures, as per the provisions of section 71 of the Companies Act, 2013 read with RuLe 18 of the Companies (Share CapitaL and Debentures) RuLes, 2014, read with appLicabLe Ministry of Corporate Affairs circuLar. In respect of secured Listed non-convertibLe debt securities, the Company maintains 100% security cover or higher security cover as per the terms of Information Memorandum, GeneraL Information Document ("GID”), Key Information Document ("KID”), as the case may be and/or Debenture Trust Deed, sufficient to discharge the LiabiLity towards principaL amount and interest thereon.

Dividend

Considering good performance and strong cash flows, your Directors are pLeased to recommend a dividend of ' 6.50 per equity share (325%) on the face vaLue of ' 2 each, for FY2025 vis-a-vis 315% dividend in FY2024. Dividend is subject to approvaL of the Members at the ensuing AnnuaL GeneraL Meeting.

The Company has not paid any Interim Dividend during the financiaL year under review.

The dividend recommended is in accordance with the Company's Dividend Distribution PoLicy, within the ceiLing and in compLiance with the framework prescribed in RBI Master Directions (formerLy known as RBI guideLines on DecLaration of Dividend by NBFCs).

Tax on Dividend

In terms of the provisions of the Income-tax Act, 1961, the Company wiLL make payment of dividend after deduction of tax at source ("TDS”) as per the prescribed rates, to those sharehoLders whose names appear as beneficiaL owner/ member in the List of beneficiaL owners to be furnished by NationaL Securities Depository Limited/ CentraL Depository Services (India) Limited in case of shares heLd in demateriaLised form, or in the Register of Members in case of shares heLd in physicaL

 

fund distribution (through its joint venture Mahindra Manulife Investment Management Private Limited), and fixed deposit schemes. Additionally, your Company continued to penetrate into leasing and loan against property business. In FY2025, the focus has been on building cross sell engine by entering into Insurance Corporate Agency and growing its co-lending and coorigination partnerships with fintechs, NBFCs, Banks and MSME platforms. In addition, your Company has decided to foray into mortgage space.

In the core vehicle finance business, your Company has strengthened its capabilities by designing flexible financial products aligned with customers' cash flow patterns. It has also built heft around underwriting, risk management and has set up a fraud control unit. As a result, it has solidified its dominance in financing Mahindra's vehicles and tractors and is actively pursuing partnerships with prominent Original Equipment Manufacturers ("OEMs”) to expand its market presence. It continues to strengthen its position in the pre-owned vehicle and tractor space.

Pillars of Progress: Growth, Efficiency, and Customer-Centricity

A.    Expanding On-the-Ground Presence

As of 31^st March 2025, MMFSL's network encompasses 1,365 offices and branches across 27 States and 7 Union Territories, reinforcing its nationwide reach. This expansive infrastructure reduces reliance on any single region, mitigating risks posed by localized climatic or economic fluctuations, such as excessive rainfall or drought. Each branch serves as a hub for organic growth, leveraging local relationships to deliver a suite of financial services, including vehicle loans, SME funding, insurance solutions, and more. Centralized oversight ensures consistent asset quality, while the Company's deep penetration into rural and semi-urban markets positions it to address the evolving financial demands and ambitions of India's diverse population.

Your Company's enhanced branch structure facilitates better opportunity to cater to customers' needs and assist us in better customer servicing and improved regulatory compliance.

B.    Strengthening Digital Engagement

Your Company is deepening its reach in rural and semi-urban India through end-to-end digital loan journeys, automated credit assessments, and faster turnaround times.

The redesigned Mahindra Finance Customer App offers customers a seamless experience for EMI payments, loan management, Fixed Deposit booking, and BBPS-enabled utility payments.

 

form, as at the close of business hours on Tuesday, 15^th July 2025 (Record date for the purpose of Dividend).

Unclaimed dividend transferred to Investor Education and Protection Fund

In terms of the provisions of Sections 124 and 125 of the Companies Act, 2013 ("the Act”) read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, during the year under review, the Company has transferred an amount of ' 5,34,873.60 being the unclaimed dividend for FY 2016-17 to the Investor Education and Protection Fund ("IEPF”). The details of total, amount(s) Lying in unpaid dividend account of the Company for last seven years and due to be transferred to IEPF, is mentioned in the Report on Corporate Governance, forming part of this Annual Report.

Dividend Distribution Policy

In compliance with the provisions of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated Dividend Distribution Policy, setting out criteria and circumstances to be considered by the Board while recommending dividend to the shareholders. The Dividend Distribution Policy provides for eligibility criteria, aspects to be considered by the Board while recommending dividend, ceiling on dividend payout ratio etc., in accordance with the Master Direction -Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 dated 19^th October 2023.

As set out in Dividend Distribution Policy, the Company's dividend payout is determined based on available financial resources, investment requirements and optimal shareholder return.

Within these parameters, the Company endeavours to maintain a total dividend payout ratio in the range of 20% to 30% of the annual standalone Profit after Tax ("PAT”) of the Company.

The Dividend Distribution Policy can also be accessed on the Company's website at the web-link: https://www. mahindrafinance.com/investor-relations/policy-and-sharehoLder-information#mmfsL-poLicies .

Operations

Your Company remains dedicated to fueling the aspirations of the customers by providing financing solutions for automobiles and tractors, primarily catering to those who rely on these assets for their livelihoods and personal mobility. Beyond this core offering, your Company has broadened its scope to include preowned vehicle loans, support for small and medium enterprises (SMEs), insurance brokerage services (via its subsidiary Mahindra Insurance Brokers Limited), mutual

The app is available in 12 languages and has over 4.5 lakh+ App sign-ups since launch of revamped version in Dec 2024.

An AI-powered Chatbot launched in 2024, provides multilingual support (in 4 languages) via app and web.

Over 35 lakh+ messages have been exchanged.

UDAAN - Your Company's transformation initiative assists in elevating digital capabilities across the value chain, offering assisted journeys backed by analytics, alternate data, and fraud prevention tools, thereby leading to improved sales and operations productivity, reduced turnaround times, and enhanced financial discipline. The assisted end-to-end digital loan process, enhanced by advanced analytics, alternative data sources, account aggregators (AA), bank statement analysis (BSA), improved fraud prevention measures, credit assessments, digital KYC, e-stamping, e-sign, and e-mandates have led to significantly reduced turnaround times. Additionally, it has streamlined documentation through automation and enhanced transparency throughout the lending process, underscoring our commitment to providing innovative and customer-focused financial solutions.

Our newly launched digital collections application offers a 360-degree view of the customer, featuring a performance and activity dashboard, loan information, payment history, and additional functionalities. By leveraging automated reminders and digital payment platforms, we ensure prompt collections while minimizing operational expenses and reducing delinquencies. Additionally, employees are equipped with nudges to assist customers in navigating repayment options (UPI, QR codes, debit card, internet banking, etc.), addressing any concerns, recording minutes of meetings (MOMs), and providing customized solutions. This initiative has enhanced our portfolio's health, improved customer convenience and experience, and promoted financial discipline within an increasingly digital landscape.

C. Harnessing Technological Innovation

Your Company is leveraging AI, ML, and advanced analytics to optimize underwriting, collections, and decision-making. AI-powered scorecards now segment customers by risk, allowing for smarter approvals and reduced delinquencies. Our GenAI-powered chat interface provides senior management with instant data insights, while a Data Lakehouse enables real-time dashboards and performance tracking.

A next-gen AI collections strategy has reduced EMI bounce rates by 20-25% in early buckets, improving asset quality. AI-ML tools are also being used to enhance the pre-approved and pre-qualified loan offer base by 8x.

Cloud infrastructure has been strengthened through a multi-cloud agnostic strategy, achieving cost efficiencies, better scalability, and improved data security. We have implemented cybersecurity upgrades including DLP, XDR, SIEM, WAF, and MDM tools, along with a 24/7 Security Operations Centre and third-party Red Team assessments to safeguard critical assets.

In line with RBI's IT governance directions, we've built a centralized tech asset inventory, enhanced IT service management workflows, and established robust frameworks for business continuity, risk assessment, and IT outsourcing - reinforcing operational resilience and regulatory compliance.

D.    Data as a Strategic Edge

Your Company has built a centralized Data Lakehouse architecture, empowering real-time access to performance dashboards, KPIs, and crossfunctional business insights. This is strengthening our ability to make data-driven decisions and customize offerings across customer segments.

Advanced analytics are embedded across functions—improving lead conversion, channel productivity, and collections forecasting. These insights are also enhancing financial discipline and regulatory preparedness.

E.    Improved Insurance Coverage of MMFSL assets

Your Company received its corporate agency license from IRDAI in May 2024 and since then Company has partnered with various insurance companies for offering a comprehensive range of insurance products to meet diverse customer needs. Your Company has introduced exclusive group insurance products tailored for its existing customers. Your Company also offers retail insurance solutions in Motor, Health & Life insurance for both new and existing customers.

Your Company leverages its Pan-India branch network of 1365 branches and trained, certified personnel with a strong understanding of customer needs. Your Company has also tied-up with 10 insurance companies - 4 Life, 2 Health and 4 General Insurance companies to provide adequate choice to its customers.

This has resulted in improved insurance penetration and enhanced service delivery through an in-house cLaims team, resulting in better cLaims experience. Continuous employee training and better insurance penetration have further reinforced the model's success, positioning insurance as a strategic lever for risk management. AH these efforts led to an effective insurance coverage of your Company's assets, lives and health of customers.

The distribution network is driven by a dedicated team of employees (Specified Persons) and PoSP (Point of Sales Persons), positioned across ~1200 + locations to ensure widespread reach and seamless customer service.

Additionally, your Company also plans to expand its distribution channel by introducing digital and telemarketing platforms to serve broader customer base across India more efficiently.

F. Future Growth Enablers

MMFSL's vision is to be a leading and responsible financial solution partner of choice for emerging India. This commitment reflects a dual focus on responsible customer service and sustainable profitability, extending beyond traditional lending to a holistic suite of solutions. The emphasis on digital innovation and product diversification is central to this vision.

Your Company targets a sustainable growth trajectory and maintaining stable asset quality. Strategic efforts are focused on deepening penetration in pre-owned car, used tractor, and SME financing, tapping into untapped demand within these segments. To broaden its service offerings, MMFSL has forged new alliances for colending and co-origination. These collaborations enhance outreach, improve credit access, and offer competitive rates to underserved communities. The AUM from these partnerships have gone up significantly in the current financial year as compared to the previous financial year. The Company remains committed to refining its risk management, underwriting frameworks to sustain top-tier asset quality and strengthening its partnerships with fintechs, NBFCs, banks & MSME platforms. Moving forward, the growth strategy will be centred around leveraging digital platforms to enhance service delivery through customer acquisition, establishing strategic alliances and exclusive partnerships with fintech firms and next-generation technology distributors, strengthening

digital capabilities to ensure seamless accessibility and an optimized customer experience and utilizing digital platforms to identify cross-sell and up-sell opportunities while enhancing overall customer service.

Other Developments¦    Mortgage Business

The Board of your Company has approved expansion into Mortgage business which would include providing Housing Finance, Top-up loans, Lease rental discounting, home improvement and home extension loans, balance transfer loans, construction finance etc. Your Company intends to leverage its strong geographical presence in the retail lending space to exploit the mortgage lending opportunity for its existing customers as well as new customers. Your Company would also participate in affordable housing loan schemes of government. This expansion would leverage your Company's established presence in the financial services sector and its deep understanding of the customer needs resulting in increase in the mortgage lending opportunity to its existing customers as well as new customers.

Your Company is in the process of building its mortgage capabilities and is in investment mode with focus on recruitment, infrastructure build out, and technology setup towards building up its capabilities.

¦    Rights Issue of Equity Shares

The Board of Directors of the Company ("Board”) at their meeting held on 13^th February 2025, had inter-alia considered and approved the fund raising by way of offer and issuance of fully paid-up equity shares of the Company for an amount not exceeding ' 3,000 Crore by way of a rights issue ("Rights Issue”) to the eligible equity shareholders of the Company, to primarily maintain a strong capital adequacy ratio keeping in mind Company's growth plans to augment its Assets Under Management ("AUM"). Till the date of this report the Company has not made any public announcement and has not undertaken further action or decision in relation to the Rights Issue including setting a Record date or ratio or pricing. Necessary intimations/ announcements to the shareholders, stock exchanges etc., on the above would be made in due course.

Change in Nature of Business

There has been no change in the nature of business and operations of the Company during the year under review.

RBI Compliances

Your Company has been categorised as an NBFC- Upper Layer vide press release dated 30^th September 2022, issued by RBI. Your Company has always endeavored to maintain the highest standards of compliance within the organisation and shall continue to do so going ahead. The Company continues to comply with all the applicable laws, regulations, guidelines etc. prescribed by the RBI, from time to time including the norms pertaining to capital adequacy, non- performing assets etc.

Your Company's asset liability management is reviewed on quarterly basis by a focused Board level committee viz. Asset Liability Committee. Your Company's liquidity coverage ratio ("LCR”) was 277% as on 31^st March 2025 against the mandatory requirement of 100%.

Your Company has adopted all the mandatory applicable policies under Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 like Large Exposure Policy, Internal Capital Adequacy Assessment Policy (ICAAP), Compliance Policy etc.

Compliance Risk Assessment Framework and Compliance Testing ("CRAFT")

Your Company has also put in place Compliance Risk Assessment Framework and Compliance Testing in compliance with RBI circular dated 11^th April 2022.

Business Continuity Policy

In order to have robust framework & process for Business continuity, your Company has implemented Business Continuity Management Policy which inter-alia includes identification, monitoring, reporting, responding and managing the risks including mitigating risks of a significant / prolonged business disruption in order to protect the interests of the Company's customers, employees and stakeholders.

Your Company continues to invest in talent, systems and processes to further strengthen the control, compliance, risk management and governance standards in the organisation.

Internal Ombudsman

Your Company has appointed an Internal Ombudsman ("IO”) in compliance with the Master Direction - Reserve Bank of India (Internal Ombudsman for Regulated Entities) Directions, 2023 dated 29^th December 2023, ("Master Directions”).

In compliance with Master Directions, Mr. Alok Kumar Sharma has been appointed and is currently serving as the 'IO' of the Company, contact details of IO are available on the website and can be accessed on the website at https://www.mahindrafinance.com/customer-service/nbfc-ombudsman-scheme/contact-details

The Board of Directors at the quarterly Board meetings review number of complaints escalated to IO and status of disposal of such complaints in compliance with the said RBI circular. Report on number of complaints escalated to IO and status of disposal of such complaints is reproduced hereunder:

No of complaints outstanding at the beginning of the year	404
No of complaints received during the year	43,174
Of the complaints received, number of complaints referred to IO during the year, which were rejected by the Company	2,757
Of the complaints referred to IO how many complaints were agreed by IO	2,749
Of the complaints referred to IO how many complaints were disagreed by IO	8
Total complaints pending with IO at the end of the year	74

Macro factors and sourcing of funds:

During the year under review, Reserve Bank of India ("RBI”) focused mainly on neutral monetary policy to ensure that inflation durably aligns with the target, while supporting growth. During Q4 FY2025 with inflation on a decreasing trend and increasing global uncertainties, RBI reduced the REPO Rate by 25bps to 6.25%. Liquidity conditions remained tight with the banking sector liquidity remaining largely negative in FY2025.

Inflation in India has remained majorly below 6% (RBI upper tolerance limit) throughout the year. Consumer Price Index ("CPI”) inflation was 3.34% in March 2025. Globally, inflation showed a downward trajectory and seems to be moderating paving the way for a growth revival. However, this comes with a caution as successive shocks like the Russian-Ukraine war, Israel-Hamas-Iran conflict, significant US policy changes by new administration in 4 distinct areas viz: trade, immigration, fiscal policy and regulation which is expected lead to global uncertainty and economic slowdown. The rupee has remained under pressure throughout FY2025 against the US dollar. During Q4 FY2025, it remained volatile primarily on account of proposed US policy changes, however it recovered and ended at ' 85/$ mark.

The 10 Year G Sec curve has been following a reducing trend from around 7.1% to 6.5% during the financial year. During the year, interest cost on borrowed funds remained at 7.64% (interest cost to average borrowing) for the Company.

During the year under review, your Company continued with its diverse methods of sourcing funds incLuding borrowing through Secured and Unsecured Debentures, Term Loans, External Commercial Borrowings, Securitisation, Fixed Deposits, Commercial Papers, Inter Corporate Deposit etc., and maintained prudential Asset Liability match throughout the year. Your Company sourced long-term debentures and loans from banks and other institutions at attractive rates. Your Company continues to expand its borrowing profile by tapping new lenders and geographies.

Securitisation

During the year, your Company successfully completed Securitization/Direct Assignment transactions aggregating to ' 6,530 crore.

Non-Convertible Debentures

During the year under review, your Company raised an aggregate of ' 7,255 crore through issuance of Nonconvertible ("NCDs") debentures private placement basis as mentioned hereunder:

1.    ' 5,755 crore, raised though issuance of Secured Redeemable Non-Convertible Debentures.

2.    ' 1,500 crore raised through issuance of Unsecured Redeemable Non-Convertible Subordinated Debentures eLigibLe for Tier II CapitaL.

As specified in the respective offer documents, the funds raised from issuance of NCDs were utiLised for various financing activities, onward lending, repaying the existing indebtedness, working capital and for general corporate purposes of the Company. Details of the end-use of funds were furnished to the Audit Committee on a quarterly basis. The NCDs are listed on the debt market segment of BSE Limited. As on 31^st March 2025 there are no unlisted NCDs.

During the year, your Company has redeemed NCDs worth ' 4,645 crore and subordinated debt worth ' 215 crore on private placement basis.

Your Company is in compliance with the applicable guidelines issued by Securities and Exchange Board of India and other applicable regulators in this regard.

There has been no default in making payments of principal and interest on aLL the NCDs issued by the Company on a private pLacement basis and through pubLic issue. Further, there was no deviation/variation in use of proceeds raised from the object stated in the offer document. As on 31^st March 2025, there was no unpaid/uncLaimed interest on NCDs issued on a private pLacement basis. With respect to the three pubLic issuances of NCDs made by the Company, aggregate PrincipaL payment of ' 5,93,000 /- and Interest of ' 40,38,064 /- was uncLaimed by the investors as on 31^st March 2025. Reminders have been sent to the NCD hoLders to cLaim the same.

Commercial Paper

As on 31^st March 2025, the Company had CommerciaL Paper ("CPs”) with an outstanding amount (face vaLue) of ' 2,153 crore. CPs constituted approximateLy 2.09% of the outstanding borrowings as on 31^st March 2025. The CPs of the Company are Listed on the debt market segment of the NationaL Stock Exchange of India Limited.

Borrowings

In order to expand the business of the Company and to cater the enhanced budgeted disbursements, the Board of Directors of the Company have subject to the approvaL of the sharehoLders of the Company, approved increase in the overaLL borrowing Limit from ' 1,30,000 crore to ' 1,50,000 crore.

Credit Ratings

Your Company enjoys highest rating for its Long-term and short-term borrowing programmes from aLL the credit rating agencies that it works with. Your Company has been rated by CRISIL Ratings Limited ("CRISIL”) & India Ratings and Research Private Limited ("India Ratings”) for its NonConvertibLe Debentures program, CommerciaL Papers, Banking FaciLities & Fixed Deposits. Further, CARE Ratings Limited ("CARE”) and Brickwork Ratings India Pvt. Ltd. ("BWR”) has rated your Company for the Non-ConvertibLe Debentures program. These rating agencies have reaffirmed the highest credit rating for your Company's short-term & Long-term borrowing instruments. Your Company beLieves that its credit ratings and strong brand equity enabLes it to borrow funds at competitive rates. The details of ratings are given in the Corporate Governance Report, forming part of this AnnuaL Report.

Capital Adequacy

As on 31^st March 2025, the CapitaL to Risk Assets Ratio ("CRAR”) of your Company was 18.33% which is weLL above the minimum requirement of 15% CRAR prescribed by the Reserve Bank of India.

Out of the above, Tier I capitaL adequacy ratio stood at 15.25% and Tier II capitaL adequacy ratio stood at 3.08% respectiveLy.

Share Capital

The issued, subscribed and paid-up Equity Share CapitaL as on 31^st March 2025 was ' 247.1 crore, consisting of 123,55,29,920 Equity Shares of the face vaLue of ' 2 each, fuLLy paid-up.

There was no change in the issued, subscribed and paid-up share capitaL during the year under review.

As on 31^st March 2025, none of the Directors of the Company hoLd instruments convertibLe into equity shares of the Company. DetaiLs of Restricted Stock units ("RSUs") granted to Executive Directors are given in the Corporate Governance Report forming part of this AnnuaL Report.

Economy Global Economy

As per the InternationaL Monetary Fund, the gLobaL economy in CY 2024 navigated a compLex Landscape shaped by geopoLiticaL shifts, trade fluctuations, and inflationary trends. The EL Nino phenomenon significantLy impacted economic stabiLity, causing droughts, floods, and disruptions to marine ecosystems, affecting

agricuLture, infrastructure, and the fishing industry whiLe increasing inflationary pressures. OiL prices remained voLatiLe, initiaLLy rising due to geopoLiticaL tensions and positive macroeconomic trends but Later decLining amid bearish sentiment, economic concerns, and easing supply risks. Moreover, gLobaL trade faced disruptions as Red Sea attacks reduced Suez CanaL traffic, whiLe Panama CanaL drought-driven restrictions sLowed shipments across the worLd. GLobaL growth is expected moderate from 3.3% in 2024 to 2.8% in 2025, and projected to stabiLise at 3.0% in 2026. SuppLy chain vuLnerabiLities prompted businesses and governments to reassess trade dependencies and impLement strategic measures. Inflation is expected to ease from 5.7% in 2024 to 4.3% in 2025 and 3.6% in 2026, remained a concern, influencing cautious monetary poLicies. Rising trade tensions, incLuding new tariffs and retaLiatory actions, couLd introduce uncertainties, impacting inflation and economic momentum. However, economies are expected to Leverage innovation, sustainabiLity efforts, and poLicy interventions to maintain Long-term stabiLity in future.

Domestic Economy

India remained one of the fastest-growing major economies as strong domestic demand, structuraL reforms, and supportive poLicies drove its expansion. The country surpassed the UK to become the worLd's fifth-Largest economy, with steady growth supported by manufacturing expansion, a robust services sector, and increased infrastructure investments. Government initiatives, such as digitaL transformation and financiaL incLusion, strengthened domestic manufacturing and attracted foreign direct investment. Despite gLobaL uncertainties, geopoLiticaL tensions, and inflationary pressures sLowing growth in FY2025, the economy is expected to reach 6.5% in FY2026 as per the RBI Monetary PoLicy Report (ApriL-2025). However, with the inflationary pressures easing, the Reserve Bank of India reduced the repo rate to 6.00% in ApriL 2025. WhiLe gLobaL risks persist, India's economic outLook remains strong, reinforcing its position as a Leading gLobaL economic powerhouse.

Management Discussion and Analysis

In accordance with the appLicabLe provisions of the Master Direction- Reserve Bank of India (Non-Banking FinanciaL Company - ScaLe Based ReguLation) Directions, 2023 and the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015, a detaiLed anaLysis of the Company's performance is discussed in the Management Discussion and AnaLysis Report, which forms part of this Report.

Corporate Governance

Your Company practices a culture that is built on core values and ethical governance practices. Your Company is committed to Integrity and transparency in all its dealings and pLaces high emphasis on business ethics. The Board of your Company exercises its fiduciary responsibilities in the widest sense of term and endeavours to enhance long-term shareholder value. Company's disclosure regime is aimed at achieving best practices, gLobaLLy

A Report on Corporate Governance along with a Certificate from M/s. KSR & Co, Company Secretaries LLP, Secretarial Auditor, certifying compliance with the conditions of Corporate Governance forms part of this Report.

Ethics Framework

The Ethics & Corporate Governance framework is anchored by dearly defined policies and procedures, covering areas such as Anti-Bribery and Anti-Corruption Policy ("ABAC”), Policy on Gifts & Entertainment ("G&E"), PoLicy on Prevention of SexuaL Harassment at WorkpLace ("POSH"), WhistLe-BLower PoLicy ("WB") to ensure robust Corporate Governance.

New joiners are mandatoriLy required to undertake e-Learning moduLes on the Company's Code of Conduct ("COC"), POSH and ABAC. In addition to this, an AnnuaL CompLiance DecLaration ModuLe on COC is mandated for aLL the empLoyees.

The Code of Conduct and aLL the Company's poLicies are accessibLe on the Company's website; in the Governance section at the web-Link: https://www.mahindrafinance. com/investor-reLations/poLicy-and-sharehoLder-information#mmfsL-poLicies .

The Code of Conduct Committee and the Audit Committee ensures that the areas of Ethics & Governance framework are executed effectiveLy and the decisions on substantiated cases are taken in a fair, just and consistent manner across business.

Investor Relations

During the current year, your Company has met muLtipLe investors and anaLysts-both domestic and international These sessions were undertaken through a mix of one-on-one or group meetings. Your Company aLso participated in muLtipLe domestic conferences organised by reputed broking houses, in addition to accessing overseas investors through Non-DeaL Roadshows ("NDRs"). Having meetings in virtuaL format (through conference caLLs and video conferencing) enabLed accessing a Larger investor base.

Your Company hoLds quarterLy and annuaL earnings caLLs through structured conference caLLs and/or web-Links, detaiLs of which are made avaiLabLe to pubLic through the Company's website and stock exchange(s).

During these meetings/ earnings caLLs, the interactions are based on generaLLy avaiLabLe information accessibLe to the pubLic in a non-discriminatory manner. No unpubLished price sensitive information is shared during such meetings. Your Company beLieves in transparent communication and have been voLuntariLy discLosing criticaL information regarding Company's performance through monthLy/quarterLy updates.

Silent period

As a good governance practice, your Company voLuntariLy observes a 'SiLent / Quiet period' starting from 1^st day of the start of the month after the end of the quarter for which the financiaL results are to be announced tiLL the time of announcement of said resuLts. During this period, no meetings with investors/anaLysts/funds are heLd to discuss unpubLished financiaL performance of the Company to ensure protection of the Company's UnpubLished Price Sensitive Information ("UPSI").

Consolidated Financial Statements

The ConsoLidated FinanciaL Statements of your Company, its subsidiaries, associate/joint venture for FY2025, prepared in accordance with the reLevant provisions of the Companies Act, 2013 ("the Act") and appLicabLe Indian Accounting Standards aLong with aLL reLevant documents and the Auditors' Report form part of this AnnuaL Report.

Pursuant to the provisions of Section 136 of the Act, the StandaLone and ConsoLidated FinanciaL Statements of the Company, aLong with reLevant documents and financiaL statement of each of the subsidiaries of the Company are avaiLabLe on the website of the Company and can be accessed at the web-Link: https://www. mahindrafinanc.e.c.om/investor-relations/financ.ial-information .

Subsidiaries, Joint Venture(s) and Associate(s)

A report on the performance and financiaL position of each of the Company's subsidiaries, associate/ joint venture is incLuded in the ConsoLidated FinanciaL Statements and the saLient features of their financiaL statements and their contribution to overaLL performance of the Company as required under Section 129(3) of the Companies Act, 2013 ("the Act") read with RuLe 8(1) of the Companies (Accounts) RuLes, 2014, is provided in Form AOC-1, annexed as 'Annexure A’ to the ConsoLidated FinanciaL Statements and forms part of this AnnuaL Report.

Material Subsidiary

ReguLation 16 of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations") defines a "materiaL subsidiary" to mean a subsidiary, whose turnover or net worth exceeds ten percent of the consoLidated turnover or net worth respectiveLy, of the Listed entity and its subsidiaries in the immediateLy preceding accounting year.

Mahindra RuraL Housing Finance Limited ("MRHFL") which was a materiaL subsidiary of the Company up to year ended 31^st March 2024, did not meet the criteria for materiaL subsidiary as stated in reguLation 16(1)(c) of the Listing ReguLations for FY2025 and accordingLy MRHFL ceased to be a MateriaL subsidiary of the Company for FY2025.

Your Company does not have any MateriaL Subsidiary for the FinanciaL year ended 31^st March 2025.

Operational and performance highlights of the Company’s Subsidiary/Joint venture Companies for FY2025 are given hereunder:Mahindra Rural Housing Finance Limited

Mahindra RuraL Housing Finance Limited ("MRHFL"), the Company's subsidiary, engaged in the business of providing Loans for purchase, renovation and construction of homes to individuaLs in the Low and middLe income category of the country, registered a totaL income of ' 1,196.70 crore as compared to ' 1,294.44 crore for the previous year, decrease of 7.55 % over the previous financiaL year. Loss Before Tax stood at ' 304.58 crore as compared to profit before tax of ' 4.84 crore for the previous year. Loss After Tax stood at ' 227.94 crore as compared to profit after tax of ' 3.60 crore in the previous year. Company is making strategic efforts to drive enhanced operationaL efficiencies.

During the year under review, MRHFL disbursed Loans aggregating to ' 2,023 crore serving more than 12,600 househoLds as against ' 2,071 crore in the previous year. MRHFL is expanding its footprint in affordabLe housing.

Mahindra Insurance Brokers Limited

Mahindra Insurance Brokers Limited ("MIBL"), whoLLy owned subsidiary of the Company (effective 22^nd September 2023) is engaged in the business of Direct and Re-insurance Broking.

During the year under review, there was growth of 4.03% in Gross Premium faciLitated for the Corporate and RetaiL business Lines, increasing from ' 4,555.86 crore in FY2024 to ' 4,739.27 crore in FY2025. The TotaL Income increased by 13.21% from ' 1,094.95 crore in FY2024 to ' 1,239.59 crore in the FY2025. The Profit Before Tax decreased by 26.02% from

' 167.50 crore to ' 123.92 crore and the Profit After Tax decreased by 28.12% from ' 123.52 crore to ' 88.78 crore during the same period.

Mahindra Manulife Investment Management Private Limited

Mahindra ManuLife Investment Management Private Limited ("MMIMPL") acts as an Investment Manager for the schemes of Mahindra ManuLife MutuaL Fund ("MutuaL Fund"). As on 31^st March 2025, MMIMPL was acting as the investment manager to 24 schemes of the MutuaL Fund. The average Assets Under Management in these 24 schemes rose to ' 27,090 crore as on 31^st March 2025 as compared to ' 19,659 crore as on 31^st March 2024, deLivering a growth of 38% in assets. Of these assets, ' 24,441 crore were in equity and hybrid schemes in March 2025, as compared to ' 17,613 crore in March 2024, a growth of 38.77%. MMIMPL has empaneLed 34,439 distributors and now has 14,06,485 investor accounts in these 24 schemes.

During the year under review, the totaL income of MMIMPL was ' 87.71 crore as compared to ' 63.54 crore for the previous year. The operations for the year under consideration have resuLted in a Loss of ' 10.06 crore as against a Loss of ' 27.27 crore during the previous year. MMIMPL pLans to reduce Losses through focus on consistent fund performance, saLes strategy aimed to buiLd market share with key distributors, and prudent cost management. AdditionaLLy, MMIMPL pLans to enhance product suite by Launching 2-3 new funds during FY2026 to enabLe soLutions across the risk reward spectrum.

Mahindra Manulife Trustee Private Limited

Mahindra ManuLife Trustee Private Limited ("MMTPL") acts as the Trustee to Mahindra ManuLife MutuaL Fund ("MutuaL Fund").

During the year, MMTPL earned trusteeship fees of ' 99.14 Lakhs and other income of ' 14.62 Lakhs as compared to ' 107.03 Lakhs and ' 10.29 Lakhs, respectiveLy, for the previous year. MMTPL recorded a profit of ' 61.82 Lakhs for the year under review as compared to profit of ' 59.72 Lakhs in the previous year.

Mahindra Ideal Finance Limited (Sri Lanka)

Your Company hoLds a 58.2% stake in Mahindra IdeaL Finance Ltd (Sri Lanka) {"MIFL"] with a totaL investment of ' 77.97 crore. Leveraging Mahindra Finance's expertise of over 30 years in the financiaL services sector and the LocaL management's expertise of the domestic market, MIFL is poised to buiLd a Leading financiaL services business in Sri Lanka.

Transfer of Unclaimed amounts pertaining to Fixed Deposits to IEPF:

Pursuant to Section 125 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) RuLes, 2016 ("the IEPF RuLes") as amended from time to time, matured Deposits remaining uncLaimed for a period of seven years from the date they became due for payment are required to be transferred to the Investor Education and Protection Fund ("IEPF") estabLished by the CentraL Government. Further, interest accrued on the deposits which remain uncLaimed for a period of seven years from the date of payment are aLso required to be transferred to the IEPF under Section 125(2)(k) of the Companies Act, 2013.

The Company, during FY2025 has transferred to the IEPF an amount of ' 0.35 crore being the uncLaimed amount of matured fixed deposits and ' 0.05 crore towards uncLaimed/unpaid interest accrued on the Deposits. The concerned depositor can cLaim the Deposit and/or interest from the IEPF by foLLowing the procedure Laid down in the IEPF RuLes.

Loans and Advances

During the year under review, the Company has not given any Loans and advances in the nature of Loans to its Directors or subsidiaries or associate or to firms/ companies in which Directors are interested and no such transactions were outstanding during the year.

DiscLosure on transaction with Mahindra and Mahindra Limited (Promoter) hoLding 52.16% in the Company, as on 31^st March 2025, and other Promoter Group Companies, is provided in note no. 51 of Audited StandaLone FinanciaL Statements for year ended 31^st March 2025.

AccordingLy, the discLosure of particuLars of Loans/ advances, etc., as required to be furnished in the AnnuaL Accounts of the Company pursuant to ReguLation 34[3] and 53(1)(f) read with paragraph A of ScheduLe V of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 is not appLicabLe to the Company.

Particulars of Loans, Guarantees or Investments in Securities

Your Company, being an NBFC registered with RBI and engaged in the business of giving Loans in ordinary course of its business, is exempt from compLying with the provisions of Section 186 of the Companies Act, 2013 ("the Act") with respect to Loans.

 

With improving economic and business environment witnessed in Sri Lanka, MIFL recorded significant rebound in its business activities. The disbursement in vehicLe Lending business in FY2025 was LKR 8.8 Bn, a growth of 212% over FY2024. The Gold loan disbursements docked 20.1 Bn, an increase of 82% over FY2024.

As at 31^st March 2025, the Company's GS3 LeveL dropped to 1.86%, which is industry Leading in the context of the Sri Lankan market. The Company achieved year-round coLLection efficiency of more than 100% in FY2025.

MIFL's totaL income for the FY25 was SriLankan rupee ("LKR") 2,741 Mn vs LKR 2,309 Mn of FY2024. Profit Before Tax (PBT) in FY2025 was LKR 434 Mn, an increase of 30% over FY2024 PBT of LKR 334 Mn. and Profit After Tax (PAT) in FY2025 was LKR 146 Mn, a growth 42% over FY2024 PAT of LKR 103 Mn. MIFL continued investments in increasing its reach to grow the business. The branch network grew to 35 branches, an addition of 5 branches in FY2025, covering the Length and breadth of the country. Investments were made in IT aLso to enhance the customer and user experience.

Mahindra Finance CSR Foundation

Mahindra Finance CSR Foundation was incorporated on 2^nd ApriL 2019 as a whoLLy owned subsidiary of Company registered under Section 8 of the Companies Act, 2013 to promote and support CSR projects and activities of the Company and its group Companies.

The foundation has obtained Registration under Section 12AA and Section 80G of the Income Tax Act, 1961 and CSR Registration Number.

Joint Venture/AssociateMahindra Finance USA LLC ["MFUSA"]

MFUSA's retaiL and deaLer disbursement registered a decrease of 12.39% to USD 803.93 miLLion for the year ended 31^st March 2025 as compared to USD 917.58 miLLion for the previous year.

TotaL Income increased by 5.55% to USD 82.16 miLLion for the year ended 31^st March 2025 as compared to USD 77.84 miLLion for the previous year. Profit before tax was reLativeLy flat at USD 22.67 miLLion as compared to USD 22.86 miLLion for the previous year. Profit after tax decreased by 1.61% to USD 16.93 miLLion as compared to USD 17.21 miLLion in the previous year.

Changes in Subsidiaries, Joint Venture or Associate Companies during the year

During the year under review, there were no changes in the Company's Subsidiaries, Joint Venture/ Associate Companies.

Fixed Deposits and Loans/ Advances

Your Company offers a wide range of Fixed Deposit schemes that cater to the investment needs of various cLasses of investors. These Deposits carry attractive interest rates with superior service enabLed by robust processes and technoLogy. In order to tap ruraL and semi-urban savings, your Company continues to expand its network and make its presence feLt in the most remote areas of the country.

During the year, CRISIL and India Care Ratings Private Limited (FITCH) have reaffirmed a rating of 'CRISIL AAA/StabLe' and 'IND AAA/StabLe' respectiveLy. your Company's Fixed Deposit program which represents highest degree of safety and security of principaL as weLL as timeLy payment of interest. Your Company's Deposits continue to be a preferred investment avenue amongst the investors.

Mahindra Finance accepts deposits from both retaiL and corporate investors. During the year, your Company has mobiLized funds to the tune of ' 6,620.13 Crore from fixed deposits. The consoLidated deposit book of Mahindra Finance stood at ' 10,926.45 Crore as on 31^st March 2025, with an investor base of over 1,01,324 investors.

Digital initiatives

Your Company continues to take rapid strides in improving its digitaL footprint and enabLing an end-to-end paperLess process. Your Company has Launched Mahindra Finance Customer App enabLing customer to enjoy muLtipLe services and products from Mahindra Finance under one pLatform.

Your Company continues to serve the investors by introducing severaL customer centric measures on an ongoing basis to further strengthen its processes in sync with the requirements of the Fixed Deposit ("FD") hoLders. Your Company periodicaLLy sends various intimations via SMS, e-maiLs, post, courier etc., to its investors as weLL as sends reminder emails to cLients whose TDS is LiabLe to be deducted before any payout/accruaL. Your Company aLso provides a digitaL pLatform for onLine appLication/ renewaL of deposits, onLine generation of TDS certificates from customer/ broker portaL and seamLess investment process for its empLoyees.

Your Company has roLLed out severaL customer centric and technoLogicaL initiatives aimed at offering a superior experience to fixed deposit hoLders. Some key ones incLude:

¦    Empowering customers to on board and avaiL servicing through Mahindra Finance Customer App.

¦    Improved customer experience by introducing Digi-Locker based KYC verification to increase coverage of digitaL on boarding.

¦    Introduced partiaL renewaL of FD to reduce the hassLe of rebooking for our customers.

¦    DeveLoped and integrated UPI intent flow to reduce the chances for payment faiLures.

With respect to Fixed Deposits accepted by the Company there has been no default in repayment of principaL or interest on fixed deposit during the year under review.

Your Company being a Non-Banking FinanciaL Company the discLosures required as per RuLe 8(5)(v) and (vi) of the Companies (Accounts) RuLes, 2014 read with Sections 73 and 74 of the Companies Act, 2013, are not appLicabLe to it.

The information pursuant to CLause 35(1) of Master Direction DNBR.PD.002/03.10.119/2016-17 dated 25^th August 2016 issued by the Reserve Bank of India on Non-Banking FinanciaL Companies Acceptance of PubLic Deposits (Reserve Bank) Directions, 2016 ("NBFC ReguLations"), regarding unpaid/uncLaimed pubLic deposits as on 31^st March 2025, is furnished beLow:

i.    TotaL number of accounts of PubLic Deposits of the Company which have not been cLaimed by the depositors after the date on which the deposit became due for repayment: 3434.

ii.    TotaL amounts due under such accounts remaining uncLaimed beyond the dates referred to in cLause (i) as aforesaid: ' 3.81 crore.

Reminders are being sent to the Depositors to cLaim their uncLaimed amounts. Measures taken by the Company to reduce uncLaimed amount incLude penny drop testing, reaching out investors through SMS/ CaLLs/ EmaiL/PhysicaL Letters, assisting nominees, LegaL heir on cLaim settLement process. Company is continuousLy improving and evoLving its operationaL practices to reduce the uncLaimed amounts pertaining to Fixed Deposits.

Pursuant to the provisions of Section 186(4) of the Act, details with regard to the investments made by the Company, as appLicabLe, are given in Note no. 51 (iv) o1 the Standalone financial statements, forming part o1 this Annual Report.

Achievements

Awards/Recognitions received by your Company

during the year are enumerated hereunder:

CSR

¦    Honoured with the Best CSR Initiative & Best Financial Inclusion Initiative Award at the prestigious DNA Awards 2024.

¦    Mahindra Finance's 'Swabhimaan' initiative was honoured with the CSR Project of the Year Award 2023-24 at the India CSR Summit & Awards.

Human Resources

¦    Awarded for its 'Transformational Leadership Development Program' in the category of 'Best Learning & Development Program of the Year- NBFC/HFC/MFI' at the ETBFSI ExceLLer Awards 2024.

¦    Recognised as one of the best workplaces in the categories of 'Top rated Large Company' & 'Top rated financiaL services Company' at the AmbitionBox EmpLoyee Choice Awards 2024.

¦    Awarded "Bombay's WOW WorkpLace Award 2025” for out commitment to buiLding an inspiring, empLoyee-first workpLace.

¦    Recognised as the 'Best NBFC in TaLent & Workforce' at the 29^th Edition of Best Banks and NBFCs Awards organised by Business Today.

Marketing

¦    Awarded for content fiLm 'Main SambhaaL Lungi' in the category of Community Connect at the e4m Do Good Awards.

¦    Won the 'Location-Based Marketing Campaign of the Year' award at the e4m Indian DigitaL Marketing Awards 2024.

Sustainability

¦    Ranked 1^st at BW Business WorLd India's Most SustainabLe Companies 2024 in the FinanciaL Services and Insurance Sector.

¦    Won the GoLd Award for Education and SkiLLs DeveLopment and won the Bronze Award for EnvironmentaL SustainabiLity' at the ACEF Asian Business Leaders Awards 2024.

¦    Mahindra Finance has increased its Dow Jones SustainabiLity Index (DJSI) score to '50' becoming best-in-cLass for Listed NBFCs in India.

Employee Stock Option Scheme- 2010 and Restricted Stock Unit Plan- 2023

With a view to continue the practice of rewarding performance of the empLoyees, creating ownership culture and to retain, motivate and attract taLent in Light of growing business your Company has adopted Restricted Stock Unit PLan nameLy 'Mahindra and Mahindra FinanciaL Services Limited-Restricted Stock Unit PLan 2023' ("MMFSL RSU PLan-2023”) and Mahindra & Mahindra FinanciaL Services Limited EmpLoyees' Stock Option Scheme-2010 ("2010 Scheme”).

During the year under review, your Company granted 6,49,326 Restricted Stock Units ("RSU's”) to the eLigibLe empLoyees under MMFSL- RSU PLan 2023. No options were granted under the Mahindra & Mahindra FinanciaL Services Limited EmpLoyees' Stock Option Scheme-2010 ("2010 Scheme”).

The Company does not have any scheme to fund its empLoyees to purchase the shares of the Company.

The 2010 Scheme and the MMFSL RSU PLan - 2023 of the Company is in compLiance with the Securities and Exchange Board of India (Share Based EmpLoyee Benefits and Sweat Equity) ReguLations, 2021 ("SBEBSE ReguLations”) and there were no amendments to the aforesaid Scheme and PLan during FY2025. A Certificate from M/s. KSR & Co, Company Secretaries, LLP, SecretariaL Auditor of the Company for FY2025, certifying that the Company's above-mentioned Scheme and PLan have been impLemented in accordance with the SBEBSE ReguLations and the resoLution passed by the Members, wouLd be made avaiLabLe for inspection by the Members through eLectronic mode at the AnnuaL GeneraL Meeting ("AGM”) scheduLed to be heLd on 22^nd JuLy 2025.

The appLicabLe discLosures as stipuLated under SBEBSE ReguLations for the year ended 31^st March 2025, with regards to the 2010 Scheme, MMFSL RSU PLan 2023 and Company's stock option trust is upLoaded on the Company's website and can be accessed at the web-Link: https://www.mahindrafinance.com/investor-reLations/ financiaL-information#annuaL-reports .

In terms of reguLation 46(2)(za) of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015, the Company has upLoaded 2010 Scheme and MMFSL RSU PLan-2023 on its website and the same can be accessed at https://www.mahindrafinance.com/ investor-reLations/discLosures-under-reguLation-46-and-62-of-sebi-Lodr

Environment, Social and Governance Sustainability Vision

Mahindra Finance has estabLished its sustainabiLity mission through a board-approved sustainabiLity poLicy that buiLds on the Mahindra Rise principLes of 'Rise for a More Equal World', 'Rise to Be Future Ready' and 'Rise to Create VaLue'. The focus of FY2025 was to Lay the brickwork for Long-term initiatives aLigned to the above three principLes whiLe buiLding capacity of internaL stakehoLders to integrate sustainabiLity practices into the business operations. The priority areas for sustainabiLity integration into the business ethos was cLimate change, innovative energy transition, incLusive poLicies, and stakehoLder engagement.

Climate Change

CLimate change management at Mahindra Finance has a two-pronged approach - (1) protection of Mahindra Finance assets and offices from increased probabiLity of extreme cLimate events and (2) reduction of the carbon footprint across the vaLue chain.

1)    Mahindra Finance undertook a cLimate change scenario anaLysis for the 1350+ offices of the company to understand impact from extreme cLimate events (fLood, drought and cycLonic events) in a worst-case scenario. The resuLts of the scenario anaLysis were pubLished in the previous Integrated Report and a comprehensive cLimate action pLan was deveLoped in-house for offices in highLy prone areas. The action pLan defines processes for stabiLizing existing office structures, creating earLy warning systems for cLimate hazards, estabLishing disaster management infrastructure and integrating cLimate hazard risk in the audit checkLists for new faciLities and periodic audits.

Mahindra Finance has aLso initiated a study to map the existing vehicLe and tractor financing portfoLio with cLimate hazard prone areas. The piLot study wiLL be integrated into the FY2026 cLimate strategy to de-risk the company from increased cases of defauLt and non-performing assets due to extreme cLimate events. The piLot study wiLL then be roLLed out for other business verticaLs of Mahindra Finance.

2)    The Long-term targets for reduction of the carbon footprint across the vaLue chain was decLared through Science Based Targets Initiative (SBTi) in FY2023 and defined in the previous Integrated Report. The targets focus on a 50.4% reduction in direct emissions (Scope 1) and indirect emissions (Scope 2) as of FY2032 compared to the baseLine vaLues determined in FY2023. The targets aLso incLude a 58.1% reduction in indirect emissions (Scope 3) across the same timeLine for specific activities in the vaLue chain - purchased goods

and services, business traveL, empLoyee commute, waste generation, and purchased capitaL goods. SustainabiLity initiatives in FY2025 focused primariLy on waste reduction through 100% recycLing of waste streams and energy transition that has resuLted in a ~20% reduction of energy usage compared to FY2023 baseLine vaLues. The efforts have resuLted in a net reduction of absoLute scope emissions (scope 1-3) by 11,300+ tonnes CO₂ compared to previous year.

Innovative Energy Transition

Mahindra Finance has buiLt on the energy reduction initiatives that had been commissioned in FY2023 incLuding 100% conversion to Light emitting diodes (L.E.D.), procurement of 5* energy saving air conditioners, soLar-powered air conditioners, and instaLLation of brushLess DC motor (BLDC) fans. A piLot program for the purchase of green energy at the Mahindra Finance corporate office in KurLa, Mumbai was initiated in November 2024 with intentions to expand across other Mahindra Finance offices in Locations where the reguLatory Landscape permits the purchase of green tariffs. The above energy initiatives have contributed to reduced energy costs, reduced emissions from purchase of grid-based energy (Scope 2) and use of newer safer technoLogy in active office buiLdings.

Inclusive Policies

Mahindra Finance announced its membership to the United Nations GLobaL Compact (UNGC) in FY2024 to show its commitment to human rights, good working conditions and ethicaL practices in the workpLace. In FY2025, a Human Rights Due DiLigence (HRDD) study was commissioned to evaLuate the human rights poLicies and procedures, conduct consuLtations with empLoyees across LeveLs to determine on-ground impLementation of these procedures, review efficacy of data privacy programs and extension of the above to major suppLiers in the vaLue chain. The resuLts of the study wiLL be impLemented in FY2026 to strengthen the human rights process across the Mahindra Finance vaLue chain.

Training programs on the human rights topics was expanded to the entire workforce in FY2025 incLuding the incorporation of these topics in the empLoyee induction and refresher programs. Diversity, equity & incLusion (DE&I) programs were expanded in FY2025 to incLude impactfuL gender representation initiatives, LocaLized EmpLoyee Resource Groups (ERGs), progressive poLicies fostering workpLace equity, and focused empLoyee sensitization efforts to promote an incLusive cuLture.

Looking Forward to FY2026 on Sustainability

The focus of FY2026 is to buiLd on sustain ability initiatives that have commissioned in FY2025 and to better integrate sustainabiLity into the business operations. A dedicated sustainability department has been created in FY2025 to ensure adequate allocation of resources for the long-term sustainability vision and to increase senior management oversight on the topic. The mandate of the CSR board sub-committee has been expanded in the latter half of FY2025 to incorporate updates on the sustainability performance of the company and to approve sustainability policies and procedures. Operational committees with key departments including HR, risk and finance are being formulated in FY2026 to ensure integration of sustainability topics in day-to-day management. The process of integrating Environment, Social and Governance (ESG) risk management into the business loan cycle is being developed to align with global expectations on a sustainable investment strategy.

A big focus of the next financial year is to align with the Mahindra Rise commitment of "Making Sustainability Personal” by creating training and capacity building programs for internal and external stakeholders to better understand and integrate sustainability in business as usual. Standard Operating Procedures ('SOPs') and digital tools are being evaluated to standardize sustainability reporting methodologies and ease the process of data gathering and reporting. Training programs are being developed in parallel for department heads to understand global trends in sustainability and to be able to efficiently integrate the topic in their functional responsibilities on a day-today basis.

Social Initiatives - Diversity, Equity, and Inclusion ("DE&I")

Diversity, Equity, and Inclusion (DE&I) remain central to Mahindra Finance's vision of fostering a workplace that values and empowers every individual. In FY2025, focused efforts were made to address gender gaps, promote equity, and embed inclusive practices across the organization, with a commitment to continued progress in the years ahead.

¦ Empowering Women:

Initiatives like Prarambh provided specialized training to women from Tier III and Tier IV cities, resulting in over 150 hires in frontline roles. The SOAR Program enabled women professionals to return to impactful roles after career breaks with support enabled through carefully crafted mechanisms. Focused recruitment drives across

50+ locations introduced diverse talent into key positions across branches.

¦    Progressive Policies:

Policies such as maternity transition support, IVF reimbursement, menstrual wellness, caregiving assistance, and gig working opportunities were enhanced to create equitable opportunities and address the evolving needs of the workforce.

¦    Fostering inclusion:

Inclusion-focused programs like MWoW (Mahindra Finance World of Women) established 7 regional ERGs to address hyper-local challenges and create platforms for growth and engagement. Initiatives like Perspective Building, Spectrum'24 - Inclusion Week, which engaged over 5,000 employees, and sensitization workshops such as Beat the Bias, Leading as an Ally, drove awareness and allyship across teams.

¦    Recognition and Future focus:

Mahindra Finance was awarded the Mahindra Group Rise Award for its DE&I efforts. Participation in forums and thought leadership platforms reinforced the organization's commitment to driving systemic change and fostering inclusive growth.

Looking ahead, DE&I will continue to be a key focus area, with plans to scale initiatives, deepen impact, and build a workplace that reflects Mahindra Finance's purpose-driven approach to empowering lives and communities.

Stakeholder Engagement

A stakeholder engagement program has been defined and disclosed in the previous Integrated Reports. During FY2025, the stakeholder engagement program focused on two stakeholder groups namely, local communities and customer interface teams.

Mahindra Finance understands the importance of effectively managing the customers and provide a seamless experience. To address this the Company has undertaken strong steps in call centre management, which is now available 365 days (except national holidays) and serves 10 different languages. Your Company has also undertaken skill upgradation training programs for customer facing staffs to help address queries seamlessly. A dedicated centralised resolution team has also been created to provide bureau related concerns with less turnaround time. Through these initiatives, your Company aims to increase the customer satisfaction index and address customer queries in a shorter period of time.

Business Responsibility and Sustainability Report

Your Company continued to uphold a high standard of regulatory compliance and transparency through disclosure of sustainability initiatives in the public domain. In compliance with Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has disclosed its Business Responsibility and Sustainability Report ("BRSR”) for the previous two financial years as part of its Integrated Report ("IR”). Your Company has increasingly disclosed data on 'leadership indicators' in BRSR over the last three years and is currently reporting on all leadership parameters defined in the nine principles of 'BRSR Section C Principle Wise Performance Disclosure.'

Your Company subscribes to the Dow Jones Sustainability Index ("DJSI”) program where it has achieved a score of '50' in FY2024 that is best-in-class when compared to other listed NBFCs in India.

Governance

Your Company's sustainability team has foflowed two environmental and social (E&S) scorecard methodologies in FY2025 - risk management and outcome-based performance matrices. The E&S risk management scorecard has been integrated into the Internal Capacity Adequacy Assessment Process (ICAAP) with modules related to ESG policy, sustainability roadmap, exclusion list principles, carbon reduction, energy transition, climate transition risk management and audit scope parameters. Additionally, a business scorecard is developed for the sustainability team that focuses on scope emission reduction targets, supply chain engagement and Mahindra Group collaboration. The score from the above processes is also integrated into the CXO compensation matrix for the financial year to ensure senior management oversight on sustainability issues.

Your Company engages with the larger Mahindra Group resources through a quarterly 'Sustainability Council' where challenges and opportunities across the group are discussed and commonalities are jointly addressed. The Sustainability Council also provides an opportunity for cross-training of sustainability personnel and sharing of case studies. An independent agency within Mahindra Group - Mahindra Institute of Quality (MIQ), independently reviews the performance of Mahindra Finance sustainability policies and procedures.

Integrated Reporting

Your Company is pleased to present its holistic performance for FY2025, in the Integrated Report of the Company. This report includes details such as

the organisation's strategy, governance framework, performance and prospects of value creation based on the six capitals- Financial, Manufactured, Intellectual, Human, Social & Relationship and Natural capital.

Corporate Social Responsibility (CSR)

Established in 1991, Mahindra Finance, a leading NBFC is a proud partner of India's growth, taking financial services to the farthest corners of the country. We are continually adapting to the evolving needs of our customers, leveraging technology and our strategic partnerships to widen the ambit of and access to financial services while remaining committed to our social responsibility. Led by our #TogetherWeRise ethos, we build abiding relationships of trust with our communities and strives to become an asset in the communities where we operate. Your Company's Corporate Social Responsibility (CSR) initiatives focus on areas, namely Education & Livelihood, Healthcare and Environment. We believe in providing opportunities to the underprivileged communities to enable them to rise by designing the areas of interventions that are aligned with the Company's purpose to drive positive change in the lives of our communities. Together, we are paving the way for a brighter tomorrow for all.

1. CSR Committee

Your Company has duly constituted a CSR Committee in accordance with Section 135 of the Companies Act, 2013 to assist the Board and the Company in fulfilling the corporate social responsibility objectives of the Company. The Committee presently comprises of the following Directors as on 31^st March 2025:

Name	Category
Mr. Diwakar Gupta (Chairperson)*	Independent Director
Mr. Vijay Kumar Sharma**	Independent Director
Mr. Raul Rebello***	Managing Director & CEO

* Mr. Dhananjay Mungale ceased to be member and the Chairperson of the CSR Committee with effect from 23^rd July 2024. Mr. Diwakar Gupta was appointed as the member and the Chairperson of the Committee with effect from 24^th July 2024.

** Mrs. Rama Bijapurkar ceased to be member of the CSR Committee with effect from 23^rd July 2024. Mr. Vijay Kumar Sharma was appointed as the member of the Committee with effect from 24^th July 2024.

*** Mr. Ramesh Iyer ceased to be member of the Committee upon superannuation with effect from 29^th April 2024. Mr. Raul Rebello was inducted as the member of the Committee with effect from 30^th April 2024.

• During the year under review, 3 CSR Committee Meetings were heLd, details of which are provided in the Corporate Governance Report. The CSR Committee inter-aLia, reviews and monitors the CSR as weLL as BRSR activities. During the year under review, the terms of reference of CSR Committee were enhanced to specificaLLy include enhanced review of Environment, Social and Governance aspects ("ESG”).

2.    CSR Policy

The CSR PoLicy outLines the approach and guidance provided by the Board, basis recommendation of CSR Committee, for undertaking CSR Projects and Lays down the guiding principles for seLecting, implementing and monitoring CSR projects incLuding AnnuaL Action PLan. The PoLicy outLines CSR thrust areas, which aLign with the Mahindra group core purpose of driving positive change in the Lives of the communities. Company endeavors to create sociaL, economic and environmentaL change by investing in projects that promotes education, skiLL training, heaLth care, sanitation, environmentaL sustainabiLity, financiaL Literacy etc.

The CSR PoLicy incLuding a brief overview of the projects or programs undertaken by the Company can be accessed the same on the website of the Company at:

https: // www.mahindrafinance.com/ investor-reLations/poLicy-and-sharehoLder-information#mmfsL-poLicies

3.    CSR Initiatives

Key CSR Achievements for FY2025

(i) 'Dhan Samvaad'- CSR Flagship Program

Your Company has Launched CSR flagship program "Dhan Samvaad” which addresses a criticaL need among gig workers and nano, micro-enterprises, who often Lack access to formaL financiaL education and digitaL tooLs. By bridging this knowLedge gap, the initiative aims to foster financiaL incLusion and enhance the economic resiLience of this vitaL segment of the workforce.

The comprehensive program covers a wide range of topics, incLuding banking basics, savings strategies, e-waLLet usage, investment fundamentaLs, insurance principLes, and key government schemes. Through a combination of interactive workshops, onLine moduLes, and hands-on training, participants gained practicaL skiLLs to manage their finances effectiveLy in the digitaL era.

The program aLso focused on raising awareness as weLL as increased Linkages about reLevant centraL and state LeveL government schemes for amongst targeted beneficiaries whiLe providing information and hands-on support for using digitaL tooLs Like Digi Locker.

Dhan Samvaad is a significant effort to empower individuaLs and smaLL businesses with the financiaL knowLedge necessary for sustainabLe deveLopment. This program pLayed a cruciaL roLe in creating a more financiaLLy savvy and digitaLLy empowered community, uLtimateLy contributing to India's economic progress. Resources used during the program are aLigned with the Reserve Bank of India (RBI)'s FinanciaL IncLusion and DeveLopment program.

Major highLights of the Dhan Samvaad program incLudes,

¦    TotaL outreach - 2,07,700+ beneficiaries educated on financiaL and digitaL Literacy, boosting their digitaL and financiaL skiLLs

¦    77,800+ of the totaL outreach (37%) are Women Entrepreneurs: EnabLing Women Entrepreneurs

¦    1,57,000+ (76%) individuaLs enhanced digitaL identity by adopting the Digi Locker app.

¦    1,37,000+ (66%) individuaLs were Linked with different Government sociaL security schemes nameLy PMSBY, PMJJBY, E- Shram Card, Sukanya Samriddhi Yojna, Udyam Registration, AtaL Pension Yojana etc.

¦    Covered 40+ Districts, 7 States reaching diverse communities.

(ii) Saksham Scholarship Project

Saksham SchoLarship for underpriviLeged students is an initiative to provide financiaL assistance to underpriviLeged chiLdren to support them in continuing their education.

The project beLieves in empowering the academic and career goaLs of chiLdren by removing the financiaL barrier. The schoLarship is open for students from muLtipLe states across India. Students studying in CLasses 1 to 12, graduation, and post-graduation LeveLs are eLigibLe. In FY2025, your Company provided Saksham SchoLarship to around 2,960+ schoLars.

(iii)    E/Auto Rickshaw driving training for women

Your Company continued E/Auto Rickshaw driving training for women. Under this project, eLigibLe women were supported with skiLL training to drive an auto/ E auto/ UtiLity vehicLe and heLp them obtain LiveLihood opportunities. ALong with the vehicLe driving skiLLs, women were supported to obtain driving Licenses. SeLf-defence skiLLs, interpersonaL skiLLs and financiaL and digitaL skiLLs were aLso imparted as part of this project. Further women were encouraged to take to the jobs as chauffeurs and seLf-empLoyment.

In FY2025, your Company trained 550+ women through this project from Madhya Pradesh, TamiL Nadu and Puducherry. These women received permanent driving License aLong with LeveL 4 SkiLL India Certificate and pLacement Linkages.

(iv)    Employability skills training project

This project creates a cadre of workforce with essentiaL empLoyabiLity skiLLs incLuding domain knowLedge and soft skiLLs. Provided skiLL training to youth for BCBF (Business Correspondent & Business FaciLitator) and iTES-BPO (Information TechnoLogy EnabLed Services) and make them job ready and resiLient for the future and improve their LiveLihood.

In FY2025, your Company provided empLoyabiLity skiLLs training to 210+ candidates in Mumbai, Maharashtra aLong with pLacement Linkages to 170+ candidates.

(v)    Nanhi Kali

Project Nanhi KaLi provides skiLLs training to girLs studying in Grades 6 to 10 thereby heLping them to make a smoother transition from schooL to the workpLace.

The program focuses on honing essentiaL skiLLs, encompassing financiaL Literacy, digitaL skiLLs, soft skiLLs such as criticaL thinking and communication, and fostering an understanding of gender reLations. This wiLL be deLivered during schooL hours.

It aLso focuses on physicaL education moduLes wherein a professionaLLy designed sports education moduLe excLusiveLy for girLs gives them an opportunity to participate in reguLar fitness activities thereby promoting their weLLbeing. The program further heLps buiLd Leadership skiLLs and teamwork whiLe striving for exceLLence through sports.

Your Company supported the education of 14,630 Nanhi KaLis from Secondary schooL (CLass 6 to 10)

for the academic year 2024-25 across 12 districts from 5 states in India.

(vi)    Mahindra Pride Classroom (MPC)

Your Company continued its support to Mahindra Pride CLassroom (MPC) project to reach out to marginaLised women to create job opportunities in various sectors and enabLe women to become financiaLLy independent and participate activeLy in the workforce.

Under this program, we conducted minimum 40 hours training for 47,800+ finaL year femaLe students in cLassrooms across government/ government aided coLLeges, poLytechnics, industriaL training institutions, empLoyer premises etc. to enhance their empLoyabiLity prospects. The moduLar MPC training program focusses on Life, Language and aptitude skiLLs. To faciLitate students who have been trained in the MPC are pLaced with organizations working in their core trade/ domain an innovative, tech-enabLed job drive, known as 'Job Utsav' is conducted to bring together the best empLoyers and a great taLent pooL trained under the MPC program.

(vii)    Mahindra Pride Skill centers (MPSC)

You Company continued its support to MPSC which are specificaLLy designed to economicaLLy empower women through training in domain and empLoyabiLity skiLLs. The major trades covered are ITES, retaiL, hospitaLity, BFSI and other sectors. By addressing the unique requirements of the job market and emphasizing the deveLopment of both technicaL and soft skiLLs, the modeL aims to equip women with the knowLedge, skiLLs and confidence needed to succeed in their careers. As part of this initiative, 1,000 women were trained under IT / ITES, retaiL, coding, hospitaLity, TaLLy, IT & GST and 80% of the trained women supported in securing a gainfuL empLoyment.

(viii)    Project Hariyali

With an aim of sustainabLe environment, your Company promoted pLantation of trees which provides green cover as weLL source of LiveLihood to farmers/LocaL communities.

In FY2025, your Company pLanted 77,000 sampLings on around 570 farmer's Land from 30 viLLages in two districts in Gujarat. The pLantation incLudes a mix of native and fast-growing species Like Teak, Mahagony, Bamboo, Drumstick, AonaLa, Mango, Neem etc. which enhance carbon sequestration and improve LocaL biodiversity.

Additionally, it provides income sources for small and marginal, farmers through sustainable forestry. Further it engages communities in environmental stewardship and raises awareness about climate change.

Also, your Company supported the maintenance (nurturing and caring) and survival, of previously planted saplings in the Financial Year 2023-24 and 2022-23 as part of Project Hariyali in the Araku region, Andhra Pradesh.

(ix)    Water Conservation Project

As part of Environmental Sustainability, your Company has been championing the water conservation cause over 3 years in the remote tribal areas of Murbad and Shahapur blocks in Thane district, Maharashtra. Through these consistent efforts, over 8.7 crore litres of water have been conserved, ensuring access to water for household and agriculture purpose, enabling farmers to take multiple crops.

In FY2025, your Company made Investment in sustainable water resource management projects such as construction of 11 Rainwater Harvesting Structures in zilla parishad schools conserving over 0.46 crore Liters of water. Built/repaired 3 check dams and desilting of a Lake, creating potential to save over 2.45 crore liters of water in the surrounding areas. Through this project, we expect to consere 2.91 crore litres of rainwater for irrigation, ensuring water accessibility round the year for household and farming purpose, thus enabling farmers to take up 2-3 crops in a year and supporting 2,800 beneficiaries.

(x)    Project Sehat

In the area of healthcare, your Company organized nationwide blood donation drives in which 4,279+ Blood Units were collected, Pan India. Your Company also conducted 2 health camps, benefiting 300 individuals.

Employees Volunteering

Your Company has consistently fostered a culture of social responsibility by encouraging employees to actively participate in diverse CSR initiatives, driving meaningful change within the community. During the reporting period, over 23,250 employees—an impressive 91% of the workforce—dedicated more than 1,10,600 person-hours to numerous impactful virtual and physical CSR initiatives. These initiatives included life-saving Blood Donation drives, transformative Swachh Bharat campaigns, and empowering programs like Samantar, Sehat, and Gyandeep. Through these efforts, your

company has reaffirmed its unwavering commitment to creating a positive and lasting impact on society.

Stakeholder Engagement - In FY2025, your company organized the "Partner Meet” on 11^th February 2025, bringing together 28 representatives from 15 implementation partners for a day dedicated to collaboration, networking, and knowledge sharing. This impactful stakeholder engagement provided an invaluable opportunity to strengthen partnerships, interact with senior management, and exchange best practices among diverse implementation partners, fostering collective growth and innovation.

During the event, your Company celebrated excellence by honoring four of its partners (NGOs) with the prestigious title of "Best CSR Implementation Partners 2025,” while extending tokens of appreciation to the remaining partners, acknowledging their remarkable contributions. Furthermore, the meet featured a capacity-building workshop on "Appreciative Inquiry -A Tool for Personal and Organizational Effectiveness,” equipping attendees with transformative strategies to enhance their impact. This initiative underscores your company's unwavering commitment to driving meaningful collaboration and empowering its partners to achieve greater success in CSR implementation.

4.    CSR Spend

As per the provisions of Section 135 of the Companies Act, 2013 ("the Act”) read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules”), the mandatory CSR spend of the Company for FY2025 was ' 34.58 Crore against which your Company has spent ' 34.61 Crore during the year. Your Company has fully spent unspent CSR amount of FY 2024 towards ongoing program on Financial & Digital Literacy Project., details whereby are given in "Annexure I" of this report.

Further, in terms of the CSR Rules, the Chief Financial Officer of the Company has certified that the funds disbursed have utilised for the purpose and in the manner approved by the Board for FY2025.

5.    Annual Report on CSR Activities

The Annual Report on the CSR activities undertaken by your Company during the year under review, as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is set out in "Annexure I" of this Report.

6.    Impact Assessment of CSR Projects

In compliance with the provisions of Section 135 of the Companies Act 2013 read with sub-rule (3) of rule 8 of the Companies (Corporate Social Responsibility

Policy) Rules, 2014, impact assessment has been carried out for the following eligible projects:

CSR projects pertaining to FY2022 requiring Impact Assessment

¦    Nanhi Kali

¦    Mahindra Pride School & Classrooms

¦    Women economic empowerment

CSR projects pertaining to FY2023 requiring Impact Assessment

¦    Swabhimaan

Your Company had engaged independent agencies to carry out the impact assessment for the aforesaid projects. The Executive Summary of the Impact Assessment Reports, with respect to the abovementioned eligible CSR projects of FY2022 and FY2023, is annexed with "Annexure I" of this Report and the complete Impact Assessment Report of the applicable projects can be accessed at the web-link https://www.mahindrafinance.com/ together-we-rise#csr-reports.

Additionally, your Company has been proactively conducting an impact assessments of the selected CSR projects on a voluntary basis to evaluate the effectiveness. As a testament to its commitment to exemplary corporate governance, the Company also undertakes voluntary financial audits to ensure transparency and accountability.

The executive summary and web-links of impact assessment reports with respect to Company's CSR projects undertaken in FY2024 which meet the prescribed criteria, will be provided once the same are completed.

Cyber Security

Your Company has made significant strides in bolstering organization's cybersecurity framework to safeguard both internal and customer data. In an era where digital threats are increasingly sophisticated, we have prioritized the implementation of robust measures to ensure the integrity, confidentiality, and availability of critical information assets.

To enhance your organization's defence, we have deployed a suite of advanced cybersecurity tools tailored to address current and evolving risks. These include systems to prevent unauthorized data exfiltration, comprehensive threat detection and response mechanisms, real-time monitoring and analysis solutions, protective measures for our online assets, and solutions to secure our mobile endpoints. These tools collectively form a multi-layered shield around our digital infrastructure and processes.

In addition, your Company has established a 24/7 Security Operations Centre (SOC) dedicated to monitoring cybersecurity alerts and responding to incidents immediately to initiate remedial measures.

This ensures that potential threats are identified and mitigated swiftly, minimizing any risk to our operations or data.

Your Company has also significantly improved, organization's vulnerability management process by automating scanning and remediation efforts. By leveraging industry-leading scanning and patching tools, we have streamlined the identification and resolution of vulnerabilities, thereby enhancing our overall security posture.

To validate the effectiveness of these investments, management is also conducting Red Team assessment by an external certified entity. These proactive assessments test your organization's cyber defences under real-world conditions, ensuring that the tools and processes we have implemented deliver the expected resilience and protection.

These enhancements reflect our unwavering commitment to safeguarding the trust placed in us by our customers, partners, and you, our shareholders.

Annual Return

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with rule 11 and 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return in Form No. MGT-7, is available on the Company's website and can be accessed at the web-link https://www.mahindrafinance.com/investor-relations/financial-information#annual-reports .

Board & Its Committees Board

Your Company recognises and embraces the importance of a diverse Board in its success. The confluence of Directors on the Board with different knowledge and skills, perspective, regional and industry experience, cultural and geographical background ensures that your Company retains its competitive advantage.

As on 31^st March 2025, the Board of your Company consisted of 8 Directors comprising of a Non-Executive Chairperson, 1 Executive Director, 2 Non-Executive NonIndependent Directors and 4 Independent Directors, of whom 1 is a woman Director.

Committees constituted by the Board of Directors

The Board Committees are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

 

The details of the Board Committees aLong with their composition, powers, terms of reference, etc. are given in the Report on Corporate Governance, which forms part of this Annual Report.

Audit Committee

As on 31^st March 2025, the Audit Committee comprised of 3 Independent Directors and 1 Non-Executive NonIndependent Director:

Name	Category
Mr. Diwakar Gupta	Chairperson of the Committee (Independent Director)
Mr. MiLind Sarwate	Independent Director
Mr. Vijay Kumar Sharma	Independent Director
Mr. Amarjyoti Barua	Non-Executive Non- Independent Director

Changes in Audit Committee Members during FY2025:

¦    Mr. Dhananjay MungaLe, Mrs. Rama Bijapurkar ceased to be Member of the Committee effective 23^rd July 2024 and Mr. Chandrashekhar Bhave ceased to be Chairperson and Member(s) of the Committee effective 2^nd February 2025; upon completion of their 2^nd term as Independent Director(s) of the Company.

¦    Mr. Diwakar Gupta was appointed as Chairperson of the Committee w.e.f 3^rd February 2025.

The composition of Audit Committee is in compliance with the minimum requirement prescribed under the Act, Securities and Exchange board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended and the Master Direction - Reserve Bank of India (Non-Banking FinanciaL Company - ScaLe Based Regulation) Directions, 2023 of having a minimum of two-thirds of independent directors, incLuding the Chairperson. ALL members of the Committee are nonexecutive directors possessing financiaL Literacy, and expertise in accounting or financiaL management reLated matters.

During the year under review, 11 Audit Committee Meetings were heLd. Further, the terms of reference of the Audit Committee were enhanced during the year under review to specificaLLy incLude review of compLiances under RBI directions/ circuLars/ guideLines, review of POSH Report and its poLicy, information security audit/ poLicy etc. ALL the recommendations of the Audit Committee were approved and accepted by the Board during the year under review.

Meetings and Postal Ballot

The Board of Directors met 9 times during the year under review i.e., on 23^rd April 2024, 4^th May 2024, 7^th June 2024, 23^rd JuLy 2024, 13^th September 2024,

22^nd October 2024, 28^th January 2025, 13^th February 2025 and 24^th March 2025, as against the statutory requirement of at Least four meetings. The requisite quorum was present at aLL the Board Meetings. The maximum time gap between any two Meetings was not more than one hundred and twenty days. These Meetings were weLL attended. The 34^th AGM of the Company was heLd on 23^rd JuLy 2024 through Video Conference.

During the year under review, no Extraordinary GeneraL Meeting ("EGM") of the Members was heLd and no resoLution was passed by the Members through PostaL BaLLot.

DetaiLed information on the Meetings of the Board, its Committees, and the AGM is incLuded in the Report on Corporate Governance, which forms part of this AnnuaL Report.

A caLendar of aLL the meetings is prepared and circuLated weLL in advance to the Directors.

Meetings of Independent Directors

The Independent Directors met twice during the year under review, on 24^th September 2024 and 24^th March 2025. The Meetings were conducted without presence of the WhoLe-time Director(s), the NonExecutive Non-Independent Directors, Chief FinanciaL Officer or any other Management PersonneL to enabLe the Independent Directors to discuss matters pertaining to, inter-aLia, review of performance of NonIndependent Directors and the Board as a whoLe, review the performance of the Chairperson of the Company, assess the quaLity, quantity and timeLiness of flow of information between the Company Management & the Board and its Committees and free flow discussion on any matter that is necessary for the Board to effectiveLy and reasonabLy perform their duties.

Directors and Key Managerial Personnel

Appointment/Re-appointment of Directors during FY2025 and up to the date of this report

¦ Re-appointment of Mr. Milind Sarwate (DIN: 00109854) as an Independent Director

Basis approvaL /recommendation of the Nomination and Remuneration Committee ("NRC") and the Board, the members of the Company have at the AnnuaL GeneraL Meeting heLd on 28^th JuLy 2023, approved the re-appointment of MiLind Sarwate (DIN: 00109854) as Independent Director of the Company for a second term of five consecutive years each, commencing from 1^st April 2024 to 31^st March 2029 (both days incLusive) not LiabLe to retire by rotation.

¦    Appointment of Mr. Raul Rebello (DIN: 10052487) as the Managing Director & CEO

Basis recommendation/ approvaL of NRC and the Board of Directors, the Members of the Company had approved appointment of Mr. RauL RebeLLo (DIN: 10052487), as the WhoLe-time Director and KMP designated as Executive Director and MD & CEO-designate with effect from 1^st May 2023 to 29^th ApriL 2024 (both days incLusive) and as the Managing Director & CEO of your Company with effect from 30^th ApriL 2024 up to 30^th April 2028 (both days incLusive), LiabLe to retire by rotation.

Mr. RauL RebeLLo assumed the position of "Managing Director & CEO" of the Company w.e.f., 30^th April 2024, after superannuation of Mr. Ramesh Iyer, Vice-Chairman and Managing Director of the Company effective cLose of business hours of 29^th ApriL 2024.

¦    Appointment of Mr. Vijay Kumar Sharma (DIN: 02449088) as an Independent Director

Pursuant to the recommendation of the NRC and basis approvaL of the Board of Directors of the Company, the members of the Company have at the AnnuaL GeneraL Meeting heLd on 23^rd JuLy 2024, approved appointment of Mr. Vijay Kumar Sharma (DIN: 02449088) as an Independent Director for a term of 5 consecutive years with effect from 15^th May 2024 to 14^th May 2029 (both days incLusive), not LiabLe to retire by rotation.

Cessation of Directors

¦    Upon attaining superannuation, Mr. Ramesh Iyer (DIN: 00220759) ceased to be the Vice-Chairman & Managing Director of your Company effective cLose of business hours of 29^th ApriL 2024.

¦    Mr. Dhananjay MungaLe, (DIN: 00007563) and Mrs. Rama Bijapurkar (DIN: 00001835) ceased to be Independent Director(s) of your Company effective cLose of business hours of 23^rd JuLy

2024,    upon compLetion of their second term of 5 consecutive years each as Independent Director(s) of the Company.

¦    Mr. Chandrashekhar Bhave (DIN: 00059856) ceased to be the Independent Director of your Company effective cLose of business hours of 2^nd February

2025,    upon compLetion of his second term of 5 consecutive years each as an Independent Director of the Company.

The Board of Directors pLaces on record its deepest appreciation for the exempLary contribution, strategic foresight, innovative thinking, and steadfast commitment to exceLLence of Mr. Ramesh Iyer, which

propeLLed Mahindra Finance to great heights. The Board is confident that the Company wiLL continue its growth trajectory under the abLe Leadership of Mr. RauL RebeLLo, Managing Director & CEO.

The Board aLso pLaces on record its sincere appreciation to the vaLuabLe contribution made by Mr. Dhananjay MungaLe, Mrs. Rama Bijapurkar and Mr. Chandrashekhar Bhave during their association as Independent Directors.

During the year under review, no Independent Director of your Company resigned from the Company.

Retirement by Rotation

In terms of provisions of Section 152 of the Companies Act, 2013, Mr. Ashwani Ghai (DIN: 09733798), NonExecutive Non-Independent Director is LiabLe to retire by rotation and, being eLigibLe, has offered himseLf for re-appointment at the 35^th AnnuaL GeneraL Meeting of the Company scheduLed to be heLd on 22^nd JuLy 2025.

Re-appointment of Independent Directors

The first term of Dr. Rebecca Nugent (DIN: 09033085) as an Independent Director of the Company wiLL expire on 4^th March 2026. She is eLigibLe and has consented for re-appointment as an Independent Director for a second term of 5 consecutive years. Dr. Nugent has undertaken the onLine proficiency seLf-assessment test.

Basis the performance evaLuation report, skiLL sets, experience and substantiaL contribution made by Dr. Nugent during her 1^st term, the Board is of the opinion that Dr. Nugent hoLds high standards of integrity, expertise and experience (incLuding the proficiency). Basis recommendation of NRC, the Board of Directors have subject to approvaL of the members of the Company re-appointed Dr. Rebecca Nugent (DIN: 09033085), as an Independent Director of the Company for a second term of 5 consecutive years, w.e.f. 5^th March 2026 to 4^th March 2031 (both days incLusive), not LiabLe to retire by rotation. The necessary resoLution seeking approvaL of the members of the Company has been incorporated in the Notice of the 35^th AnnuaL GeneraL Meeting.

Fit and Proper and Non-Disqualification declaration by Directors

ALL the Directors of the Company have provided annuaL confirmation that they satisfy the "fit and proper" criteria as prescribed under Chapter XI of RBI Master Direction No. RBI/DoR/2023-24/106 DoR. FIN.REC. No.45/03.10.119/2023-24 dated 19^th October 2023, as amended, and that they are not disquaLified from being appointed/continuing as Directors in terms of Section 164 (1) and (2) of the Companies Act, 2013.

Declaration by Independent Directors

ALL the Independent Directors of your Company have given their declarations and confirmation that they fulfil the criteria of Independence as prescribed under Section 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their abiLity to discharge their duties with an objective independent judgment and without any external influence.

Further, the Board after taking these declarations/ disclosures on record and acknowledging the veracity of the same, concluded that the Independent Directors hold highest standards of integrity and possess the relevant proficiency, expertise and experience to quaLify and continue as Independent Directors of the Company and are Independent of the Management of the Company.

In terms of Section 150 of the Companies Act, 2013 read with RuLe 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by Indian Institute of Corporate Affairs, Manesar ('IICA') and the said registration is renewed and active as on the date of this report. Further, the said registration wiLL be renewed, before expiry as appLicabLe, and kept active by the Independent Directors.

The Independent Directors of the Company are either exempted from the requirement to undertake the onLine proficiency seLf-assessment test conducted by IICA or have cLeared the onLine proficiency seLf-assessment test as appLicabLe.

Key Managerial Personnel

The foLLowing persons were designated as the Key ManageriaL PersonneL ("KMP”) of your 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, as on 31^st March 2025:

1.    Mr. RauL RebeLLo, Managing Director & CEO

2.    Mr. Pradeep Kumar AgrawaL, Chief FinanciaL Officer

3.    Ms. BrijbaLa BatwaL, Company Secretary

Changes in Key Managerial Personnel

¦ Mr. Ramesh Iyer ceased to be the Vice-Chairman & Managing Director of your Company on attaining superannuation with effect from cLose of business hours of 29^th ApriL 2024.

 

Laws and that such systems were adequate and operating effectiveLy during the financiaL year ended 31^st March 2025;

Performance Evaluation of the Board

The Companies Act, 2013 ("Act”) and the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations”) stipuLate the evaLuation of the performance of the Board, its Committees, IndividuaL Directors and the Chairperson.

Your Company has formuLated a process for performance evaLuation of the Independent Directors,

 

¦    Mr. RauL RebeLLo ceased to be the Executive Director and MD & CEO Designate with effect from 29^th ApriL 2024 and assumed the office of Managing Director & CEO with effect from 30^th ApriL 2024.

¦    Mr. Vivek Karve resigned from the office of Chief FinanciaL Officer and Key ManageriaL PersonneL ("KMP”) of the Company with effect from cLose of business hours of 31^st October 2024 to pursue personaL, sociaL and professionaL interest beyond fuLL time empLoyment.

¦    In compLiance with ReguLation 26A(2) of the Listing ReguLations, Mr. Animesh Chatterjee was appointed as the Chief FinanciaL and KMP, for interim period i.e. from 29^th January 2025 tiLL 4^th March 2025.

¦    Mr. Pradeep Kumar AgrawaL was appointed as the Chief FinanciaL Officer of the Company effective 5^th March 2025.

Directors' Responsibility Statement

Pursuant to the provisions of Section 134(5) of the

Companies Act, 2013, ("the Act”) your Directors, based

on the representations received from the Operating

Management and after due enquiry, confirm that:

i.    In the preparation of the annuaL accounts for financiaL year ended 31^st March 2025, the appLicabLe accounting standards have been foLLowed and there are no materiaL departures in adoption of these standards;

ii.    They had in consultation with the Statutory Auditors seLected such accounting poLicies and appLied them consistentLy and made judgments and estimates that are reasonabLe and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March 2025 and of the profit of the Company for the year;

iii.    They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irreguLarities;

iv.    They have prepared the annuaL accounts for financiaL year ended 31^st March 2025 on a going concern basis;

v.    They have Laid down adequate internaL financiaL controLs to be foLLowed by the Company and that such internaL financiaL controLs were operating effectiveLy during the financiaL year ended 31^st March 2025;

vi.    They have devised proper systems to ensure compLiance with provisions of aLL appLicabLe

the Board, its Committees and other IndividuaL Directors which incLudes criteria for performance evaLuation of the Non-Executive Directors and Executive Directors.

An annuaL performance evaLuation exercise was carried out in compLiance with the appLicabLe provisions of the Act, Listing ReguLations, the Company's Code of Independent Directors and the criteria and methodoLogy of performance evaLuation approved by the Nomination and Remuneration Committee ("NRC") comprising of Mr. Diwakar Gupta as the Chairperson and Dr. Anish Shah, Mr. MiLind Sarwate and Mr. Vijay Kumar Sharma as its members:

The questionnaires for performance evaluation are comprehensive and in alignment with the guidance note on Board evaluation issued by the SEBI, vide its circular no. SEBI/HO/CFD/CMD/CIR/P/2017/004 dated 5^th January 2017 as amended and merged with SEBI Master Circular dated November 11, 2024 and are in line with the criteria and methodology of performance evaluation approved by the NRC.

Outcome and results of the performance evaluation

All the Directors of your Company as on 31^st March 2025 participated in the evaluation process. The Directors expressed their satisfaction with the Evaluation process. During the year under review, NRC ascertained and reconfirmed that the deployment of "questionnaire” as a methodology, is effective for evaluation of performance of Board and Committees and Individual Directors.

The evaluation outcomes for the year under review were deliberated upon at length with the Board members, Committee Chairpersons and Individual Directors. The results underscore a good level of engagement and diligence by the Board and its various committees, and by the senior leadership.

It was noted that the Board and Committee meetings are meticulously planned and conducted with efficiency, in terms of comprehensive pre-reads being sent well in advance, and constructive participation and deliberations at the meeting led by the Chair. This enabled the Board and Committees to discharge their role effectively and focus on governance and internal controls.

During the year under review, the terms of reference of the Board and Committees were revisited with a view to aligning the same with regulatory expectations, and best group and industry practices, so as to bring renewed focus on review matters.

Board members were appreciative that during the year under review, the Board and its Committees performed their role well, particularly in the areas of financial discipline, strategic direction, compliances, succession planning and performance review. Based on the outcome of the evaluation of the year under review, the Board has agreed to deepen its focus on ESG, risk management and oversight of subsidiaries, with continued focus on maintaining high standards of performance and governance, to enhance the value for all its stakeholders.

Familiarisation Programme for Directors

Your Company has adopted a structured programme for orientation of all Directors including the Independent Directors so as to familiarise them with the Company-its operations, business, industry, environment in which it

functions, Indian and global macro-economic front and the regulatory regime applicable to it. The Management updates the Board Members on a continuing basis of any significant changes therein and provides them an insight to their expected roles and responsibilities so as to be in a position to take well-informed and timely decisions and contribute significantly to the Company. The Directors are provided with all the documents to enable them to have a better understanding of the Company, its operations and the industry in which it operates.

The Independent Directors of your 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. The terms of reference of all the Committees with updations, if any, are shared with all the Board Members on a quarterly basis. Independent Directors meet the business and functional heads and provide their inputs and suggestions on strategic and operational matters at the quarterly Board/Committee Meetings.

Managing Director and Senior Management provide an overview of the operations and familiarise the Directors on matters related to the Company's values and commitments. They are also introduced to the organisation structure, constitution of various committees, board procedures, risk management strategies etc.

Strategic Presentations are made to the Board where Directors get an opportunity to interact with Senior Management. Directors are also informed of the various developments in the Company through Press Releases, emails, etc. Your Company has a secured Board portal which inter-alia provides a one stop and seamless solution for access to Board/Committee materials to all the Directors. The Board portal also contains Annual Report, Code of Conduct for Directors, terms of appointment, committee charters etc. for ease of access. This enables greater transparency to the Board processes.

Pursuant to the provisions of the Companies Act, 2013 and Regulation 25(7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations”), your Company has during the year conducted familiarization programmes through briefings at Board/ Committee meetings for all its Directors including Independent Directors.

Details of familiarization programs imparted to the Independent Directors during the financial year under review in accordance with the requirements of the Listing Regulations are available on the Company's website and can be accessed at the web-link: https://

www.mahindrafinance.com/investor-relations/policy-and-shareholder-information#familiari7ation-program and is also provided in the Corporate Governance Report forming part of this Annual Report.

Policies on Appointment of Directors and Senior Management and Remuneration of Directors, Key Managerial Personnel and Employees:

i)    Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management

In accordance with the provisions of Section 134(3)(e) of the Companies Act, 2013 ("the Act”) read with Section 178 of the Act and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations”), your Company has adopted a Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management, which, inter-alia, includes the criteria for determining qualifications, positive attributes and independence of Directors, succession planning for Directors and Senior Management, and the Talent Management framework of the Company.

During the year under review, the Policy was amended to, inter-alia align with the amendments in the Listing Regulations.

The said policy is available on the website of the Company and can be accessed at https://www. mahindrafinance.com/investor-relations/policy-and-shareholder-information#mmfsl-policies .

ii)    Policy on Remuneration of Directors and Remuneration Policy for Key Managerial Personnel, Senior Management and other Employees of the Company

Your Company has also adopted the Policy on Remuneration of Directors and the Policy on Remuneration of Key Managerial Personnel, Senior Management and other Employees of the Company in accordance with the provisions of sub-section (4) of Section 178 of the Act, Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 and Listing Regulations.

During the year under review the Policy on Remuneration of Directors of the Company was amended to, inter-alia, align with existing legal provisions, introduce certain standard clauses for better articulation.

The Remuneration Policy for Key Managerial Personnel, Senior Management and other employees was amended during the year under review to inter-alia, align with the amendments in the Listing Regulations, and provide flexibility in compensation structuring.

The said Policies are uploaded on the website of the Company and can be accessed at: https://www. mahindrafinance.com/investor-relations/policy-and-shareholder-information#mmfsl-policies

Adequacy of Internal Financial Controls with Reference to the Financial Statements

Your Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations.

Your Company uses various industry standard systems to enable, empower and engender businesses and also to maintain its Books of Accounts. The transactional controls built into these systems ensure appropriate segregation of duties, the appropriate level of approval mechanisms and maintenance of supporting records. The systems, Standard Operating Procedures and controls are reviewed by the Management.

Your Company's Internal Financial Controls are deployed through Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organisations of the Treadway Commission ("COSO”), that addresses material risks in your Company's operations and financial reporting objectives. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting ("ICFR”) issued by The Institute of Chartered Accountants of India. The risk control matrices are reviewed on a quarterly basis and control measures are tested and documented on a quarterly basis. The Company has IT systems in place making the ICFR process completely digital and strengthening the review and monitoring mechanism. Based on the assessments carried out by the Management during the year, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.

Your Company recognises that Internal Financial Controls cannot provide absolute assurance of achieving financial, operational and compliance reporting objectives because of its inherent limitations. Also, projections of any evaluation of the Internal Financial Controls to future periods are subject to the risk that the Internal Financial Control may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures

may deteriorate. Accordingly reguLar audits and review processes ensure that such systems are reinforced on an ongoing basis.

Joint Statutory Auditor's certification on internal financial controls

The Joint Statutory Auditors of your Company viz. M/s. M M Nissim & Co LLP, Chartered Accountants and M/s. M.P. ChitaLe & Co., Chartered Accountants have examined the internal financial controls of the Company and have submitted an unmodified opinion on the adequacy and operating effectiveness of the internal financial controls over financial reporting as at 31^st March 2025.

Internal Audit Framework

Your Company has in place an adequate internal audit framework to monitor the efficacy of the internal controls with the objective of providing to the Audit Committee and the Board of Directors, an independent, objective and reasonabLe assurance on the adequacy and effectiveness of the Company's processes. The internal audit approach verifies compliance with the operational and system related procedures and controls. The Internal Auditor reports to the Audit Committee of the Board.

Separate meetings between the Head of Internal Audit and the Audit Committee

Separate meetings between the Head of Internal Audit and the Audit Committee, without the presence of Management, were enabled to facilitate free and frank discussion amongst them. The meetings were held on 23^rd April 2024, 24^th September 2024 and 22^nd October 2024.

Risk Based Internal Audit ("RBIA") framework

In compliance with RBI circular dated 3^rd February 2021, the Company has in place an effective Risk Based Internal Audit ("RBIA”) Framework to review the efficacy of internaL controLs, processes, poLicies and compliance with Laws and regulations, with the objective of providing an independent and reasonabLe assurance on the adequacy and effectiveness of the organisation's internaL controL and governance processes. The framework is commensurate with the nature of the business, size, scaLe and compLexity of its operations.

The Audit Committee has approved a Risk Based InternaL Audit ("RBIA”) framework, aLong with appropriate processes and pLans for internaL audit of FY2025 and FY2026. The Risk Based InternaL Audit PLan is aLso being reviewed by the Statutory Auditors, Senior Leadership, Chief Risk Officer, Chief CompLiance Officer before being approved by the Audit Committee. The internaL audit pLan is deveLoped based on the risk profiLe of the

audit universe incLuding business activities, functions, branches, appLication systems of the organisation. The RBIA pLan incLudes process audits, branch audits and Information TechnoLogy (IT) & Information Security (IS) audits. InternaL audits are undertaken on a periodic basis to independentLy vaLidate the existing controLs.

Based on the reports of internaL audit, function/process owners undertake corrective action in their respective areas. Significant audit observations are presented to the Audit Committee aLong with agreed management action pLan. The status of the management actions and impLementation of the recommendations are tracked for aLL the observations and are presented to the Audit Committee on a reguLar basis.

Risk Management

Risk management forms an integraL part of the Company's business. Your Company has a comprehensive Risk Management PoLicy in pLace and has Laid down a weLL-defined risk management framework to identify, assess and monitor risks and strengthen controLs to mitigate risks. Your Company has estabLished procedures to periodicaLLy pLace before the Risk Management Committee and the Board of Directors, the risk assessment and minimisation procedures being foLLowed by the Company and steps taken by it to mitigate these risks.

The Risk Management PoLicy, inter-aLia, incLudes identification of eLements of Credit, OperationaL & Enterprise risk, incLuding Cyber Security and reLated risks as weLL as those risks which in the opinion of the Board may threaten the existence of the Company.

The Risk Management Committee ("RMC”) constituted by the Board manages the integrated risk and reviews periodicaLLy the Risk Management PoLicy and strategy foLLowed by the Company.

The 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. Your Company has a robust organisationaL structure for managing and reporting on risks. This risk management mechanism works at aLL the LeveLs, which acts as the strategic defence cover of the Company's risk management and is supported by reguLar review, controL, seLf-assessments and monitoring of key risk indicators.

Operational Risk Management: Your Company has impLemented an OperationaL Risk Management (ORM) PoLicy to proactiveLy manage operationaL risks. The poLicy has impLemented invoLves assessing and measuring risks, monitoring them cLoseLy, and impLementing

mitigating measures through a structured governance framework. ALL new products, processes, and changes as weLL as new financiaL outsourcing arrangements undergo thorough risk evaLuation by the OperationaL Risk team. In terms of the Latest ReguLatory guidance note on OperationaL Risk Management and OperationaL ResiLience, your Company is in compLiance with aLL the appLicabLe key themes specified.

Credit Risk Management: Your Company has successfuLLy impLemented a robust credit risk management framework, risk assessment modeLs to ensure proactive identification, mitigation, and monitoring of potentiaL credit exposures. This strategic approach enhances Company's abiLity to manage risk whiLe optimizing overaLL portfoLio performance.

In compLiance with Master Direction - Reserve Bank of India (Non-Banking FinanciaL Company - ScaLe Based ReguLation) Directions, 2023, the Company has in pLace ICAAP PoLicy and Framework with the objective of ensuring avaiLabiLity of adequate capitaL to support aLL risks in business as aLso enabLe effective risk management system in the Company.

The Chief Risk Officer ("CRO”) oversees and strengthens the risk management function of the Company. The CRO is invited to the Board, Audit Committee, Asset LiabiLity Committee and Risk Management Committee Meetings. The CRO aLong with members of the Senior Management apprises the Risk Management Committee and the Board on the risk assessment, process of identifying and evaLuating risks, major risks as weLL as the movement within the risk grades, the root cause of risks and their impact, key performance indicators, risk management measures and the steps taken to mitigate these risks.

Auditors and Audit ReportsJoint Statutory Auditors and their Reports

Basis the recommendation of the Audit Committee and the Board of Directors, the members of the Company had at the 34^th AnnuaL GeneraL Meeting heLd on 23^rd JuLy 2024, approved appointment of M/s. M M Nissim & Co LLP, Chartered Accountants (ICAI Firm Registration Number: 107122W/W100672) and M/s. M.P. ChitaLe & Co., Chartered Accountants (ICAI Firm Registration Number: 101851W) as the Joint Statutory Auditors of your Company for a term of 3 consecutive years to hoLd office from concLusion of 34^th AGM up to the concLusion of 37^th AGM to be heLd in the year 2027. The Joint Statutory Auditors hoLd vaLid peer review certificate as prescribed under the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations”).

The joint Statutory Auditors have given a confirmation on their eLigibiLity and non-disquaLification.

The joint Statutory Auditors of the Company have issued unmodified Audit Reports on the StandaLone and ConsoLidated FinanciaL Statements for the financiaL year ended 31^st March 2025. The report does not contain any quaLification, reservation or adverse remark or discLaimer.

Adoption of Policy for appointment of Statutory Auditors

In compLiance with the Reserve Bank of India GuideLines dated 27^th ApriL 2021 ("RBI GuideLines”), your Company has in pLace a PoLicy for appointment of Statutory Auditors of the Company. The said PoLicy was amended by the Board of Directors to specificaLLy cover independence of auditors and annuaL review of performance of statutory auditors in compLiance with the RBI GuideLines.

Secretarial Auditor and Audit Report

M/s. KSR & Co, Company Secretaries LLP ("KSR”), the SecretariaL Auditor appointed in accordance with the provisions of Section 204 of the Companies Act, 2013 ("Act”) read with the RuLes framed thereunder. KSR has issued the SecretariaL Audit Report for FY2025 which is appended to this Report as "Annexure II". The SecretariaL Audit Report does not contain any quaLification, reservation or adverse remark or discLaimer. KSR was present at the Last AGM of the Company heLd on 23^rd JuLy 2024.

Appointment of Secretarial Auditor

In compLiance with ReguLation 24(A) of Listing ReguLations as amended vide SEBI notification dated 12^th December 2024 and basis the recommendation of Audit Committee, the Board has approved the appointment of M/s. Makarand M. Joshi & Co. Company Secretaries ("MMJC"), as the SecretariaL Auditor of the Company for first term of 5 consecutive years, to conduct Secretarial Audit and provide other allied certification/permitted services for FY2025-2026 up to FY2029- 2030, subject to approvaL of sharehoLders of the Company at the ensuing AGM.

Consequent to the above, M/s. KSR and Co, Company Secretaries LLP ("KSR”), the current SecretariaL Auditor, has ceased to be the SecretariaL Auditor of the Company from 22^nd ApriL 2025.

MMJC have consented for their appointment as the SecretariaL Auditor and have given a confirmation to the effect that they are eLigibLe to be appointed and are not disquaLified from acting as the SecretariaL Auditor.

Members are requested to consider and approve appointment of MMJC as the SecretariaL Auditor of your Company to conduct SecretariaL Audit and provide other aLLied certification/permitted services for FY 2025-2026 up to FY 2029-2030. Necessary

Particulars of Contracts or Arrangements with Related Parties

Your Company has in pLace a robust process for approvaL of ReLated Party Transactions and on DeaLing with ReLated Parties.

ALL contracts/arrangements/transactions entered into by the Company during the FinanciaL Year with reLated parties were in the ordinary course of business and on an arm's Length basis.

Omnibus approvaL of Audit Committee is obtained for ReLated Party Transactions which are of repetitive nature, which are reviewed on quarterLy basis by the Audit Committee as per ReguLation 23 of the Listing ReguLations and Section 177 of the Companies Act, 2013.

ALL ReLated Party Transactions and subsequent materiaL modifications, if any, were pLaced before the Audit Committee for review and approvaL. Necessary detaiLs for each of the ReLated Party Transactions as appLicabLe aLong with the justification are provided to the Audit Committee in terms of the Company's PoLicy on MateriaLity of and DeaLing with ReLated Party Transactions and as required under SEBI Master CircuLar SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024.

The MateriaL ReLated Party Transactions approved by the Members of the Company are aLso reviewed / monitored on quarterLy basis by the Audit Committee of the Company as per ReguLation 23 of the Listing ReguLations and Section 177 of the Companies Act, 2013.

The Company has not entered into MateriaL ReLated Party Transactions as per the provisions of the Companies Act, 2013 and a confirmation to this effect as required under Section 134(3)(h) of the Companies Act 2013 is given in form AOC-2 as "Annexure III", which forms part of this AnnuaL Report.

In accordance with the appLicabLe provisions of the Master Direction issued by the Reserve Bank of India and the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations”), the 'PoLicy on MateriaLity of and DeaLing with ReLated Party Transactions', is avaiLabLe on the Company's website: https://www.mahindrafinance.com/investor-reLations/ poLicy-and-sharehoLder-information#mmfsL-poLicies .

The transactions of the Company with any person/ entity beLonging to the promoter/promoter group which hoLds 10% or more sharehoLding in the Company as required pursuant to Para A of ScheduLe V of the Listing ReguLations is discLosed separateLy in the financiaL statements of the Company. Members of the Company had approved entering into MateriaL ReLated Party transaction with Mahindra & Mahindra Limited, (Promoter/ HoLding Company and a ReLated party) under ReguLation 23 of the Listing ReguLations. During

 

resolution seeking approval, of members for appointment of MMJC as the Secretarial Auditor has been incorporated in the Notice of 35^th Annual. General. Meeting.

Secretarial Audit of Material Subsidiary

There is no Material. UnListed Indian Subsidiary of the Company as on 31^st March 2025 and the requirement under Regulation 24(A) of the Listing Regulations regarding the Secretarial Audit of MateriaL UnListed Indian Subsidiary is not appLicabLe to the Company for the FinanciaL Year 2024-25.

Annual Secretarial Compliance Report with additional confirmations on compliances

In compLiance with ReguLation 24(A) of Listing ReguLations, your Company has undertaken an audit for FY2025 for aLL the appLicabLe compLiances as per Listing ReguLations, 2015 and CircuLars/ GuideLines issued thereunder.

The AnnuaL SecretariaL CompLiance Report ("ASCR”) issued by M/s. KSR & Co, Company Secretaries LLP, SecretariaL Auditor and a Peer Reviewed Firm, with confirmations with confirmations on compLiances by the Company with respect to Insider Trading ReguLations, ReLated Party Transactions, updation of PoLicies, discLosure of materiaL events to Stock Exchanges etc., has been fiLed with BSE and NSE in the prescribed format and the same can be accessed on the website of the Company at https://www.mahindrafinance. com/investor-reLations/reguLatory-fiLings#secretariaL-compHance-report

The Annual Secretarial Compliance Report does not contain any qualification, reservation or adverse remark.

Cost Records and Cost Audit

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148 of the Companies Act, 2013 are not appLicabLe in respect of the business activities carried out by your Company and hence such accounts and records were not required to be maintained by the Company.

Fraud Reporting

During the year under review, the Joint Statutory Auditors and the SecretariaL Auditor have not reported any instance of fraud committed in the Company by its officers or empLoyees, invoLving an amount of Less than ' 1 crore to the Audit Committee under section 143(12) of the Companies Act, 2013, the detaiLs of which need to be mentioned in this Report.

The Company is reinforcing its commitment to trust, integrity and transparency through enhanced measures for compLiance, risk management, and governance.

the year under review, the aggregate vaLue of the transactions entered with Mahindra & Mahindra Limited did not exceed the materiaLity threshoLd as prescribed under ReguLation 23 of the Listing ReguLations. The Company intends to enter into new MateriaL ReLated Party Transaction with Life Insurance Corporation of India for which the approvaL of Members is being sought. Further detaiLs on the transactions with reLated parties are provided in the accompanying financiaL statements.

Whistle Blower Policy/ Vigil Mechanism

Your Company promotes ethicaL behaviour in aLL its business activities and has estabLished a vigiL mechanism for its Directors, EmpLoyees, and StakehoLders associated with the Company to report their genuine concerns. The VigiL Mechanism as envisaged in the Companies Act, 2013 and the RuLes prescribed thereunder and the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 is impLemented through the WhistLe BLower PoLicy, to provide for adequate safeguards against victimization of persons who use such mechanism and make provision for direct access to the Chairperson of the Audit Committee.

As per the WhistLe BLower PoLicy impLemented by the Company, the EmpLoyees, Directors or any StakehoLders associated with the Company are free to report iLLegaL or unethicaL behaviour, actuaL or suspected fraud, or vioLation of the Company's Code(s) of Conduct or Corporate Governance PoLicies or any improper activity, through the channeLs provided beLow.

The WhistLe BLower PoLicy provides for protected discLosure and protection for the WhistLe BLower. Under the WhistLe BLower PoLicy, the confidentiaLity of those reporting vioLation(s) is protected and they are not subject to any discriminatory practices. The WhistLebLower can make a Protected DiscLosure by using any of the foLLowing channeLs for reporting:

1.    Independent third party Ethics HeLpLine Service PortaL: https://ethics.mahindra.com

2.    ToLL free No: 000 800 100 4175

3.    Chairperson of the Audit Committee

The WhistLe BLower PoLicy has been wideLy disseminated within the Company. The PoLicy is avaiLabLe on the website of the Company at the web-Link https://www. mahindrafinance.com/investor-reLations/poLicy-and-shareholder-information#mmfsl-polic.ies .

During the year, the Company received 9 whistLe bLower compLaints. ALL the cases were investigated and appropriate actions were taken, wherever necessary basis investigation reports.

The Audit Committee is apprised of the vigiL mechanism on a periodic basis. During the year, no person was denied access to the Chairperson of the Audit Committee. A

quarterLy report on the whistLe bLower compLaints is pLaced before the Audit Committee for its review.

Particulars of Employees and Related Disclosures

DetaiLs of empLoyees who were in receipt of remuneration of not Less than ' 1,02,00,000 during the year ended 31^st March 2025 or not less than ' 8,50,000 per month during any part of the year, as required under provisions of Section 197(12) of the Companies Act, 2013 read with RuLe 5(2) and 5(3) of Companies (Appointment and Remuneration of ManageriaL PersonneL) RuLes, 2014 wiLL be made avaiLabLe during 21 days before the AnnuaL GeneraL Meeting in eLectronic mode to any SharehoLder upon request sent at the EmaiL ID: companv.secretarv@ mahindrafinance.com.

DiscLosures with respect to the remuneration of Directors, Key ManageriaL PersonneL and EmpLoyees as required under Section 197(12) of the Companies Act, 2013 and RuLe 5(1) of Companies (Appointment and Remuneration of ManageriaL PersonneL) RuLes, 2014, is given in "Annexure IV"

Disclosure in respect of remuneration/ commission drawn by the Managing Director/ Whole-time Director from Holding or Subsidiary Company

Mr. Ramesh Iyer former Vice-Chairman & Managing Director (up to 29^th ApriL 2024) did not receive any remuneration or commission from HoLding/Subsidiaries of the Company during FY2025.

Mr. RauL RebeLLo, Managing Director & CEO effective 30^th ApriL 2024 (Mr. RauL RebeLLo served as Executive Director and MD & CEO Designate up to 29^th ApriL 2024) did not receive any remuneration or commission from HoLding/ Subsidiaries of the Company during FY2025.

Disclosure Under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act")

Your Company is an equaL opportunity empLoyer and is committed to ensuring that the work environment at aLL its Locations is conducive to fair, safe and harmonious reLations between empLoyees. It strongLy beLieves in uphoLding the dignity of aLL its empLoyees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictLy prohibited.

Your Company has in pLace a comprehensive PoLicy in accordance with the provisions of POSH Act and RuLes made thereunder.

ALL empLoyees (permanent, contractuaL, temporary and trainees) are covered under this PoLicy. The PoLicy has been wideLy communicated internaLLy and is pLaced on

the Company's intranet portal The Company has zero tolerance towards sexuaL harassment.

The POSH Policy is available on the website of the Company and can be accessed at the web-link: https:// www.mahindrafinance.com/investor-reLations/poLicy-and-sharehoLder-information#mmfsL-poLicies.

Your Company has complied with the provisions relating to the constitution of the Internal Complaints Committee ("ICC”) under the POSH Act to redress complaints received regarding sexuaL harassment.

To ensure that aLL the empLoyees are sensitized regarding issues of sexuaL harassment, the Company creates awareness by imparting necessary trainings.

The foLLowing is a summary of SexuaL Harassment compLaint(s) received and disposed of during the FY2025, pursuant to the POSH Act and RuLes framed thereunder:

a)    Number of compLaint(s) of SexuaL Harassment received during FY2025 - 3

b)    Number of compLaint(s) disposed of during FY2025 - 3

c)    Number of cases pending for more than 90 days (which is stipuLated timeLine for compLetion of an inquiry into a compLiant of sexuaL harassment under POSH Act) - NiL

d)    Number of cases pending as on 31^st March 2025 - NiL

Number of workshops/awareness programs on the subject carried out during the year under review were as under:

¦    An onLine e-Learning moduLe for empLoyees on Prevention of SexuaL Harassment covering topics on SexuaL Harassment, the process of fiLing compLaints, deaLing with sexuaL harassment, etc. is deveLoped for training. 99.5% of the empLoyees have compLeted this training.

¦    One Training program on ICC was conducted for aLL ICC members.

¦    One Training program on POSH sensitization was conducted for the HR team.

Disclosure of Maternity Benefit Compliance

Your Company is in compLiance of Maternity Benefit Act, 1961 for the year under review.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information in respect of conservation of energy, technoLogy absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with RuLe 8(3) of the Companies (Accounts) RuLes, 2014 is attached as 'Annexure V’ to the Board's Report.

Policies

The detaiLs of the Key PoLicies adopted by your Company and changes made therein, if any, during the year under review are mentioned at "Annexure VI" to the Board's Report.

Compliance with the Provisions of Secretarial Standard - 1 and Secretarial Standard - 2

The Directors have devised proper systems to ensure compLiance with the provisions of the SecretariaL Standards, i.e., SS-1 and SS-2, reLating to 'Meetings of the Board of Directors' and 'GeneraL Meetings', respectiveLy, issued by the Institute of Company Secretaries of India ("ICSI”) and such systems are adequate and operating effectiveLy

Voluntary adherence of Secretarial Standards to all Board Committees

Although, SS-1 compLiance is required onLy for Board and its Committees mandatoriLy required to be constituted under the Companies Act, 2013 ("the Act”), the Company adheres and compLies with most of the good practices enunciated in the said SecretariaL Standards for aLL its mandatory and non-mandatory Board LeveL Committees.

Your Company has duLy compLied with appLicabLe SS-1 and SS-2, during the year under review.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operations in future.

There were no significant and materiaL orders passed by the reguLators or courts or tribunaLs during the year impacting the going concern status of the Company and its future operations.

Disclosure pertaining to Insolvency & Bankruptcy Code

There were neither any appLications fiLed by or against the Company nor any proceedings were pending under the InsoLvency and Bankruptcy Code, 2016 ("IBC”) during the year under review.

Disclosure on One-Time Settlement

During the year, the Company has not made any onetime settLement for Loans taken from the Banks or FinanciaL Institutions and hence the detaiLs of difference between amount of the vaLuation done at the time of one-time settLement and the vaLuation done whiLe taking Loan from the Banks or FinanciaL Institutions aLong with the reasons thereof is not appLicabLe.

General Disclosures

The Directors further state that no discLosure or reporting is required in respect of the foLLowing items, as there were no transactions/events reLated to these items during the financiaL year under review:

¦    There was no issue of equity shares with differentiaL rights as to dividend, voting or otherwise;

¦    There was no issue of shares (incLuding sweat equity shares) to the empLoyees of the Company under any scheme, save and except EmpLoyee Stock Option schemes referred to in this Report;

¦    During the year under review, Board of Directors at its meeting heLd on 13^th February 2025 had approved raising of funds by way issue of equity shares on rights basis to the eLigibLe sharehoLders for an amount not exceeding ' 3000 Crore, subject to receipt of reguLatory/ necessary approvaLs, as may be required.

¦    There was no buy-back of the equity shares during the year under review;

¦    There were no voting rights which are not directLy exercised by the empLoyees in respect of equity shares for the subscription/ purchase for which Loan was given by the Company (as there is no scheme pursuant to which such persons can beneficiaLLy hoLd

shares as envisaged under Section 67(3)(c) of the Companies Act, 2013 ("the Act");

¦    There was no suspension of trading of securities of the Company on account of corporate action or otherwise;

¦    There was no revision made in FinanciaL Statements or the Board's Report of the Company;

¦    The Company being an NBFC, the provisions reLating to Chapter V of the Act, i.e., acceptance of deposit, are not appLicabLe. DiscLosures as per NBFC reguLations have been made in this AnnuaL Report.

Acknowledgments

The Board conveys its deep gratitude and appreciation to aLL the empLoyees of the Company for their tremendous efforts as weLL as their exempLary dedication and contribution to the Company's performance.

The Directors wouLd aLso Like to thank its sharehoLders, customers, vendors, business partners, bankers, government and aLL other business associates for their continued support to the Company and the Management.

---

Mar 31, 2025

Your Directors are pLeased to present their Thirty-Fifth Report together with the audited financial, statements of your Company for the FinanciaL Year ended 31^st March 2025 ("FY2025”).

Financial Summary and Operational Highlights

 

(' in crore)
Particulars	Consolidated		%	Standalone		%
	FY2025	FY2024	Change	FY2025	FY2024	Change
Total Income	18,530.46	15,970.32	16.03	16,074.69	13,562.42	18.52
Less: Finance Costs	8,415.43	6,959.20	Â	7,898.30	6,426.94	Â
Expenditure	6,832.14	6,204.20	Â	4,755.70	4,551.30	Â
Depreciation, Amortization and Impairment	321.21	274.85	Â	273.42	228.71	Â
Total Expenses	15,568.78	13,438.25	15.85	12.927.42	11,206.95	15.35
Profit before exceptional items and taxes	2,961.68	2,532.07	Â	3,147.27	2,355.47	Â
Share of profit of Associates & Joint Ventures	65.23	56.11	Â	-	Â	-
ExceptionaL items	-	-	-	-	-	-
Profit Before Tax	3,026.91	2,588.18	16.95	3,147.27	2,355.47	33.62
Less: Provision For Tax	Â			Â
Current Tax	820.93	716.10	Â	779.45	664.93	Â
Deferred Tax	(54.89)	(70.97)	Â	22.78	(69.08)	Â
Profit After Tax	2,260.87	1,943.05	16.36	2,345.04	1,759.62	33.27
Less: Profit for the year attributabLe to NoncontroLLing interests	(1)	10.36	Â	-	Â	-
Profit attributable to owners of the Company	2,261.87	1,932.69	17.03	2,345.04	1,759.62	33.27
BaLance of profit brought forward from earLier years	8,364.29	7,417.35	Â	7037.93	6,376.60	Â
Add: Other Comprehensive income /(Loss)	(5.71)	(6.71)	Â	(7.49)	(4.97)	Â
BaLance avaiLabLe for appropriation	10,620.45	9,343.33	Â	9,375.48	8,131.25	Â
Less: Appropriations	Â			Â
Dividend paid on Equity Shares	777.78	740.23	Â	778.38	741.32	Â
Transfer to Statutory Reserves	469.13	352.94	Â	469.00	352.00	Â
Add/Less: Other Adjustments:	Â			Â
Changes in Group's Interest	(0.65)	114.13	Â	-
BaLance carried forward to baLance sheet	9,372.89	8,364.29	Â	8,128.10	7,037.93	15.49
Net worth	21,529.46	19,933.25	8.01	19,812.23	18,157.49	9.11

Consolidated Performance Highlights

¦    TotaL Income increased by 16.03% to ' 18,530.46 crore for FY2025 as compared to ' 15,970.32 crore in FY2024.

¦    Profit Before Tax ("PBT") increased by 16.95% to ' 3,026.91 crore for FY2025 as compared to ' 2,588.18 crore in FY2024.

¦    Profit After Tax ("PAT”) (Net of non-controLLing interest) increased by 17.03% to ' 2,261.87 crore for FY2025 as compared to ' 1,932.69 crore in FY2024.

Standalone Performance Highlights

¦    During the year under review, the Company has disbursed Loans of ' 57,899.69 crore as against ' 56,208.22 crore during the previous year, an increase of 3% over the same period in previous year.

¦    TotaL Income increased by 18.52% to ' 16,074.69 crore for the year ended 31^st March 2025 as compared to ' 13,562.42 crore for the previous year.

¦    PBT increased by 33.62% to ' 3,147.27 crore as compared to ' 2,355.47 crore for the previous year.

¦    PAT increased by 33.27% to ' 2,345.04 crore as compared to ' 1,759.62 crore in the previous year.

¦    The Assets Under Management ("AUM”) registered a growth of 17% and stood at ' 1,19,673.02 crore as at 31^st March 2025 as against ' 1,02,596.77 crore as at 31^st March 2024.

The Gross Stage 3 Loan assets stood at ' 4,413.94 crore as on 31^st March 2025 as compared to ' 3,490.90 crore as on 31^st March 2024. The Gross Stage 3 as a percentage to Business Assets increased to 3.7% as on 31^st March 2025 as against 3.4% as on 31^st March 2024.

During the year, the Company's asset quaLity remained within a comfortabLe range, with Gross Stage 3 sLightLy higher at 3.7% of Business assets and as targeted, the Company has been abLe to maintain the aggregate LeveL of Gross Stage 2 + Gross Stage 3 beLow 10% (actuaL at 9.1%) of business assets as on 31^st March 2025. WhiLe the credit cost for the year was at 1.3% underscoring prudent risk management. The Company continued to maintain underwriting discipLine and a proactive approach to restrict earLy-stage deLinquencies.

Material changes from the end of the financial year till the date of this report

No materiaL changes and commitments have occurred after the cLosure of the FinanciaL Year 2024-25 tiLL the date of this Report, which wouLd affect the financiaL position of your Company.

ECL and other updates

The Company estimates impairment on financiaL instruments as per Expected Credit Loss ("ECL”) approach prescribed under Ind AS 109 'FinanciaL Instruments' and in accordance with the Board approved ECL PoLicy.

In estimation of Expected Credit Loss (ECL) provisions, the Company has been using the updated ECL modeL in which muLti-factor macro-economic variabLes and product cLassification of vehicLe Loan portfoLios are buiLt-in and the Company has been updating the ECL modeL with the Latest set of data inputs at reasonabLe periodic intervaLs to capture the expected significant changes in macro-economic growth prospects and shifts in market drivers and changes in risk profiLe of customer credit exposures. During the current financiaL year, as part of annuaL refresh, aLong with updation of Latest macro-economic growth estimates and other reLevant input parameters for computation of ECL provisions for Loan portfoLios, the Company has aLso caLibrated the ECL modeL for SmaLL and Medium Enterprise (SME) portfoLio and Trade advance portfoLio. The Company had estimated the ECL provision for year ended 31^st March 2025 in accordance with the updated ECL modeL. The Company hoLds provision towards expected credit Loss as at 31^st March 2025 aggregating to ' 3,459 crore (as at 31^st March 2024: ' 3,401.59 crore).

The Company's net Stage-3 assets ratio stood at 1.84% as at 31^st March 2025 as against 1.28 % as at 31^st March 2024.

Transfer to Reserves

The Company has transferred an amount of ' 469 crore to the Statutory Reserves, in compLiance with section 45-IC of the Reserve Bank of India ("RBI”) Act, 1934. Further, the Board of your Company has decided not to transfer any amount to the GeneraL Reserve for the year under review. An amount of ' 8,128.10 crore is proposed to be retained in the Profit and Loss Account of the Company.

The Company maintains sufficient Liquidity buffer to fuLfiL its obLigations arising out of issue of debentures. The Company being an NBFC, is exempt from transferring any amount to debenture redemption reserve in respect of privateLy pLaced or pubLic issue of debentures, as per the provisions of section 71 of the Companies Act, 2013 read with RuLe 18 of the Companies (Share CapitaL and Debentures) RuLes, 2014, read with appLicabLe Ministry of Corporate Affairs circuLar. In respect of secured Listed non-convertibLe debt securities, the Company maintains 100% security cover or higher security cover as per the terms of Information Memorandum, GeneraL Information Document ("GID”), Key Information Document ("KID”), as the case may be and/or Debenture Trust Deed, sufficient to discharge the LiabiLity towards principaL amount and interest thereon.

Dividend

Considering good performance and strong cash flows, your Directors are pLeased to recommend a dividend of ' 6.50 per equity share (325%) on the face vaLue of ' 2 each, for FY2025 vis-a-vis 315% dividend in FY2024. Dividend is subject to approvaL of the Members at the ensuing AnnuaL GeneraL Meeting.

The Company has not paid any Interim Dividend during the financiaL year under review.

The dividend recommended is in accordance with the Company's Dividend Distribution PoLicy, within the ceiLing and in compLiance with the framework prescribed in RBI Master Directions (formerLy known as RBI guideLines on DecLaration of Dividend by NBFCs).

Tax on Dividend

In terms of the provisions of the Income-tax Act, 1961, the Company wiLL make payment of dividend after deduction of tax at source ("TDS”) as per the prescribed rates, to those sharehoLders whose names appear as beneficiaL owner/ member in the List of beneficiaL owners to be furnished by NationaL Securities Depository Limited/ CentraL Depository Services (India) Limited in case of shares heLd in demateriaLised form, or in the Register of Members in case of shares heLd in physicaL

 

fund distribution (through its joint venture Mahindra Manulife Investment Management Private Limited), and fixed deposit schemes. Additionally, your Company continued to penetrate into leasing and loan against property business. In FY2025, the focus has been on building cross sell engine by entering into Insurance Corporate Agency and growing its co-lending and coorigination partnerships with fintechs, NBFCs, Banks and MSME platforms. In addition, your Company has decided to foray into mortgage space.

In the core vehicle finance business, your Company has strengthened its capabilities by designing flexible financial products aligned with customers' cash flow patterns. It has also built heft around underwriting, risk management and has set up a fraud control unit. As a result, it has solidified its dominance in financing Mahindra's vehicles and tractors and is actively pursuing partnerships with prominent Original Equipment Manufacturers ("OEMs”) to expand its market presence. It continues to strengthen its position in the pre-owned vehicle and tractor space.

Pillars of Progress: Growth, Efficiency, and Customer-Centricity

A.    Expanding On-the-Ground Presence

As of 31^st March 2025, MMFSL's network encompasses 1,365 offices and branches across 27 States and 7 Union Territories, reinforcing its nationwide reach. This expansive infrastructure reduces reliance on any single region, mitigating risks posed by localized climatic or economic fluctuations, such as excessive rainfall or drought. Each branch serves as a hub for organic growth, leveraging local relationships to deliver a suite of financial services, including vehicle loans, SME funding, insurance solutions, and more. Centralized oversight ensures consistent asset quality, while the Company's deep penetration into rural and semi-urban markets positions it to address the evolving financial demands and ambitions of India's diverse population.

Your Company's enhanced branch structure facilitates better opportunity to cater to customers' needs and assist us in better customer servicing and improved regulatory compliance.

B.    Strengthening Digital Engagement

Your Company is deepening its reach in rural and semi-urban India through end-to-end digital loan journeys, automated credit assessments, and faster turnaround times.

The redesigned Mahindra Finance Customer App offers customers a seamless experience for EMI payments, loan management, Fixed Deposit booking, and BBPS-enabled utility payments.

 

form, as at the close of business hours on Tuesday, 15^th July 2025 (Record date for the purpose of Dividend).

Unclaimed dividend transferred to Investor Education and Protection Fund

In terms of the provisions of Sections 124 and 125 of the Companies Act, 2013 ("the Act”) read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, during the year under review, the Company has transferred an amount of ' 5,34,873.60 being the unclaimed dividend for FY 2016-17 to the Investor Education and Protection Fund ("IEPF”). The details of total, amount(s) Lying in unpaid dividend account of the Company for last seven years and due to be transferred to IEPF, is mentioned in the Report on Corporate Governance, forming part of this Annual Report.

Dividend Distribution Policy

In compliance with the provisions of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated Dividend Distribution Policy, setting out criteria and circumstances to be considered by the Board while recommending dividend to the shareholders. The Dividend Distribution Policy provides for eligibility criteria, aspects to be considered by the Board while recommending dividend, ceiling on dividend payout ratio etc., in accordance with the Master Direction -Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 dated 19^th October 2023.

As set out in Dividend Distribution Policy, the Company's dividend payout is determined based on available financial resources, investment requirements and optimal shareholder return.

Within these parameters, the Company endeavours to maintain a total dividend payout ratio in the range of 20% to 30% of the annual standalone Profit after Tax ("PAT”) of the Company.

The Dividend Distribution Policy can also be accessed on the Company's website at the web-link: https://www. mahindrafinance.com/investor-relations/policy-and-sharehoLder-information#mmfsL-poLicies .

Operations

Your Company remains dedicated to fueling the aspirations of the customers by providing financing solutions for automobiles and tractors, primarily catering to those who rely on these assets for their livelihoods and personal mobility. Beyond this core offering, your Company has broadened its scope to include preowned vehicle loans, support for small and medium enterprises (SMEs), insurance brokerage services (via its subsidiary Mahindra Insurance Brokers Limited), mutual

The app is available in 12 languages and has over 4.5 lakh+ App sign-ups since launch of revamped version in Dec 2024.

An AI-powered Chatbot launched in 2024, provides multilingual support (in 4 languages) via app and web.

Over 35 lakh+ messages have been exchanged.

UDAAN - Your Company's transformation initiative assists in elevating digital capabilities across the value chain, offering assisted journeys backed by analytics, alternate data, and fraud prevention tools, thereby leading to improved sales and operations productivity, reduced turnaround times, and enhanced financial discipline. The assisted end-to-end digital loan process, enhanced by advanced analytics, alternative data sources, account aggregators (AA), bank statement analysis (BSA), improved fraud prevention measures, credit assessments, digital KYC, e-stamping, e-sign, and e-mandates have led to significantly reduced turnaround times. Additionally, it has streamlined documentation through automation and enhanced transparency throughout the lending process, underscoring our commitment to providing innovative and customer-focused financial solutions.

Our newly launched digital collections application offers a 360-degree view of the customer, featuring a performance and activity dashboard, loan information, payment history, and additional functionalities. By leveraging automated reminders and digital payment platforms, we ensure prompt collections while minimizing operational expenses and reducing delinquencies. Additionally, employees are equipped with nudges to assist customers in navigating repayment options (UPI, QR codes, debit card, internet banking, etc.), addressing any concerns, recording minutes of meetings (MOMs), and providing customized solutions. This initiative has enhanced our portfolio's health, improved customer convenience and experience, and promoted financial discipline within an increasingly digital landscape.

C. Harnessing Technological Innovation

Your Company is leveraging AI, ML, and advanced analytics to optimize underwriting, collections, and decision-making. AI-powered scorecards now segment customers by risk, allowing for smarter approvals and reduced delinquencies. Our GenAI-powered chat interface provides senior management with instant data insights, while a Data Lakehouse enables real-time dashboards and performance tracking.

A next-gen AI collections strategy has reduced EMI bounce rates by 20-25% in early buckets, improving asset quality. AI-ML tools are also being used to enhance the pre-approved and pre-qualified loan offer base by 8x.

Cloud infrastructure has been strengthened through a multi-cloud agnostic strategy, achieving cost efficiencies, better scalability, and improved data security. We have implemented cybersecurity upgrades including DLP, XDR, SIEM, WAF, and MDM tools, along with a 24/7 Security Operations Centre and third-party Red Team assessments to safeguard critical assets.

In line with RBI's IT governance directions, we've built a centralized tech asset inventory, enhanced IT service management workflows, and established robust frameworks for business continuity, risk assessment, and IT outsourcing - reinforcing operational resilience and regulatory compliance.

D.    Data as a Strategic Edge

Your Company has built a centralized Data Lakehouse architecture, empowering real-time access to performance dashboards, KPIs, and crossfunctional business insights. This is strengthening our ability to make data-driven decisions and customize offerings across customer segments.

Advanced analytics are embedded across functions—improving lead conversion, channel productivity, and collections forecasting. These insights are also enhancing financial discipline and regulatory preparedness.

E.    Improved Insurance Coverage of MMFSL assets

Your Company received its corporate agency license from IRDAI in May 2024 and since then Company has partnered with various insurance companies for offering a comprehensive range of insurance products to meet diverse customer needs. Your Company has introduced exclusive group insurance products tailored for its existing customers. Your Company also offers retail insurance solutions in Motor, Health & Life insurance for both new and existing customers.

Your Company leverages its Pan-India branch network of 1365 branches and trained, certified personnel with a strong understanding of customer needs. Your Company has also tied-up with 10 insurance companies - 4 Life, 2 Health and 4 General Insurance companies to provide adequate choice to its customers.

This has resulted in improved insurance penetration and enhanced service delivery through an in-house cLaims team, resulting in better cLaims experience. Continuous employee training and better insurance penetration have further reinforced the model's success, positioning insurance as a strategic lever for risk management. AH these efforts led to an effective insurance coverage of your Company's assets, lives and health of customers.

The distribution network is driven by a dedicated team of employees (Specified Persons) and PoSP (Point of Sales Persons), positioned across ~1200 + locations to ensure widespread reach and seamless customer service.

Additionally, your Company also plans to expand its distribution channel by introducing digital and telemarketing platforms to serve broader customer base across India more efficiently.

F. Future Growth Enablers

MMFSL's vision is to be a leading and responsible financial solution partner of choice for emerging India. This commitment reflects a dual focus on responsible customer service and sustainable profitability, extending beyond traditional lending to a holistic suite of solutions. The emphasis on digital innovation and product diversification is central to this vision.

Your Company targets a sustainable growth trajectory and maintaining stable asset quality. Strategic efforts are focused on deepening penetration in pre-owned car, used tractor, and SME financing, tapping into untapped demand within these segments. To broaden its service offerings, MMFSL has forged new alliances for colending and co-origination. These collaborations enhance outreach, improve credit access, and offer competitive rates to underserved communities. The AUM from these partnerships have gone up significantly in the current financial year as compared to the previous financial year. The Company remains committed to refining its risk management, underwriting frameworks to sustain top-tier asset quality and strengthening its partnerships with fintechs, NBFCs, banks & MSME platforms. Moving forward, the growth strategy will be centred around leveraging digital platforms to enhance service delivery through customer acquisition, establishing strategic alliances and exclusive partnerships with fintech firms and next-generation technology distributors, strengthening

digital capabilities to ensure seamless accessibility and an optimized customer experience and utilizing digital platforms to identify cross-sell and up-sell opportunities while enhancing overall customer service.

Other Developments¦    Mortgage Business

The Board of your Company has approved expansion into Mortgage business which would include providing Housing Finance, Top-up loans, Lease rental discounting, home improvement and home extension loans, balance transfer loans, construction finance etc. Your Company intends to leverage its strong geographical presence in the retail lending space to exploit the mortgage lending opportunity for its existing customers as well as new customers. Your Company would also participate in affordable housing loan schemes of government. This expansion would leverage your Company's established presence in the financial services sector and its deep understanding of the customer needs resulting in increase in the mortgage lending opportunity to its existing customers as well as new customers.

Your Company is in the process of building its mortgage capabilities and is in investment mode with focus on recruitment, infrastructure build out, and technology setup towards building up its capabilities.

¦    Rights Issue of Equity Shares

The Board of Directors of the Company ("Board”) at their meeting held on 13^th February 2025, had inter-alia considered and approved the fund raising by way of offer and issuance of fully paid-up equity shares of the Company for an amount not exceeding ' 3,000 Crore by way of a rights issue ("Rights Issue”) to the eligible equity shareholders of the Company, to primarily maintain a strong capital adequacy ratio keeping in mind Company's growth plans to augment its Assets Under Management ("AUM"). Till the date of this report the Company has not made any public announcement and has not undertaken further action or decision in relation to the Rights Issue including setting a Record date or ratio or pricing. Necessary intimations/ announcements to the shareholders, stock exchanges etc., on the above would be made in due course.

Change in Nature of Business

There has been no change in the nature of business and operations of the Company during the year under review.

RBI Compliances

Your Company has been categorised as an NBFC- Upper Layer vide press release dated 30^th September 2022, issued by RBI. Your Company has always endeavored to maintain the highest standards of compliance within the organisation and shall continue to do so going ahead. The Company continues to comply with all the applicable laws, regulations, guidelines etc. prescribed by the RBI, from time to time including the norms pertaining to capital adequacy, non- performing assets etc.

Your Company's asset liability management is reviewed on quarterly basis by a focused Board level committee viz. Asset Liability Committee. Your Company's liquidity coverage ratio ("LCR”) was 277% as on 31^st March 2025 against the mandatory requirement of 100%.

Your Company has adopted all the mandatory applicable policies under Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 like Large Exposure Policy, Internal Capital Adequacy Assessment Policy (ICAAP), Compliance Policy etc.

Compliance Risk Assessment Framework and Compliance Testing ("CRAFT")

Your Company has also put in place Compliance Risk Assessment Framework and Compliance Testing in compliance with RBI circular dated 11^th April 2022.

Business Continuity Policy

In order to have robust framework & process for Business continuity, your Company has implemented Business Continuity Management Policy which inter-alia includes identification, monitoring, reporting, responding and managing the risks including mitigating risks of a significant / prolonged business disruption in order to protect the interests of the Company's customers, employees and stakeholders.

Your Company continues to invest in talent, systems and processes to further strengthen the control, compliance, risk management and governance standards in the organisation.

Internal Ombudsman

Your Company has appointed an Internal Ombudsman ("IO”) in compliance with the Master Direction - Reserve Bank of India (Internal Ombudsman for Regulated Entities) Directions, 2023 dated 29^th December 2023, ("Master Directions”).

In compliance with Master Directions, Mr. Alok Kumar Sharma has been appointed and is currently serving as the 'IO' of the Company, contact details of IO are available on the website and can be accessed on the website at https://www.mahindrafinance.com/customer-service/nbfc-ombudsman-scheme/contact-details

The Board of Directors at the quarterly Board meetings review number of complaints escalated to IO and status of disposal of such complaints in compliance with the said RBI circular. Report on number of complaints escalated to IO and status of disposal of such complaints is reproduced hereunder:

No of complaints outstanding at the beginning of the year	404
No of complaints received during the year	43,174
Of the complaints received, number of complaints referred to IO during the year, which were rejected by the Company	2,757
Of the complaints referred to IO how many complaints were agreed by IO	2,749
Of the complaints referred to IO how many complaints were disagreed by IO	8
Total complaints pending with IO at the end of the year	74

Macro factors and sourcing of funds:

During the year under review, Reserve Bank of India ("RBI”) focused mainly on neutral monetary policy to ensure that inflation durably aligns with the target, while supporting growth. During Q4 FY2025 with inflation on a decreasing trend and increasing global uncertainties, RBI reduced the REPO Rate by 25bps to 6.25%. Liquidity conditions remained tight with the banking sector liquidity remaining largely negative in FY2025.

Inflation in India has remained majorly below 6% (RBI upper tolerance limit) throughout the year. Consumer Price Index ("CPI”) inflation was 3.34% in March 2025. Globally, inflation showed a downward trajectory and seems to be moderating paving the way for a growth revival. However, this comes with a caution as successive shocks like the Russian-Ukraine war, Israel-Hamas-Iran conflict, significant US policy changes by new administration in 4 distinct areas viz: trade, immigration, fiscal policy and regulation which is expected lead to global uncertainty and economic slowdown. The rupee has remained under pressure throughout FY2025 against the US dollar. During Q4 FY2025, it remained volatile primarily on account of proposed US policy changes, however it recovered and ended at ' 85/$ mark.

The 10 Year G Sec curve has been following a reducing trend from around 7.1% to 6.5% during the financial year. During the year, interest cost on borrowed funds remained at 7.64% (interest cost to average borrowing) for the Company.

During the year under review, your Company continued with its diverse methods of sourcing funds incLuding borrowing through Secured and Unsecured Debentures, Term Loans, External Commercial Borrowings, Securitisation, Fixed Deposits, Commercial Papers, Inter Corporate Deposit etc., and maintained prudential Asset Liability match throughout the year. Your Company sourced long-term debentures and loans from banks and other institutions at attractive rates. Your Company continues to expand its borrowing profile by tapping new lenders and geographies.

Securitisation

During the year, your Company successfully completed Securitization/Direct Assignment transactions aggregating to ' 6,530 crore.

Non-Convertible Debentures

During the year under review, your Company raised an aggregate of ' 7,255 crore through issuance of Nonconvertible ("NCDs") debentures private placement basis as mentioned hereunder:

1.    ' 5,755 crore, raised though issuance of Secured Redeemable Non-Convertible Debentures.

2.    ' 1,500 crore raised through issuance of Unsecured Redeemable Non-Convertible Subordinated Debentures eLigibLe for Tier II CapitaL.

As specified in the respective offer documents, the funds raised from issuance of NCDs were utiLised for various financing activities, onward lending, repaying the existing indebtedness, working capital and for general corporate purposes of the Company. Details of the end-use of funds were furnished to the Audit Committee on a quarterly basis. The NCDs are listed on the debt market segment of BSE Limited. As on 31^st March 2025 there are no unlisted NCDs.

During the year, your Company has redeemed NCDs worth ' 4,645 crore and subordinated debt worth ' 215 crore on private placement basis.

Your Company is in compliance with the applicable guidelines issued by Securities and Exchange Board of India and other applicable regulators in this regard.

There has been no default in making payments of principal and interest on aLL the NCDs issued by the Company on a private pLacement basis and through pubLic issue. Further, there was no deviation/variation in use of proceeds raised from the object stated in the offer document. As on 31^st March 2025, there was no unpaid/uncLaimed interest on NCDs issued on a private pLacement basis. With respect to the three pubLic issuances of NCDs made by the Company, aggregate PrincipaL payment of ' 5,93,000 /- and Interest of ' 40,38,064 /- was uncLaimed by the investors as on 31^st March 2025. Reminders have been sent to the NCD hoLders to cLaim the same.

Commercial Paper

As on 31^st March 2025, the Company had CommerciaL Paper ("CPs”) with an outstanding amount (face vaLue) of ' 2,153 crore. CPs constituted approximateLy 2.09% of the outstanding borrowings as on 31^st March 2025. The CPs of the Company are Listed on the debt market segment of the NationaL Stock Exchange of India Limited.

Borrowings

In order to expand the business of the Company and to cater the enhanced budgeted disbursements, the Board of Directors of the Company have subject to the approvaL of the sharehoLders of the Company, approved increase in the overaLL borrowing Limit from ' 1,30,000 crore to ' 1,50,000 crore.

Credit Ratings

Your Company enjoys highest rating for its Long-term and short-term borrowing programmes from aLL the credit rating agencies that it works with. Your Company has been rated by CRISIL Ratings Limited ("CRISIL”) & India Ratings and Research Private Limited ("India Ratings”) for its NonConvertibLe Debentures program, CommerciaL Papers, Banking FaciLities & Fixed Deposits. Further, CARE Ratings Limited ("CARE”) and Brickwork Ratings India Pvt. Ltd. ("BWR”) has rated your Company for the Non-ConvertibLe Debentures program. These rating agencies have reaffirmed the highest credit rating for your Company's short-term & Long-term borrowing instruments. Your Company beLieves that its credit ratings and strong brand equity enabLes it to borrow funds at competitive rates. The details of ratings are given in the Corporate Governance Report, forming part of this AnnuaL Report.

Capital Adequacy

As on 31^st March 2025, the CapitaL to Risk Assets Ratio ("CRAR”) of your Company was 18.33% which is weLL above the minimum requirement of 15% CRAR prescribed by the Reserve Bank of India.

Out of the above, Tier I capitaL adequacy ratio stood at 15.25% and Tier II capitaL adequacy ratio stood at 3.08% respectiveLy.

Share Capital

The issued, subscribed and paid-up Equity Share CapitaL as on 31^st March 2025 was ' 247.1 crore, consisting of 123,55,29,920 Equity Shares of the face vaLue of ' 2 each, fuLLy paid-up.

There was no change in the issued, subscribed and paid-up share capitaL during the year under review.

As on 31^st March 2025, none of the Directors of the Company hoLd instruments convertibLe into equity shares of the Company. DetaiLs of Restricted Stock units ("RSUs") granted to Executive Directors are given in the Corporate Governance Report forming part of this AnnuaL Report.

Economy Global Economy

As per the InternationaL Monetary Fund, the gLobaL economy in CY 2024 navigated a compLex Landscape shaped by geopoLiticaL shifts, trade fluctuations, and inflationary trends. The EL Nino phenomenon significantLy impacted economic stabiLity, causing droughts, floods, and disruptions to marine ecosystems, affecting

agricuLture, infrastructure, and the fishing industry whiLe increasing inflationary pressures. OiL prices remained voLatiLe, initiaLLy rising due to geopoLiticaL tensions and positive macroeconomic trends but Later decLining amid bearish sentiment, economic concerns, and easing supply risks. Moreover, gLobaL trade faced disruptions as Red Sea attacks reduced Suez CanaL traffic, whiLe Panama CanaL drought-driven restrictions sLowed shipments across the worLd. GLobaL growth is expected moderate from 3.3% in 2024 to 2.8% in 2025, and projected to stabiLise at 3.0% in 2026. SuppLy chain vuLnerabiLities prompted businesses and governments to reassess trade dependencies and impLement strategic measures. Inflation is expected to ease from 5.7% in 2024 to 4.3% in 2025 and 3.6% in 2026, remained a concern, influencing cautious monetary poLicies. Rising trade tensions, incLuding new tariffs and retaLiatory actions, couLd introduce uncertainties, impacting inflation and economic momentum. However, economies are expected to Leverage innovation, sustainabiLity efforts, and poLicy interventions to maintain Long-term stabiLity in future.

Domestic Economy

India remained one of the fastest-growing major economies as strong domestic demand, structuraL reforms, and supportive poLicies drove its expansion. The country surpassed the UK to become the worLd's fifth-Largest economy, with steady growth supported by manufacturing expansion, a robust services sector, and increased infrastructure investments. Government initiatives, such as digitaL transformation and financiaL incLusion, strengthened domestic manufacturing and attracted foreign direct investment. Despite gLobaL uncertainties, geopoLiticaL tensions, and inflationary pressures sLowing growth in FY2025, the economy is expected to reach 6.5% in FY2026 as per the RBI Monetary PoLicy Report (ApriL-2025). However, with the inflationary pressures easing, the Reserve Bank of India reduced the repo rate to 6.00% in ApriL 2025. WhiLe gLobaL risks persist, India's economic outLook remains strong, reinforcing its position as a Leading gLobaL economic powerhouse.

Management Discussion and Analysis

In accordance with the appLicabLe provisions of the Master Direction- Reserve Bank of India (Non-Banking FinanciaL Company - ScaLe Based ReguLation) Directions, 2023 and the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015, a detaiLed anaLysis of the Company's performance is discussed in the Management Discussion and AnaLysis Report, which forms part of this Report.

Corporate Governance

Your Company practices a culture that is built on core values and ethical governance practices. Your Company is committed to Integrity and transparency in all its dealings and pLaces high emphasis on business ethics. The Board of your Company exercises its fiduciary responsibilities in the widest sense of term and endeavours to enhance long-term shareholder value. Company's disclosure regime is aimed at achieving best practices, gLobaLLy

A Report on Corporate Governance along with a Certificate from M/s. KSR & Co, Company Secretaries LLP, Secretarial Auditor, certifying compliance with the conditions of Corporate Governance forms part of this Report.

Ethics Framework

The Ethics & Corporate Governance framework is anchored by dearly defined policies and procedures, covering areas such as Anti-Bribery and Anti-Corruption Policy ("ABAC”), Policy on Gifts & Entertainment ("G&E"), PoLicy on Prevention of SexuaL Harassment at WorkpLace ("POSH"), WhistLe-BLower PoLicy ("WB") to ensure robust Corporate Governance.

New joiners are mandatoriLy required to undertake e-Learning moduLes on the Company's Code of Conduct ("COC"), POSH and ABAC. In addition to this, an AnnuaL CompLiance DecLaration ModuLe on COC is mandated for aLL the empLoyees.

The Code of Conduct and aLL the Company's poLicies are accessibLe on the Company's website; in the Governance section at the web-Link: https://www.mahindrafinance. com/investor-reLations/poLicy-and-sharehoLder-information#mmfsL-poLicies .

The Code of Conduct Committee and the Audit Committee ensures that the areas of Ethics & Governance framework are executed effectiveLy and the decisions on substantiated cases are taken in a fair, just and consistent manner across business.

Investor Relations

During the current year, your Company has met muLtipLe investors and anaLysts-both domestic and international These sessions were undertaken through a mix of one-on-one or group meetings. Your Company aLso participated in muLtipLe domestic conferences organised by reputed broking houses, in addition to accessing overseas investors through Non-DeaL Roadshows ("NDRs"). Having meetings in virtuaL format (through conference caLLs and video conferencing) enabLed accessing a Larger investor base.

Your Company hoLds quarterLy and annuaL earnings caLLs through structured conference caLLs and/or web-Links, detaiLs of which are made avaiLabLe to pubLic through the Company's website and stock exchange(s).

During these meetings/ earnings caLLs, the interactions are based on generaLLy avaiLabLe information accessibLe to the pubLic in a non-discriminatory manner. No unpubLished price sensitive information is shared during such meetings. Your Company beLieves in transparent communication and have been voLuntariLy discLosing criticaL information regarding Company's performance through monthLy/quarterLy updates.

Silent period

As a good governance practice, your Company voLuntariLy observes a 'SiLent / Quiet period' starting from 1^st day of the start of the month after the end of the quarter for which the financiaL results are to be announced tiLL the time of announcement of said resuLts. During this period, no meetings with investors/anaLysts/funds are heLd to discuss unpubLished financiaL performance of the Company to ensure protection of the Company's UnpubLished Price Sensitive Information ("UPSI").

Consolidated Financial Statements

The ConsoLidated FinanciaL Statements of your Company, its subsidiaries, associate/joint venture for FY2025, prepared in accordance with the reLevant provisions of the Companies Act, 2013 ("the Act") and appLicabLe Indian Accounting Standards aLong with aLL reLevant documents and the Auditors' Report form part of this AnnuaL Report.

Pursuant to the provisions of Section 136 of the Act, the StandaLone and ConsoLidated FinanciaL Statements of the Company, aLong with reLevant documents and financiaL statement of each of the subsidiaries of the Company are avaiLabLe on the website of the Company and can be accessed at the web-Link: https://www. mahindrafinanc.e.c.om/investor-relations/financ.ial-information .

Subsidiaries, Joint Venture(s) and Associate(s)

A report on the performance and financiaL position of each of the Company's subsidiaries, associate/ joint venture is incLuded in the ConsoLidated FinanciaL Statements and the saLient features of their financiaL statements and their contribution to overaLL performance of the Company as required under Section 129(3) of the Companies Act, 2013 ("the Act") read with RuLe 8(1) of the Companies (Accounts) RuLes, 2014, is provided in Form AOC-1, annexed as 'Annexure A’ to the ConsoLidated FinanciaL Statements and forms part of this AnnuaL Report.

Material Subsidiary

ReguLation 16 of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations") defines a "materiaL subsidiary" to mean a subsidiary, whose turnover or net worth exceeds ten percent of the consoLidated turnover or net worth respectiveLy, of the Listed entity and its subsidiaries in the immediateLy preceding accounting year.

Mahindra RuraL Housing Finance Limited ("MRHFL") which was a materiaL subsidiary of the Company up to year ended 31^st March 2024, did not meet the criteria for materiaL subsidiary as stated in reguLation 16(1)(c) of the Listing ReguLations for FY2025 and accordingLy MRHFL ceased to be a MateriaL subsidiary of the Company for FY2025.

Your Company does not have any MateriaL Subsidiary for the FinanciaL year ended 31^st March 2025.

Operational and performance highlights of the Company’s Subsidiary/Joint venture Companies for FY2025 are given hereunder:Mahindra Rural Housing Finance Limited

Mahindra RuraL Housing Finance Limited ("MRHFL"), the Company's subsidiary, engaged in the business of providing Loans for purchase, renovation and construction of homes to individuaLs in the Low and middLe income category of the country, registered a totaL income of ' 1,196.70 crore as compared to ' 1,294.44 crore for the previous year, decrease of 7.55 % over the previous financiaL year. Loss Before Tax stood at ' 304.58 crore as compared to profit before tax of ' 4.84 crore for the previous year. Loss After Tax stood at ' 227.94 crore as compared to profit after tax of ' 3.60 crore in the previous year. Company is making strategic efforts to drive enhanced operationaL efficiencies.

During the year under review, MRHFL disbursed Loans aggregating to ' 2,023 crore serving more than 12,600 househoLds as against ' 2,071 crore in the previous year. MRHFL is expanding its footprint in affordabLe housing.

Mahindra Insurance Brokers Limited

Mahindra Insurance Brokers Limited ("MIBL"), whoLLy owned subsidiary of the Company (effective 22^nd September 2023) is engaged in the business of Direct and Re-insurance Broking.

During the year under review, there was growth of 4.03% in Gross Premium faciLitated for the Corporate and RetaiL business Lines, increasing from ' 4,555.86 crore in FY2024 to ' 4,739.27 crore in FY2025. The TotaL Income increased by 13.21% from ' 1,094.95 crore in FY2024 to ' 1,239.59 crore in the FY2025. The Profit Before Tax decreased by 26.02% from

' 167.50 crore to ' 123.92 crore and the Profit After Tax decreased by 28.12% from ' 123.52 crore to ' 88.78 crore during the same period.

Mahindra Manulife Investment Management Private Limited

Mahindra ManuLife Investment Management Private Limited ("MMIMPL") acts as an Investment Manager for the schemes of Mahindra ManuLife MutuaL Fund ("MutuaL Fund"). As on 31^st March 2025, MMIMPL was acting as the investment manager to 24 schemes of the MutuaL Fund. The average Assets Under Management in these 24 schemes rose to ' 27,090 crore as on 31^st March 2025 as compared to ' 19,659 crore as on 31^st March 2024, deLivering a growth of 38% in assets. Of these assets, ' 24,441 crore were in equity and hybrid schemes in March 2025, as compared to ' 17,613 crore in March 2024, a growth of 38.77%. MMIMPL has empaneLed 34,439 distributors and now has 14,06,485 investor accounts in these 24 schemes.

During the year under review, the totaL income of MMIMPL was ' 87.71 crore as compared to ' 63.54 crore for the previous year. The operations for the year under consideration have resuLted in a Loss of ' 10.06 crore as against a Loss of ' 27.27 crore during the previous year. MMIMPL pLans to reduce Losses through focus on consistent fund performance, saLes strategy aimed to buiLd market share with key distributors, and prudent cost management. AdditionaLLy, MMIMPL pLans to enhance product suite by Launching 2-3 new funds during FY2026 to enabLe soLutions across the risk reward spectrum.

Mahindra Manulife Trustee Private Limited

Mahindra ManuLife Trustee Private Limited ("MMTPL") acts as the Trustee to Mahindra ManuLife MutuaL Fund ("MutuaL Fund").

During the year, MMTPL earned trusteeship fees of ' 99.14 Lakhs and other income of ' 14.62 Lakhs as compared to ' 107.03 Lakhs and ' 10.29 Lakhs, respectiveLy, for the previous year. MMTPL recorded a profit of ' 61.82 Lakhs for the year under review as compared to profit of ' 59.72 Lakhs in the previous year.

Mahindra Ideal Finance Limited (Sri Lanka)

Your Company hoLds a 58.2% stake in Mahindra IdeaL Finance Ltd (Sri Lanka) {"MIFL"] with a totaL investment of ' 77.97 crore. Leveraging Mahindra Finance's expertise of over 30 years in the financiaL services sector and the LocaL management's expertise of the domestic market, MIFL is poised to buiLd a Leading financiaL services business in Sri Lanka.

Transfer of Unclaimed amounts pertaining to Fixed Deposits to IEPF:

Pursuant to Section 125 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) RuLes, 2016 ("the IEPF RuLes") as amended from time to time, matured Deposits remaining uncLaimed for a period of seven years from the date they became due for payment are required to be transferred to the Investor Education and Protection Fund ("IEPF") estabLished by the CentraL Government. Further, interest accrued on the deposits which remain uncLaimed for a period of seven years from the date of payment are aLso required to be transferred to the IEPF under Section 125(2)(k) of the Companies Act, 2013.

The Company, during FY2025 has transferred to the IEPF an amount of ' 0.35 crore being the uncLaimed amount of matured fixed deposits and ' 0.05 crore towards uncLaimed/unpaid interest accrued on the Deposits. The concerned depositor can cLaim the Deposit and/or interest from the IEPF by foLLowing the procedure Laid down in the IEPF RuLes.

Loans and Advances

During the year under review, the Company has not given any Loans and advances in the nature of Loans to its Directors or subsidiaries or associate or to firms/ companies in which Directors are interested and no such transactions were outstanding during the year.

DiscLosure on transaction with Mahindra and Mahindra Limited (Promoter) hoLding 52.16% in the Company, as on 31^st March 2025, and other Promoter Group Companies, is provided in note no. 51 of Audited StandaLone FinanciaL Statements for year ended 31^st March 2025.

AccordingLy, the discLosure of particuLars of Loans/ advances, etc., as required to be furnished in the AnnuaL Accounts of the Company pursuant to ReguLation 34[3] and 53(1)(f) read with paragraph A of ScheduLe V of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 is not appLicabLe to the Company.

Particulars of Loans, Guarantees or Investments in Securities

Your Company, being an NBFC registered with RBI and engaged in the business of giving Loans in ordinary course of its business, is exempt from compLying with the provisions of Section 186 of the Companies Act, 2013 ("the Act") with respect to Loans.

 

With improving economic and business environment witnessed in Sri Lanka, MIFL recorded significant rebound in its business activities. The disbursement in vehicLe Lending business in FY2025 was LKR 8.8 Bn, a growth of 212% over FY2024. The Gold loan disbursements docked 20.1 Bn, an increase of 82% over FY2024.

As at 31^st March 2025, the Company's GS3 LeveL dropped to 1.86%, which is industry Leading in the context of the Sri Lankan market. The Company achieved year-round coLLection efficiency of more than 100% in FY2025.

MIFL's totaL income for the FY25 was SriLankan rupee ("LKR") 2,741 Mn vs LKR 2,309 Mn of FY2024. Profit Before Tax (PBT) in FY2025 was LKR 434 Mn, an increase of 30% over FY2024 PBT of LKR 334 Mn. and Profit After Tax (PAT) in FY2025 was LKR 146 Mn, a growth 42% over FY2024 PAT of LKR 103 Mn. MIFL continued investments in increasing its reach to grow the business. The branch network grew to 35 branches, an addition of 5 branches in FY2025, covering the Length and breadth of the country. Investments were made in IT aLso to enhance the customer and user experience.

Mahindra Finance CSR Foundation

Mahindra Finance CSR Foundation was incorporated on 2^nd ApriL 2019 as a whoLLy owned subsidiary of Company registered under Section 8 of the Companies Act, 2013 to promote and support CSR projects and activities of the Company and its group Companies.

The foundation has obtained Registration under Section 12AA and Section 80G of the Income Tax Act, 1961 and CSR Registration Number.

Joint Venture/AssociateMahindra Finance USA LLC ["MFUSA"]

MFUSA's retaiL and deaLer disbursement registered a decrease of 12.39% to USD 803.93 miLLion for the year ended 31^st March 2025 as compared to USD 917.58 miLLion for the previous year.

TotaL Income increased by 5.55% to USD 82.16 miLLion for the year ended 31^st March 2025 as compared to USD 77.84 miLLion for the previous year. Profit before tax was reLativeLy flat at USD 22.67 miLLion as compared to USD 22.86 miLLion for the previous year. Profit after tax decreased by 1.61% to USD 16.93 miLLion as compared to USD 17.21 miLLion in the previous year.

Changes in Subsidiaries, Joint Venture or Associate Companies during the year

During the year under review, there were no changes in the Company's Subsidiaries, Joint Venture/ Associate Companies.

Fixed Deposits and Loans/ Advances

Your Company offers a wide range of Fixed Deposit schemes that cater to the investment needs of various cLasses of investors. These Deposits carry attractive interest rates with superior service enabLed by robust processes and technoLogy. In order to tap ruraL and semi-urban savings, your Company continues to expand its network and make its presence feLt in the most remote areas of the country.

During the year, CRISIL and India Care Ratings Private Limited (FITCH) have reaffirmed a rating of 'CRISIL AAA/StabLe' and 'IND AAA/StabLe' respectiveLy. your Company's Fixed Deposit program which represents highest degree of safety and security of principaL as weLL as timeLy payment of interest. Your Company's Deposits continue to be a preferred investment avenue amongst the investors.

Mahindra Finance accepts deposits from both retaiL and corporate investors. During the year, your Company has mobiLized funds to the tune of ' 6,620.13 Crore from fixed deposits. The consoLidated deposit book of Mahindra Finance stood at ' 10,926.45 Crore as on 31^st March 2025, with an investor base of over 1,01,324 investors.

Digital initiatives

Your Company continues to take rapid strides in improving its digitaL footprint and enabLing an end-to-end paperLess process. Your Company has Launched Mahindra Finance Customer App enabLing customer to enjoy muLtipLe services and products from Mahindra Finance under one pLatform.

Your Company continues to serve the investors by introducing severaL customer centric measures on an ongoing basis to further strengthen its processes in sync with the requirements of the Fixed Deposit ("FD") hoLders. Your Company periodicaLLy sends various intimations via SMS, e-maiLs, post, courier etc., to its investors as weLL as sends reminder emails to cLients whose TDS is LiabLe to be deducted before any payout/accruaL. Your Company aLso provides a digitaL pLatform for onLine appLication/ renewaL of deposits, onLine generation of TDS certificates from customer/ broker portaL and seamLess investment process for its empLoyees.

Your Company has roLLed out severaL customer centric and technoLogicaL initiatives aimed at offering a superior experience to fixed deposit hoLders. Some key ones incLude:

¦    Empowering customers to on board and avaiL servicing through Mahindra Finance Customer App.

¦    Improved customer experience by introducing Digi-Locker based KYC verification to increase coverage of digitaL on boarding.

¦    Introduced partiaL renewaL of FD to reduce the hassLe of rebooking for our customers.

¦    DeveLoped and integrated UPI intent flow to reduce the chances for payment faiLures.

With respect to Fixed Deposits accepted by the Company there has been no default in repayment of principaL or interest on fixed deposit during the year under review.

Your Company being a Non-Banking FinanciaL Company the discLosures required as per RuLe 8(5)(v) and (vi) of the Companies (Accounts) RuLes, 2014 read with Sections 73 and 74 of the Companies Act, 2013, are not appLicabLe to it.

The information pursuant to CLause 35(1) of Master Direction DNBR.PD.002/03.10.119/2016-17 dated 25^th August 2016 issued by the Reserve Bank of India on Non-Banking FinanciaL Companies Acceptance of PubLic Deposits (Reserve Bank) Directions, 2016 ("NBFC ReguLations"), regarding unpaid/uncLaimed pubLic deposits as on 31^st March 2025, is furnished beLow:

i.    TotaL number of accounts of PubLic Deposits of the Company which have not been cLaimed by the depositors after the date on which the deposit became due for repayment: 3434.

ii.    TotaL amounts due under such accounts remaining uncLaimed beyond the dates referred to in cLause (i) as aforesaid: ' 3.81 crore.

Reminders are being sent to the Depositors to cLaim their uncLaimed amounts. Measures taken by the Company to reduce uncLaimed amount incLude penny drop testing, reaching out investors through SMS/ CaLLs/ EmaiL/PhysicaL Letters, assisting nominees, LegaL heir on cLaim settLement process. Company is continuousLy improving and evoLving its operationaL practices to reduce the uncLaimed amounts pertaining to Fixed Deposits.

Pursuant to the provisions of Section 186(4) of the Act, details with regard to the investments made by the Company, as appLicabLe, are given in Note no. 51 (iv) o1 the Standalone financial statements, forming part o1 this Annual Report.

Achievements

Awards/Recognitions received by your Company

during the year are enumerated hereunder:

CSR

¦    Honoured with the Best CSR Initiative & Best Financial Inclusion Initiative Award at the prestigious DNA Awards 2024.

¦    Mahindra Finance's 'Swabhimaan' initiative was honoured with the CSR Project of the Year Award 2023-24 at the India CSR Summit & Awards.

Human Resources

¦    Awarded for its 'Transformational Leadership Development Program' in the category of 'Best Learning & Development Program of the Year- NBFC/HFC/MFI' at the ETBFSI ExceLLer Awards 2024.

¦    Recognised as one of the best workplaces in the categories of 'Top rated Large Company' & 'Top rated financiaL services Company' at the AmbitionBox EmpLoyee Choice Awards 2024.

¦    Awarded "Bombay's WOW WorkpLace Award 2025” for out commitment to buiLding an inspiring, empLoyee-first workpLace.

¦    Recognised as the 'Best NBFC in TaLent & Workforce' at the 29^th Edition of Best Banks and NBFCs Awards organised by Business Today.

Marketing

¦    Awarded for content fiLm 'Main SambhaaL Lungi' in the category of Community Connect at the e4m Do Good Awards.

¦    Won the 'Location-Based Marketing Campaign of the Year' award at the e4m Indian DigitaL Marketing Awards 2024.

Sustainability

¦    Ranked 1^st at BW Business WorLd India's Most SustainabLe Companies 2024 in the FinanciaL Services and Insurance Sector.

¦    Won the GoLd Award for Education and SkiLLs DeveLopment and won the Bronze Award for EnvironmentaL SustainabiLity' at the ACEF Asian Business Leaders Awards 2024.

¦    Mahindra Finance has increased its Dow Jones SustainabiLity Index (DJSI) score to '50' becoming best-in-cLass for Listed NBFCs in India.

Employee Stock Option Scheme- 2010 and Restricted Stock Unit Plan- 2023

With a view to continue the practice of rewarding performance of the empLoyees, creating ownership culture and to retain, motivate and attract taLent in Light of growing business your Company has adopted Restricted Stock Unit PLan nameLy 'Mahindra and Mahindra FinanciaL Services Limited-Restricted Stock Unit PLan 2023' ("MMFSL RSU PLan-2023”) and Mahindra & Mahindra FinanciaL Services Limited EmpLoyees' Stock Option Scheme-2010 ("2010 Scheme”).

During the year under review, your Company granted 6,49,326 Restricted Stock Units ("RSU's”) to the eLigibLe empLoyees under MMFSL- RSU PLan 2023. No options were granted under the Mahindra & Mahindra FinanciaL Services Limited EmpLoyees' Stock Option Scheme-2010 ("2010 Scheme”).

The Company does not have any scheme to fund its empLoyees to purchase the shares of the Company.

The 2010 Scheme and the MMFSL RSU PLan - 2023 of the Company is in compLiance with the Securities and Exchange Board of India (Share Based EmpLoyee Benefits and Sweat Equity) ReguLations, 2021 ("SBEBSE ReguLations”) and there were no amendments to the aforesaid Scheme and PLan during FY2025. A Certificate from M/s. KSR & Co, Company Secretaries, LLP, SecretariaL Auditor of the Company for FY2025, certifying that the Company's above-mentioned Scheme and PLan have been impLemented in accordance with the SBEBSE ReguLations and the resoLution passed by the Members, wouLd be made avaiLabLe for inspection by the Members through eLectronic mode at the AnnuaL GeneraL Meeting ("AGM”) scheduLed to be heLd on 22^nd JuLy 2025.

The appLicabLe discLosures as stipuLated under SBEBSE ReguLations for the year ended 31^st March 2025, with regards to the 2010 Scheme, MMFSL RSU PLan 2023 and Company's stock option trust is upLoaded on the Company's website and can be accessed at the web-Link: https://www.mahindrafinance.com/investor-reLations/ financiaL-information#annuaL-reports .

In terms of reguLation 46(2)(za) of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015, the Company has upLoaded 2010 Scheme and MMFSL RSU PLan-2023 on its website and the same can be accessed at https://www.mahindrafinance.com/ investor-reLations/discLosures-under-reguLation-46-and-62-of-sebi-Lodr

Environment, Social and Governance Sustainability Vision

Mahindra Finance has estabLished its sustainabiLity mission through a board-approved sustainabiLity poLicy that buiLds on the Mahindra Rise principLes of 'Rise for a More Equal World', 'Rise to Be Future Ready' and 'Rise to Create VaLue'. The focus of FY2025 was to Lay the brickwork for Long-term initiatives aLigned to the above three principLes whiLe buiLding capacity of internaL stakehoLders to integrate sustainabiLity practices into the business operations. The priority areas for sustainabiLity integration into the business ethos was cLimate change, innovative energy transition, incLusive poLicies, and stakehoLder engagement.

Climate Change

CLimate change management at Mahindra Finance has a two-pronged approach - (1) protection of Mahindra Finance assets and offices from increased probabiLity of extreme cLimate events and (2) reduction of the carbon footprint across the vaLue chain.

1)    Mahindra Finance undertook a cLimate change scenario anaLysis for the 1350+ offices of the company to understand impact from extreme cLimate events (fLood, drought and cycLonic events) in a worst-case scenario. The resuLts of the scenario anaLysis were pubLished in the previous Integrated Report and a comprehensive cLimate action pLan was deveLoped in-house for offices in highLy prone areas. The action pLan defines processes for stabiLizing existing office structures, creating earLy warning systems for cLimate hazards, estabLishing disaster management infrastructure and integrating cLimate hazard risk in the audit checkLists for new faciLities and periodic audits.

Mahindra Finance has aLso initiated a study to map the existing vehicLe and tractor financing portfoLio with cLimate hazard prone areas. The piLot study wiLL be integrated into the FY2026 cLimate strategy to de-risk the company from increased cases of defauLt and non-performing assets due to extreme cLimate events. The piLot study wiLL then be roLLed out for other business verticaLs of Mahindra Finance.

2)    The Long-term targets for reduction of the carbon footprint across the vaLue chain was decLared through Science Based Targets Initiative (SBTi) in FY2023 and defined in the previous Integrated Report. The targets focus on a 50.4% reduction in direct emissions (Scope 1) and indirect emissions (Scope 2) as of FY2032 compared to the baseLine vaLues determined in FY2023. The targets aLso incLude a 58.1% reduction in indirect emissions (Scope 3) across the same timeLine for specific activities in the vaLue chain - purchased goods

and services, business traveL, empLoyee commute, waste generation, and purchased capitaL goods. SustainabiLity initiatives in FY2025 focused primariLy on waste reduction through 100% recycLing of waste streams and energy transition that has resuLted in a ~20% reduction of energy usage compared to FY2023 baseLine vaLues. The efforts have resuLted in a net reduction of absoLute scope emissions (scope 1-3) by 11,300+ tonnes CO₂ compared to previous year.

Innovative Energy Transition

Mahindra Finance has buiLt on the energy reduction initiatives that had been commissioned in FY2023 incLuding 100% conversion to Light emitting diodes (L.E.D.), procurement of 5* energy saving air conditioners, soLar-powered air conditioners, and instaLLation of brushLess DC motor (BLDC) fans. A piLot program for the purchase of green energy at the Mahindra Finance corporate office in KurLa, Mumbai was initiated in November 2024 with intentions to expand across other Mahindra Finance offices in Locations where the reguLatory Landscape permits the purchase of green tariffs. The above energy initiatives have contributed to reduced energy costs, reduced emissions from purchase of grid-based energy (Scope 2) and use of newer safer technoLogy in active office buiLdings.

Inclusive Policies

Mahindra Finance announced its membership to the United Nations GLobaL Compact (UNGC) in FY2024 to show its commitment to human rights, good working conditions and ethicaL practices in the workpLace. In FY2025, a Human Rights Due DiLigence (HRDD) study was commissioned to evaLuate the human rights poLicies and procedures, conduct consuLtations with empLoyees across LeveLs to determine on-ground impLementation of these procedures, review efficacy of data privacy programs and extension of the above to major suppLiers in the vaLue chain. The resuLts of the study wiLL be impLemented in FY2026 to strengthen the human rights process across the Mahindra Finance vaLue chain.

Training programs on the human rights topics was expanded to the entire workforce in FY2025 incLuding the incorporation of these topics in the empLoyee induction and refresher programs. Diversity, equity & incLusion (DE&I) programs were expanded in FY2025 to incLude impactfuL gender representation initiatives, LocaLized EmpLoyee Resource Groups (ERGs), progressive poLicies fostering workpLace equity, and focused empLoyee sensitization efforts to promote an incLusive cuLture.

Looking Forward to FY2026 on Sustainability

The focus of FY2026 is to buiLd on sustain ability initiatives that have commissioned in FY2025 and to better integrate sustainabiLity into the business operations. A dedicated sustainability department has been created in FY2025 to ensure adequate allocation of resources for the long-term sustainability vision and to increase senior management oversight on the topic. The mandate of the CSR board sub-committee has been expanded in the latter half of FY2025 to incorporate updates on the sustainability performance of the company and to approve sustainability policies and procedures. Operational committees with key departments including HR, risk and finance are being formulated in FY2026 to ensure integration of sustainability topics in day-to-day management. The process of integrating Environment, Social and Governance (ESG) risk management into the business loan cycle is being developed to align with global expectations on a sustainable investment strategy.

A big focus of the next financial year is to align with the Mahindra Rise commitment of "Making Sustainability Personal” by creating training and capacity building programs for internal and external stakeholders to better understand and integrate sustainability in business as usual. Standard Operating Procedures ('SOPs') and digital tools are being evaluated to standardize sustainability reporting methodologies and ease the process of data gathering and reporting. Training programs are being developed in parallel for department heads to understand global trends in sustainability and to be able to efficiently integrate the topic in their functional responsibilities on a day-today basis.

Social Initiatives - Diversity, Equity, and Inclusion ("DE&I")

Diversity, Equity, and Inclusion (DE&I) remain central to Mahindra Finance's vision of fostering a workplace that values and empowers every individual. In FY2025, focused efforts were made to address gender gaps, promote equity, and embed inclusive practices across the organization, with a commitment to continued progress in the years ahead.

¦ Empowering Women:

Initiatives like Prarambh provided specialized training to women from Tier III and Tier IV cities, resulting in over 150 hires in frontline roles. The SOAR Program enabled women professionals to return to impactful roles after career breaks with support enabled through carefully crafted mechanisms. Focused recruitment drives across

50+ locations introduced diverse talent into key positions across branches.

¦    Progressive Policies:

Policies such as maternity transition support, IVF reimbursement, menstrual wellness, caregiving assistance, and gig working opportunities were enhanced to create equitable opportunities and address the evolving needs of the workforce.

¦    Fostering inclusion:

Inclusion-focused programs like MWoW (Mahindra Finance World of Women) established 7 regional ERGs to address hyper-local challenges and create platforms for growth and engagement. Initiatives like Perspective Building, Spectrum'24 - Inclusion Week, which engaged over 5,000 employees, and sensitization workshops such as Beat the Bias, Leading as an Ally, drove awareness and allyship across teams.

¦    Recognition and Future focus:

Mahindra Finance was awarded the Mahindra Group Rise Award for its DE&I efforts. Participation in forums and thought leadership platforms reinforced the organization's commitment to driving systemic change and fostering inclusive growth.

Looking ahead, DE&I will continue to be a key focus area, with plans to scale initiatives, deepen impact, and build a workplace that reflects Mahindra Finance's purpose-driven approach to empowering lives and communities.

Stakeholder Engagement

A stakeholder engagement program has been defined and disclosed in the previous Integrated Reports. During FY2025, the stakeholder engagement program focused on two stakeholder groups namely, local communities and customer interface teams.

Mahindra Finance understands the importance of effectively managing the customers and provide a seamless experience. To address this the Company has undertaken strong steps in call centre management, which is now available 365 days (except national holidays) and serves 10 different languages. Your Company has also undertaken skill upgradation training programs for customer facing staffs to help address queries seamlessly. A dedicated centralised resolution team has also been created to provide bureau related concerns with less turnaround time. Through these initiatives, your Company aims to increase the customer satisfaction index and address customer queries in a shorter period of time.

Business Responsibility and Sustainability Report

Your Company continued to uphold a high standard of regulatory compliance and transparency through disclosure of sustainability initiatives in the public domain. In compliance with Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has disclosed its Business Responsibility and Sustainability Report ("BRSR”) for the previous two financial years as part of its Integrated Report ("IR”). Your Company has increasingly disclosed data on 'leadership indicators' in BRSR over the last three years and is currently reporting on all leadership parameters defined in the nine principles of 'BRSR Section C Principle Wise Performance Disclosure.'

Your Company subscribes to the Dow Jones Sustainability Index ("DJSI”) program where it has achieved a score of '50' in FY2024 that is best-in-class when compared to other listed NBFCs in India.

Governance

Your Company's sustainability team has foflowed two environmental and social (E&S) scorecard methodologies in FY2025 - risk management and outcome-based performance matrices. The E&S risk management scorecard has been integrated into the Internal Capacity Adequacy Assessment Process (ICAAP) with modules related to ESG policy, sustainability roadmap, exclusion list principles, carbon reduction, energy transition, climate transition risk management and audit scope parameters. Additionally, a business scorecard is developed for the sustainability team that focuses on scope emission reduction targets, supply chain engagement and Mahindra Group collaboration. The score from the above processes is also integrated into the CXO compensation matrix for the financial year to ensure senior management oversight on sustainability issues.

Your Company engages with the larger Mahindra Group resources through a quarterly 'Sustainability Council' where challenges and opportunities across the group are discussed and commonalities are jointly addressed. The Sustainability Council also provides an opportunity for cross-training of sustainability personnel and sharing of case studies. An independent agency within Mahindra Group - Mahindra Institute of Quality (MIQ), independently reviews the performance of Mahindra Finance sustainability policies and procedures.

Integrated Reporting

Your Company is pleased to present its holistic performance for FY2025, in the Integrated Report of the Company. This report includes details such as

the organisation's strategy, governance framework, performance and prospects of value creation based on the six capitals- Financial, Manufactured, Intellectual, Human, Social & Relationship and Natural capital.

Corporate Social Responsibility (CSR)

Established in 1991, Mahindra Finance, a leading NBFC is a proud partner of India's growth, taking financial services to the farthest corners of the country. We are continually adapting to the evolving needs of our customers, leveraging technology and our strategic partnerships to widen the ambit of and access to financial services while remaining committed to our social responsibility. Led by our #TogetherWeRise ethos, we build abiding relationships of trust with our communities and strives to become an asset in the communities where we operate. Your Company's Corporate Social Responsibility (CSR) initiatives focus on areas, namely Education & Livelihood, Healthcare and Environment. We believe in providing opportunities to the underprivileged communities to enable them to rise by designing the areas of interventions that are aligned with the Company's purpose to drive positive change in the lives of our communities. Together, we are paving the way for a brighter tomorrow for all.

1. CSR Committee

Your Company has duly constituted a CSR Committee in accordance with Section 135 of the Companies Act, 2013 to assist the Board and the Company in fulfilling the corporate social responsibility objectives of the Company. The Committee presently comprises of the following Directors as on 31^st March 2025:

Name	Category
Mr. Diwakar Gupta (Chairperson)*	Independent Director
Mr. Vijay Kumar Sharma**	Independent Director
Mr. Raul Rebello***	Managing Director & CEO

* Mr. Dhananjay Mungale ceased to be member and the Chairperson of the CSR Committee with effect from 23^rd July 2024. Mr. Diwakar Gupta was appointed as the member and the Chairperson of the Committee with effect from 24^th July 2024.

** Mrs. Rama Bijapurkar ceased to be member of the CSR Committee with effect from 23^rd July 2024. Mr. Vijay Kumar Sharma was appointed as the member of the Committee with effect from 24^th July 2024.

*** Mr. Ramesh Iyer ceased to be member of the Committee upon superannuation with effect from 29^th April 2024. Mr. Raul Rebello was inducted as the member of the Committee with effect from 30^th April 2024.

• During the year under review, 3 CSR Committee Meetings were heLd, details of which are provided in the Corporate Governance Report. The CSR Committee inter-aLia, reviews and monitors the CSR as weLL as BRSR activities. During the year under review, the terms of reference of CSR Committee were enhanced to specificaLLy include enhanced review of Environment, Social and Governance aspects ("ESG”).

2.    CSR Policy

The CSR PoLicy outLines the approach and guidance provided by the Board, basis recommendation of CSR Committee, for undertaking CSR Projects and Lays down the guiding principles for seLecting, implementing and monitoring CSR projects incLuding AnnuaL Action PLan. The PoLicy outLines CSR thrust areas, which aLign with the Mahindra group core purpose of driving positive change in the Lives of the communities. Company endeavors to create sociaL, economic and environmentaL change by investing in projects that promotes education, skiLL training, heaLth care, sanitation, environmentaL sustainabiLity, financiaL Literacy etc.

The CSR PoLicy incLuding a brief overview of the projects or programs undertaken by the Company can be accessed the same on the website of the Company at:

https: // www.mahindrafinance.com/ investor-reLations/poLicy-and-sharehoLder-information#mmfsL-poLicies

3.    CSR Initiatives

Key CSR Achievements for FY2025

(i) 'Dhan Samvaad'- CSR Flagship Program

Your Company has Launched CSR flagship program "Dhan Samvaad” which addresses a criticaL need among gig workers and nano, micro-enterprises, who often Lack access to formaL financiaL education and digitaL tooLs. By bridging this knowLedge gap, the initiative aims to foster financiaL incLusion and enhance the economic resiLience of this vitaL segment of the workforce.

The comprehensive program covers a wide range of topics, incLuding banking basics, savings strategies, e-waLLet usage, investment fundamentaLs, insurance principLes, and key government schemes. Through a combination of interactive workshops, onLine moduLes, and hands-on training, participants gained practicaL skiLLs to manage their finances effectiveLy in the digitaL era.

The program aLso focused on raising awareness as weLL as increased Linkages about reLevant centraL and state LeveL government schemes for amongst targeted beneficiaries whiLe providing information and hands-on support for using digitaL tooLs Like Digi Locker.

Dhan Samvaad is a significant effort to empower individuaLs and smaLL businesses with the financiaL knowLedge necessary for sustainabLe deveLopment. This program pLayed a cruciaL roLe in creating a more financiaLLy savvy and digitaLLy empowered community, uLtimateLy contributing to India's economic progress. Resources used during the program are aLigned with the Reserve Bank of India (RBI)'s FinanciaL IncLusion and DeveLopment program.

Major highLights of the Dhan Samvaad program incLudes,

¦    TotaL outreach - 2,07,700+ beneficiaries educated on financiaL and digitaL Literacy, boosting their digitaL and financiaL skiLLs

¦    77,800+ of the totaL outreach (37%) are Women Entrepreneurs: EnabLing Women Entrepreneurs

¦    1,57,000+ (76%) individuaLs enhanced digitaL identity by adopting the Digi Locker app.

¦    1,37,000+ (66%) individuaLs were Linked with different Government sociaL security schemes nameLy PMSBY, PMJJBY, E- Shram Card, Sukanya Samriddhi Yojna, Udyam Registration, AtaL Pension Yojana etc.

¦    Covered 40+ Districts, 7 States reaching diverse communities.

(ii) Saksham Scholarship Project

Saksham SchoLarship for underpriviLeged students is an initiative to provide financiaL assistance to underpriviLeged chiLdren to support them in continuing their education.

The project beLieves in empowering the academic and career goaLs of chiLdren by removing the financiaL barrier. The schoLarship is open for students from muLtipLe states across India. Students studying in CLasses 1 to 12, graduation, and post-graduation LeveLs are eLigibLe. In FY2025, your Company provided Saksham SchoLarship to around 2,960+ schoLars.

(iii)    E/Auto Rickshaw driving training for women

Your Company continued E/Auto Rickshaw driving training for women. Under this project, eLigibLe women were supported with skiLL training to drive an auto/ E auto/ UtiLity vehicLe and heLp them obtain LiveLihood opportunities. ALong with the vehicLe driving skiLLs, women were supported to obtain driving Licenses. SeLf-defence skiLLs, interpersonaL skiLLs and financiaL and digitaL skiLLs were aLso imparted as part of this project. Further women were encouraged to take to the jobs as chauffeurs and seLf-empLoyment.

In FY2025, your Company trained 550+ women through this project from Madhya Pradesh, TamiL Nadu and Puducherry. These women received permanent driving License aLong with LeveL 4 SkiLL India Certificate and pLacement Linkages.

(iv)    Employability skills training project

This project creates a cadre of workforce with essentiaL empLoyabiLity skiLLs incLuding domain knowLedge and soft skiLLs. Provided skiLL training to youth for BCBF (Business Correspondent & Business FaciLitator) and iTES-BPO (Information TechnoLogy EnabLed Services) and make them job ready and resiLient for the future and improve their LiveLihood.

In FY2025, your Company provided empLoyabiLity skiLLs training to 210+ candidates in Mumbai, Maharashtra aLong with pLacement Linkages to 170+ candidates.

(v)    Nanhi Kali

Project Nanhi KaLi provides skiLLs training to girLs studying in Grades 6 to 10 thereby heLping them to make a smoother transition from schooL to the workpLace.

The program focuses on honing essentiaL skiLLs, encompassing financiaL Literacy, digitaL skiLLs, soft skiLLs such as criticaL thinking and communication, and fostering an understanding of gender reLations. This wiLL be deLivered during schooL hours.

It aLso focuses on physicaL education moduLes wherein a professionaLLy designed sports education moduLe excLusiveLy for girLs gives them an opportunity to participate in reguLar fitness activities thereby promoting their weLLbeing. The program further heLps buiLd Leadership skiLLs and teamwork whiLe striving for exceLLence through sports.

Your Company supported the education of 14,630 Nanhi KaLis from Secondary schooL (CLass 6 to 10)

for the academic year 2024-25 across 12 districts from 5 states in India.

(vi)    Mahindra Pride Classroom (MPC)

Your Company continued its support to Mahindra Pride CLassroom (MPC) project to reach out to marginaLised women to create job opportunities in various sectors and enabLe women to become financiaLLy independent and participate activeLy in the workforce.

Under this program, we conducted minimum 40 hours training for 47,800+ finaL year femaLe students in cLassrooms across government/ government aided coLLeges, poLytechnics, industriaL training institutions, empLoyer premises etc. to enhance their empLoyabiLity prospects. The moduLar MPC training program focusses on Life, Language and aptitude skiLLs. To faciLitate students who have been trained in the MPC are pLaced with organizations working in their core trade/ domain an innovative, tech-enabLed job drive, known as 'Job Utsav' is conducted to bring together the best empLoyers and a great taLent pooL trained under the MPC program.

(vii)    Mahindra Pride Skill centers (MPSC)

You Company continued its support to MPSC which are specificaLLy designed to economicaLLy empower women through training in domain and empLoyabiLity skiLLs. The major trades covered are ITES, retaiL, hospitaLity, BFSI and other sectors. By addressing the unique requirements of the job market and emphasizing the deveLopment of both technicaL and soft skiLLs, the modeL aims to equip women with the knowLedge, skiLLs and confidence needed to succeed in their careers. As part of this initiative, 1,000 women were trained under IT / ITES, retaiL, coding, hospitaLity, TaLLy, IT & GST and 80% of the trained women supported in securing a gainfuL empLoyment.

(viii)    Project Hariyali

With an aim of sustainabLe environment, your Company promoted pLantation of trees which provides green cover as weLL source of LiveLihood to farmers/LocaL communities.

In FY2025, your Company pLanted 77,000 sampLings on around 570 farmer's Land from 30 viLLages in two districts in Gujarat. The pLantation incLudes a mix of native and fast-growing species Like Teak, Mahagony, Bamboo, Drumstick, AonaLa, Mango, Neem etc. which enhance carbon sequestration and improve LocaL biodiversity.

Additionally, it provides income sources for small and marginal, farmers through sustainable forestry. Further it engages communities in environmental stewardship and raises awareness about climate change.

Also, your Company supported the maintenance (nurturing and caring) and survival, of previously planted saplings in the Financial Year 2023-24 and 2022-23 as part of Project Hariyali in the Araku region, Andhra Pradesh.

(ix)    Water Conservation Project

As part of Environmental Sustainability, your Company has been championing the water conservation cause over 3 years in the remote tribal areas of Murbad and Shahapur blocks in Thane district, Maharashtra. Through these consistent efforts, over 8.7 crore litres of water have been conserved, ensuring access to water for household and agriculture purpose, enabling farmers to take multiple crops.

In FY2025, your Company made Investment in sustainable water resource management projects such as construction of 11 Rainwater Harvesting Structures in zilla parishad schools conserving over 0.46 crore Liters of water. Built/repaired 3 check dams and desilting of a Lake, creating potential to save over 2.45 crore liters of water in the surrounding areas. Through this project, we expect to consere 2.91 crore litres of rainwater for irrigation, ensuring water accessibility round the year for household and farming purpose, thus enabling farmers to take up 2-3 crops in a year and supporting 2,800 beneficiaries.

(x)    Project Sehat

In the area of healthcare, your Company organized nationwide blood donation drives in which 4,279+ Blood Units were collected, Pan India. Your Company also conducted 2 health camps, benefiting 300 individuals.

Employees Volunteering

Your Company has consistently fostered a culture of social responsibility by encouraging employees to actively participate in diverse CSR initiatives, driving meaningful change within the community. During the reporting period, over 23,250 employees—an impressive 91% of the workforce—dedicated more than 1,10,600 person-hours to numerous impactful virtual and physical CSR initiatives. These initiatives included life-saving Blood Donation drives, transformative Swachh Bharat campaigns, and empowering programs like Samantar, Sehat, and Gyandeep. Through these efforts, your

company has reaffirmed its unwavering commitment to creating a positive and lasting impact on society.

Stakeholder Engagement - In FY2025, your company organized the "Partner Meet” on 11^th February 2025, bringing together 28 representatives from 15 implementation partners for a day dedicated to collaboration, networking, and knowledge sharing. This impactful stakeholder engagement provided an invaluable opportunity to strengthen partnerships, interact with senior management, and exchange best practices among diverse implementation partners, fostering collective growth and innovation.

During the event, your Company celebrated excellence by honoring four of its partners (NGOs) with the prestigious title of "Best CSR Implementation Partners 2025,” while extending tokens of appreciation to the remaining partners, acknowledging their remarkable contributions. Furthermore, the meet featured a capacity-building workshop on "Appreciative Inquiry -A Tool for Personal and Organizational Effectiveness,” equipping attendees with transformative strategies to enhance their impact. This initiative underscores your company's unwavering commitment to driving meaningful collaboration and empowering its partners to achieve greater success in CSR implementation.

4.    CSR Spend

As per the provisions of Section 135 of the Companies Act, 2013 ("the Act”) read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules”), the mandatory CSR spend of the Company for FY2025 was ' 34.58 Crore against which your Company has spent ' 34.61 Crore during the year. Your Company has fully spent unspent CSR amount of FY 2024 towards ongoing program on Financial & Digital Literacy Project., details whereby are given in "Annexure I" of this report.

Further, in terms of the CSR Rules, the Chief Financial Officer of the Company has certified that the funds disbursed have utilised for the purpose and in the manner approved by the Board for FY2025.

5.    Annual Report on CSR Activities

The Annual Report on the CSR activities undertaken by your Company during the year under review, as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is set out in "Annexure I" of this Report.

6.    Impact Assessment of CSR Projects

In compliance with the provisions of Section 135 of the Companies Act 2013 read with sub-rule (3) of rule 8 of the Companies (Corporate Social Responsibility

Policy) Rules, 2014, impact assessment has been carried out for the following eligible projects:

CSR projects pertaining to FY2022 requiring Impact Assessment

¦    Nanhi Kali

¦    Mahindra Pride School & Classrooms

¦    Women economic empowerment

CSR projects pertaining to FY2023 requiring Impact Assessment

¦    Swabhimaan

Your Company had engaged independent agencies to carry out the impact assessment for the aforesaid projects. The Executive Summary of the Impact Assessment Reports, with respect to the abovementioned eligible CSR projects of FY2022 and FY2023, is annexed with "Annexure I" of this Report and the complete Impact Assessment Report of the applicable projects can be accessed at the web-link https://www.mahindrafinance.com/ together-we-rise#csr-reports.

Additionally, your Company has been proactively conducting an impact assessments of the selected CSR projects on a voluntary basis to evaluate the effectiveness. As a testament to its commitment to exemplary corporate governance, the Company also undertakes voluntary financial audits to ensure transparency and accountability.

The executive summary and web-links of impact assessment reports with respect to Company's CSR projects undertaken in FY2024 which meet the prescribed criteria, will be provided once the same are completed.

Cyber Security

Your Company has made significant strides in bolstering organization's cybersecurity framework to safeguard both internal and customer data. In an era where digital threats are increasingly sophisticated, we have prioritized the implementation of robust measures to ensure the integrity, confidentiality, and availability of critical information assets.

To enhance your organization's defence, we have deployed a suite of advanced cybersecurity tools tailored to address current and evolving risks. These include systems to prevent unauthorized data exfiltration, comprehensive threat detection and response mechanisms, real-time monitoring and analysis solutions, protective measures for our online assets, and solutions to secure our mobile endpoints. These tools collectively form a multi-layered shield around our digital infrastructure and processes.

In addition, your Company has established a 24/7 Security Operations Centre (SOC) dedicated to monitoring cybersecurity alerts and responding to incidents immediately to initiate remedial measures.

This ensures that potential threats are identified and mitigated swiftly, minimizing any risk to our operations or data.

Your Company has also significantly improved, organization's vulnerability management process by automating scanning and remediation efforts. By leveraging industry-leading scanning and patching tools, we have streamlined the identification and resolution of vulnerabilities, thereby enhancing our overall security posture.

To validate the effectiveness of these investments, management is also conducting Red Team assessment by an external certified entity. These proactive assessments test your organization's cyber defences under real-world conditions, ensuring that the tools and processes we have implemented deliver the expected resilience and protection.

These enhancements reflect our unwavering commitment to safeguarding the trust placed in us by our customers, partners, and you, our shareholders.

Annual Return

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with rule 11 and 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return in Form No. MGT-7, is available on the Company's website and can be accessed at the web-link https://www.mahindrafinance.com/investor-relations/financial-information#annual-reports .

Board & Its Committees Board

Your Company recognises and embraces the importance of a diverse Board in its success. The confluence of Directors on the Board with different knowledge and skills, perspective, regional and industry experience, cultural and geographical background ensures that your Company retains its competitive advantage.

As on 31^st March 2025, the Board of your Company consisted of 8 Directors comprising of a Non-Executive Chairperson, 1 Executive Director, 2 Non-Executive NonIndependent Directors and 4 Independent Directors, of whom 1 is a woman Director.

Committees constituted by the Board of Directors

The Board Committees are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

 

The details of the Board Committees aLong with their composition, powers, terms of reference, etc. are given in the Report on Corporate Governance, which forms part of this Annual Report.

Audit Committee

As on 31^st March 2025, the Audit Committee comprised of 3 Independent Directors and 1 Non-Executive NonIndependent Director:

Name	Category
Mr. Diwakar Gupta	Chairperson of the Committee (Independent Director)
Mr. MiLind Sarwate	Independent Director
Mr. Vijay Kumar Sharma	Independent Director
Mr. Amarjyoti Barua	Non-Executive Non- Independent Director

Changes in Audit Committee Members during FY2025:

¦    Mr. Dhananjay MungaLe, Mrs. Rama Bijapurkar ceased to be Member of the Committee effective 23^rd July 2024 and Mr. Chandrashekhar Bhave ceased to be Chairperson and Member(s) of the Committee effective 2^nd February 2025; upon completion of their 2^nd term as Independent Director(s) of the Company.

¦    Mr. Diwakar Gupta was appointed as Chairperson of the Committee w.e.f 3^rd February 2025.

The composition of Audit Committee is in compliance with the minimum requirement prescribed under the Act, Securities and Exchange board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended and the Master Direction - Reserve Bank of India (Non-Banking FinanciaL Company - ScaLe Based Regulation) Directions, 2023 of having a minimum of two-thirds of independent directors, incLuding the Chairperson. ALL members of the Committee are nonexecutive directors possessing financiaL Literacy, and expertise in accounting or financiaL management reLated matters.

During the year under review, 11 Audit Committee Meetings were heLd. Further, the terms of reference of the Audit Committee were enhanced during the year under review to specificaLLy incLude review of compLiances under RBI directions/ circuLars/ guideLines, review of POSH Report and its poLicy, information security audit/ poLicy etc. ALL the recommendations of the Audit Committee were approved and accepted by the Board during the year under review.

Meetings and Postal Ballot

The Board of Directors met 9 times during the year under review i.e., on 23^rd April 2024, 4^th May 2024, 7^th June 2024, 23^rd JuLy 2024, 13^th September 2024,

22^nd October 2024, 28^th January 2025, 13^th February 2025 and 24^th March 2025, as against the statutory requirement of at Least four meetings. The requisite quorum was present at aLL the Board Meetings. The maximum time gap between any two Meetings was not more than one hundred and twenty days. These Meetings were weLL attended. The 34^th AGM of the Company was heLd on 23^rd JuLy 2024 through Video Conference.

During the year under review, no Extraordinary GeneraL Meeting ("EGM") of the Members was heLd and no resoLution was passed by the Members through PostaL BaLLot.

DetaiLed information on the Meetings of the Board, its Committees, and the AGM is incLuded in the Report on Corporate Governance, which forms part of this AnnuaL Report.

A caLendar of aLL the meetings is prepared and circuLated weLL in advance to the Directors.

Meetings of Independent Directors

The Independent Directors met twice during the year under review, on 24^th September 2024 and 24^th March 2025. The Meetings were conducted without presence of the WhoLe-time Director(s), the NonExecutive Non-Independent Directors, Chief FinanciaL Officer or any other Management PersonneL to enabLe the Independent Directors to discuss matters pertaining to, inter-aLia, review of performance of NonIndependent Directors and the Board as a whoLe, review the performance of the Chairperson of the Company, assess the quaLity, quantity and timeLiness of flow of information between the Company Management & the Board and its Committees and free flow discussion on any matter that is necessary for the Board to effectiveLy and reasonabLy perform their duties.

Directors and Key Managerial Personnel

Appointment/Re-appointment of Directors during FY2025 and up to the date of this report

¦ Re-appointment of Mr. Milind Sarwate (DIN: 00109854) as an Independent Director

Basis approvaL /recommendation of the Nomination and Remuneration Committee ("NRC") and the Board, the members of the Company have at the AnnuaL GeneraL Meeting heLd on 28^th JuLy 2023, approved the re-appointment of MiLind Sarwate (DIN: 00109854) as Independent Director of the Company for a second term of five consecutive years each, commencing from 1^st April 2024 to 31^st March 2029 (both days incLusive) not LiabLe to retire by rotation.

¦    Appointment of Mr. Raul Rebello (DIN: 10052487) as the Managing Director & CEO

Basis recommendation/ approvaL of NRC and the Board of Directors, the Members of the Company had approved appointment of Mr. RauL RebeLLo (DIN: 10052487), as the WhoLe-time Director and KMP designated as Executive Director and MD & CEO-designate with effect from 1^st May 2023 to 29^th ApriL 2024 (both days incLusive) and as the Managing Director & CEO of your Company with effect from 30^th ApriL 2024 up to 30^th April 2028 (both days incLusive), LiabLe to retire by rotation.

Mr. RauL RebeLLo assumed the position of "Managing Director & CEO" of the Company w.e.f., 30^th April 2024, after superannuation of Mr. Ramesh Iyer, Vice-Chairman and Managing Director of the Company effective cLose of business hours of 29^th ApriL 2024.

¦    Appointment of Mr. Vijay Kumar Sharma (DIN: 02449088) as an Independent Director

Pursuant to the recommendation of the NRC and basis approvaL of the Board of Directors of the Company, the members of the Company have at the AnnuaL GeneraL Meeting heLd on 23^rd JuLy 2024, approved appointment of Mr. Vijay Kumar Sharma (DIN: 02449088) as an Independent Director for a term of 5 consecutive years with effect from 15^th May 2024 to 14^th May 2029 (both days incLusive), not LiabLe to retire by rotation.

Cessation of Directors

¦    Upon attaining superannuation, Mr. Ramesh Iyer (DIN: 00220759) ceased to be the Vice-Chairman & Managing Director of your Company effective cLose of business hours of 29^th ApriL 2024.

¦    Mr. Dhananjay MungaLe, (DIN: 00007563) and Mrs. Rama Bijapurkar (DIN: 00001835) ceased to be Independent Director(s) of your Company effective cLose of business hours of 23^rd JuLy

2024,    upon compLetion of their second term of 5 consecutive years each as Independent Director(s) of the Company.

¦    Mr. Chandrashekhar Bhave (DIN: 00059856) ceased to be the Independent Director of your Company effective cLose of business hours of 2^nd February

2025,    upon compLetion of his second term of 5 consecutive years each as an Independent Director of the Company.

The Board of Directors pLaces on record its deepest appreciation for the exempLary contribution, strategic foresight, innovative thinking, and steadfast commitment to exceLLence of Mr. Ramesh Iyer, which

propeLLed Mahindra Finance to great heights. The Board is confident that the Company wiLL continue its growth trajectory under the abLe Leadership of Mr. RauL RebeLLo, Managing Director & CEO.

The Board aLso pLaces on record its sincere appreciation to the vaLuabLe contribution made by Mr. Dhananjay MungaLe, Mrs. Rama Bijapurkar and Mr. Chandrashekhar Bhave during their association as Independent Directors.

During the year under review, no Independent Director of your Company resigned from the Company.

Retirement by Rotation

In terms of provisions of Section 152 of the Companies Act, 2013, Mr. Ashwani Ghai (DIN: 09733798), NonExecutive Non-Independent Director is LiabLe to retire by rotation and, being eLigibLe, has offered himseLf for re-appointment at the 35^th AnnuaL GeneraL Meeting of the Company scheduLed to be heLd on 22^nd JuLy 2025.

Re-appointment of Independent Directors

The first term of Dr. Rebecca Nugent (DIN: 09033085) as an Independent Director of the Company wiLL expire on 4^th March 2026. She is eLigibLe and has consented for re-appointment as an Independent Director for a second term of 5 consecutive years. Dr. Nugent has undertaken the onLine proficiency seLf-assessment test.

Basis the performance evaLuation report, skiLL sets, experience and substantiaL contribution made by Dr. Nugent during her 1^st term, the Board is of the opinion that Dr. Nugent hoLds high standards of integrity, expertise and experience (incLuding the proficiency). Basis recommendation of NRC, the Board of Directors have subject to approvaL of the members of the Company re-appointed Dr. Rebecca Nugent (DIN: 09033085), as an Independent Director of the Company for a second term of 5 consecutive years, w.e.f. 5^th March 2026 to 4^th March 2031 (both days incLusive), not LiabLe to retire by rotation. The necessary resoLution seeking approvaL of the members of the Company has been incorporated in the Notice of the 35^th AnnuaL GeneraL Meeting.

Fit and Proper and Non-Disqualification declaration by Directors

ALL the Directors of the Company have provided annuaL confirmation that they satisfy the "fit and proper" criteria as prescribed under Chapter XI of RBI Master Direction No. RBI/DoR/2023-24/106 DoR. FIN.REC. No.45/03.10.119/2023-24 dated 19^th October 2023, as amended, and that they are not disquaLified from being appointed/continuing as Directors in terms of Section 164 (1) and (2) of the Companies Act, 2013.

Declaration by Independent Directors

ALL the Independent Directors of your Company have given their declarations and confirmation that they fulfil the criteria of Independence as prescribed under Section 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their abiLity to discharge their duties with an objective independent judgment and without any external influence.

Further, the Board after taking these declarations/ disclosures on record and acknowledging the veracity of the same, concluded that the Independent Directors hold highest standards of integrity and possess the relevant proficiency, expertise and experience to quaLify and continue as Independent Directors of the Company and are Independent of the Management of the Company.

In terms of Section 150 of the Companies Act, 2013 read with RuLe 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by Indian Institute of Corporate Affairs, Manesar ('IICA') and the said registration is renewed and active as on the date of this report. Further, the said registration wiLL be renewed, before expiry as appLicabLe, and kept active by the Independent Directors.

The Independent Directors of the Company are either exempted from the requirement to undertake the onLine proficiency seLf-assessment test conducted by IICA or have cLeared the onLine proficiency seLf-assessment test as appLicabLe.

Key Managerial Personnel

The foLLowing persons were designated as the Key ManageriaL PersonneL ("KMP”) of your 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, as on 31^st March 2025:

1.    Mr. RauL RebeLLo, Managing Director & CEO

2.    Mr. Pradeep Kumar AgrawaL, Chief FinanciaL Officer

3.    Ms. BrijbaLa BatwaL, Company Secretary

Changes in Key Managerial Personnel

¦ Mr. Ramesh Iyer ceased to be the Vice-Chairman & Managing Director of your Company on attaining superannuation with effect from cLose of business hours of 29^th ApriL 2024.

 

Laws and that such systems were adequate and operating effectiveLy during the financiaL year ended 31^st March 2025;

Performance Evaluation of the Board

The Companies Act, 2013 ("Act”) and the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations”) stipuLate the evaLuation of the performance of the Board, its Committees, IndividuaL Directors and the Chairperson.

Your Company has formuLated a process for performance evaLuation of the Independent Directors,

 

¦    Mr. RauL RebeLLo ceased to be the Executive Director and MD & CEO Designate with effect from 29^th ApriL 2024 and assumed the office of Managing Director & CEO with effect from 30^th ApriL 2024.

¦    Mr. Vivek Karve resigned from the office of Chief FinanciaL Officer and Key ManageriaL PersonneL ("KMP”) of the Company with effect from cLose of business hours of 31^st October 2024 to pursue personaL, sociaL and professionaL interest beyond fuLL time empLoyment.

¦    In compLiance with ReguLation 26A(2) of the Listing ReguLations, Mr. Animesh Chatterjee was appointed as the Chief FinanciaL and KMP, for interim period i.e. from 29^th January 2025 tiLL 4^th March 2025.

¦    Mr. Pradeep Kumar AgrawaL was appointed as the Chief FinanciaL Officer of the Company effective 5^th March 2025.

Directors' Responsibility Statement

Pursuant to the provisions of Section 134(5) of the

Companies Act, 2013, ("the Act”) your Directors, based

on the representations received from the Operating

Management and after due enquiry, confirm that:

i.    In the preparation of the annuaL accounts for financiaL year ended 31^st March 2025, the appLicabLe accounting standards have been foLLowed and there are no materiaL departures in adoption of these standards;

ii.    They had in consultation with the Statutory Auditors seLected such accounting poLicies and appLied them consistentLy and made judgments and estimates that are reasonabLe and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March 2025 and of the profit of the Company for the year;

iii.    They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irreguLarities;

iv.    They have prepared the annuaL accounts for financiaL year ended 31^st March 2025 on a going concern basis;

v.    They have Laid down adequate internaL financiaL controLs to be foLLowed by the Company and that such internaL financiaL controLs were operating effectiveLy during the financiaL year ended 31^st March 2025;

vi.    They have devised proper systems to ensure compLiance with provisions of aLL appLicabLe

the Board, its Committees and other IndividuaL Directors which incLudes criteria for performance evaLuation of the Non-Executive Directors and Executive Directors.

An annuaL performance evaLuation exercise was carried out in compLiance with the appLicabLe provisions of the Act, Listing ReguLations, the Company's Code of Independent Directors and the criteria and methodoLogy of performance evaLuation approved by the Nomination and Remuneration Committee ("NRC") comprising of Mr. Diwakar Gupta as the Chairperson and Dr. Anish Shah, Mr. MiLind Sarwate and Mr. Vijay Kumar Sharma as its members:

The questionnaires for performance evaluation are comprehensive and in alignment with the guidance note on Board evaluation issued by the SEBI, vide its circular no. SEBI/HO/CFD/CMD/CIR/P/2017/004 dated 5^th January 2017 as amended and merged with SEBI Master Circular dated November 11, 2024 and are in line with the criteria and methodology of performance evaluation approved by the NRC.

Outcome and results of the performance evaluation

All the Directors of your Company as on 31^st March 2025 participated in the evaluation process. The Directors expressed their satisfaction with the Evaluation process. During the year under review, NRC ascertained and reconfirmed that the deployment of "questionnaire” as a methodology, is effective for evaluation of performance of Board and Committees and Individual Directors.

The evaluation outcomes for the year under review were deliberated upon at length with the Board members, Committee Chairpersons and Individual Directors. The results underscore a good level of engagement and diligence by the Board and its various committees, and by the senior leadership.

It was noted that the Board and Committee meetings are meticulously planned and conducted with efficiency, in terms of comprehensive pre-reads being sent well in advance, and constructive participation and deliberations at the meeting led by the Chair. This enabled the Board and Committees to discharge their role effectively and focus on governance and internal controls.

During the year under review, the terms of reference of the Board and Committees were revisited with a view to aligning the same with regulatory expectations, and best group and industry practices, so as to bring renewed focus on review matters.

Board members were appreciative that during the year under review, the Board and its Committees performed their role well, particularly in the areas of financial discipline, strategic direction, compliances, succession planning and performance review. Based on the outcome of the evaluation of the year under review, the Board has agreed to deepen its focus on ESG, risk management and oversight of subsidiaries, with continued focus on maintaining high standards of performance and governance, to enhance the value for all its stakeholders.

Familiarisation Programme for Directors

Your Company has adopted a structured programme for orientation of all Directors including the Independent Directors so as to familiarise them with the Company-its operations, business, industry, environment in which it

functions, Indian and global macro-economic front and the regulatory regime applicable to it. The Management updates the Board Members on a continuing basis of any significant changes therein and provides them an insight to their expected roles and responsibilities so as to be in a position to take well-informed and timely decisions and contribute significantly to the Company. The Directors are provided with all the documents to enable them to have a better understanding of the Company, its operations and the industry in which it operates.

The Independent Directors of your 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. The terms of reference of all the Committees with updations, if any, are shared with all the Board Members on a quarterly basis. Independent Directors meet the business and functional heads and provide their inputs and suggestions on strategic and operational matters at the quarterly Board/Committee Meetings.

Managing Director and Senior Management provide an overview of the operations and familiarise the Directors on matters related to the Company's values and commitments. They are also introduced to the organisation structure, constitution of various committees, board procedures, risk management strategies etc.

Strategic Presentations are made to the Board where Directors get an opportunity to interact with Senior Management. Directors are also informed of the various developments in the Company through Press Releases, emails, etc. Your Company has a secured Board portal which inter-alia provides a one stop and seamless solution for access to Board/Committee materials to all the Directors. The Board portal also contains Annual Report, Code of Conduct for Directors, terms of appointment, committee charters etc. for ease of access. This enables greater transparency to the Board processes.

Pursuant to the provisions of the Companies Act, 2013 and Regulation 25(7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations”), your Company has during the year conducted familiarization programmes through briefings at Board/ Committee meetings for all its Directors including Independent Directors.

Details of familiarization programs imparted to the Independent Directors during the financial year under review in accordance with the requirements of the Listing Regulations are available on the Company's website and can be accessed at the web-link: https://

www.mahindrafinance.com/investor-relations/policy-and-shareholder-information#familiari7ation-program and is also provided in the Corporate Governance Report forming part of this Annual Report.

Policies on Appointment of Directors and Senior Management and Remuneration of Directors, Key Managerial Personnel and Employees:

i)    Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management

In accordance with the provisions of Section 134(3)(e) of the Companies Act, 2013 ("the Act”) read with Section 178 of the Act and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations”), your Company has adopted a Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management, which, inter-alia, includes the criteria for determining qualifications, positive attributes and independence of Directors, succession planning for Directors and Senior Management, and the Talent Management framework of the Company.

During the year under review, the Policy was amended to, inter-alia align with the amendments in the Listing Regulations.

The said policy is available on the website of the Company and can be accessed at https://www. mahindrafinance.com/investor-relations/policy-and-shareholder-information#mmfsl-policies .

ii)    Policy on Remuneration of Directors and Remuneration Policy for Key Managerial Personnel, Senior Management and other Employees of the Company

Your Company has also adopted the Policy on Remuneration of Directors and the Policy on Remuneration of Key Managerial Personnel, Senior Management and other Employees of the Company in accordance with the provisions of sub-section (4) of Section 178 of the Act, Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 and Listing Regulations.

During the year under review the Policy on Remuneration of Directors of the Company was amended to, inter-alia, align with existing legal provisions, introduce certain standard clauses for better articulation.

The Remuneration Policy for Key Managerial Personnel, Senior Management and other employees was amended during the year under review to inter-alia, align with the amendments in the Listing Regulations, and provide flexibility in compensation structuring.

The said Policies are uploaded on the website of the Company and can be accessed at: https://www. mahindrafinance.com/investor-relations/policy-and-shareholder-information#mmfsl-policies

Adequacy of Internal Financial Controls with Reference to the Financial Statements

Your Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations.

Your Company uses various industry standard systems to enable, empower and engender businesses and also to maintain its Books of Accounts. The transactional controls built into these systems ensure appropriate segregation of duties, the appropriate level of approval mechanisms and maintenance of supporting records. The systems, Standard Operating Procedures and controls are reviewed by the Management.

Your Company's Internal Financial Controls are deployed through Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organisations of the Treadway Commission ("COSO”), that addresses material risks in your Company's operations and financial reporting objectives. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting ("ICFR”) issued by The Institute of Chartered Accountants of India. The risk control matrices are reviewed on a quarterly basis and control measures are tested and documented on a quarterly basis. The Company has IT systems in place making the ICFR process completely digital and strengthening the review and monitoring mechanism. Based on the assessments carried out by the Management during the year, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.

Your Company recognises that Internal Financial Controls cannot provide absolute assurance of achieving financial, operational and compliance reporting objectives because of its inherent limitations. Also, projections of any evaluation of the Internal Financial Controls to future periods are subject to the risk that the Internal Financial Control may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures

may deteriorate. Accordingly reguLar audits and review processes ensure that such systems are reinforced on an ongoing basis.

Joint Statutory Auditor's certification on internal financial controls

The Joint Statutory Auditors of your Company viz. M/s. M M Nissim & Co LLP, Chartered Accountants and M/s. M.P. ChitaLe & Co., Chartered Accountants have examined the internal financial controls of the Company and have submitted an unmodified opinion on the adequacy and operating effectiveness of the internal financial controls over financial reporting as at 31^st March 2025.

Internal Audit Framework

Your Company has in place an adequate internal audit framework to monitor the efficacy of the internal controls with the objective of providing to the Audit Committee and the Board of Directors, an independent, objective and reasonabLe assurance on the adequacy and effectiveness of the Company's processes. The internal audit approach verifies compliance with the operational and system related procedures and controls. The Internal Auditor reports to the Audit Committee of the Board.

Separate meetings between the Head of Internal Audit and the Audit Committee

Separate meetings between the Head of Internal Audit and the Audit Committee, without the presence of Management, were enabled to facilitate free and frank discussion amongst them. The meetings were held on 23^rd April 2024, 24^th September 2024 and 22^nd October 2024.

Risk Based Internal Audit ("RBIA") framework

In compliance with RBI circular dated 3^rd February 2021, the Company has in place an effective Risk Based Internal Audit ("RBIA”) Framework to review the efficacy of internaL controLs, processes, poLicies and compliance with Laws and regulations, with the objective of providing an independent and reasonabLe assurance on the adequacy and effectiveness of the organisation's internaL controL and governance processes. The framework is commensurate with the nature of the business, size, scaLe and compLexity of its operations.

The Audit Committee has approved a Risk Based InternaL Audit ("RBIA”) framework, aLong with appropriate processes and pLans for internaL audit of FY2025 and FY2026. The Risk Based InternaL Audit PLan is aLso being reviewed by the Statutory Auditors, Senior Leadership, Chief Risk Officer, Chief CompLiance Officer before being approved by the Audit Committee. The internaL audit pLan is deveLoped based on the risk profiLe of the

audit universe incLuding business activities, functions, branches, appLication systems of the organisation. The RBIA pLan incLudes process audits, branch audits and Information TechnoLogy (IT) & Information Security (IS) audits. InternaL audits are undertaken on a periodic basis to independentLy vaLidate the existing controLs.

Based on the reports of internaL audit, function/process owners undertake corrective action in their respective areas. Significant audit observations are presented to the Audit Committee aLong with agreed management action pLan. The status of the management actions and impLementation of the recommendations are tracked for aLL the observations and are presented to the Audit Committee on a reguLar basis.

Risk Management

Risk management forms an integraL part of the Company's business. Your Company has a comprehensive Risk Management PoLicy in pLace and has Laid down a weLL-defined risk management framework to identify, assess and monitor risks and strengthen controLs to mitigate risks. Your Company has estabLished procedures to periodicaLLy pLace before the Risk Management Committee and the Board of Directors, the risk assessment and minimisation procedures being foLLowed by the Company and steps taken by it to mitigate these risks.

The Risk Management PoLicy, inter-aLia, incLudes identification of eLements of Credit, OperationaL & Enterprise risk, incLuding Cyber Security and reLated risks as weLL as those risks which in the opinion of the Board may threaten the existence of the Company.

The Risk Management Committee ("RMC”) constituted by the Board manages the integrated risk and reviews periodicaLLy the Risk Management PoLicy and strategy foLLowed by the Company.

The 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. Your Company has a robust organisationaL structure for managing and reporting on risks. This risk management mechanism works at aLL the LeveLs, which acts as the strategic defence cover of the Company's risk management and is supported by reguLar review, controL, seLf-assessments and monitoring of key risk indicators.

Operational Risk Management: Your Company has impLemented an OperationaL Risk Management (ORM) PoLicy to proactiveLy manage operationaL risks. The poLicy has impLemented invoLves assessing and measuring risks, monitoring them cLoseLy, and impLementing

mitigating measures through a structured governance framework. ALL new products, processes, and changes as weLL as new financiaL outsourcing arrangements undergo thorough risk evaLuation by the OperationaL Risk team. In terms of the Latest ReguLatory guidance note on OperationaL Risk Management and OperationaL ResiLience, your Company is in compLiance with aLL the appLicabLe key themes specified.

Credit Risk Management: Your Company has successfuLLy impLemented a robust credit risk management framework, risk assessment modeLs to ensure proactive identification, mitigation, and monitoring of potentiaL credit exposures. This strategic approach enhances Company's abiLity to manage risk whiLe optimizing overaLL portfoLio performance.

In compLiance with Master Direction - Reserve Bank of India (Non-Banking FinanciaL Company - ScaLe Based ReguLation) Directions, 2023, the Company has in pLace ICAAP PoLicy and Framework with the objective of ensuring avaiLabiLity of adequate capitaL to support aLL risks in business as aLso enabLe effective risk management system in the Company.

The Chief Risk Officer ("CRO”) oversees and strengthens the risk management function of the Company. The CRO is invited to the Board, Audit Committee, Asset LiabiLity Committee and Risk Management Committee Meetings. The CRO aLong with members of the Senior Management apprises the Risk Management Committee and the Board on the risk assessment, process of identifying and evaLuating risks, major risks as weLL as the movement within the risk grades, the root cause of risks and their impact, key performance indicators, risk management measures and the steps taken to mitigate these risks.

Auditors and Audit ReportsJoint Statutory Auditors and their Reports

Basis the recommendation of the Audit Committee and the Board of Directors, the members of the Company had at the 34^th AnnuaL GeneraL Meeting heLd on 23^rd JuLy 2024, approved appointment of M/s. M M Nissim & Co LLP, Chartered Accountants (ICAI Firm Registration Number: 107122W/W100672) and M/s. M.P. ChitaLe & Co., Chartered Accountants (ICAI Firm Registration Number: 101851W) as the Joint Statutory Auditors of your Company for a term of 3 consecutive years to hoLd office from concLusion of 34^th AGM up to the concLusion of 37^th AGM to be heLd in the year 2027. The Joint Statutory Auditors hoLd vaLid peer review certificate as prescribed under the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations”).

The joint Statutory Auditors have given a confirmation on their eLigibiLity and non-disquaLification.

The joint Statutory Auditors of the Company have issued unmodified Audit Reports on the StandaLone and ConsoLidated FinanciaL Statements for the financiaL year ended 31^st March 2025. The report does not contain any quaLification, reservation or adverse remark or discLaimer.

Adoption of Policy for appointment of Statutory Auditors

In compLiance with the Reserve Bank of India GuideLines dated 27^th ApriL 2021 ("RBI GuideLines”), your Company has in pLace a PoLicy for appointment of Statutory Auditors of the Company. The said PoLicy was amended by the Board of Directors to specificaLLy cover independence of auditors and annuaL review of performance of statutory auditors in compLiance with the RBI GuideLines.

Secretarial Auditor and Audit Report

M/s. KSR & Co, Company Secretaries LLP ("KSR”), the SecretariaL Auditor appointed in accordance with the provisions of Section 204 of the Companies Act, 2013 ("Act”) read with the RuLes framed thereunder. KSR has issued the SecretariaL Audit Report for FY2025 which is appended to this Report as "Annexure II". The SecretariaL Audit Report does not contain any quaLification, reservation or adverse remark or discLaimer. KSR was present at the Last AGM of the Company heLd on 23^rd JuLy 2024.

Appointment of Secretarial Auditor

In compLiance with ReguLation 24(A) of Listing ReguLations as amended vide SEBI notification dated 12^th December 2024 and basis the recommendation of Audit Committee, the Board has approved the appointment of M/s. Makarand M. Joshi & Co. Company Secretaries ("MMJC"), as the SecretariaL Auditor of the Company for first term of 5 consecutive years, to conduct Secretarial Audit and provide other allied certification/permitted services for FY2025-2026 up to FY2029- 2030, subject to approvaL of sharehoLders of the Company at the ensuing AGM.

Consequent to the above, M/s. KSR and Co, Company Secretaries LLP ("KSR”), the current SecretariaL Auditor, has ceased to be the SecretariaL Auditor of the Company from 22^nd ApriL 2025.

MMJC have consented for their appointment as the SecretariaL Auditor and have given a confirmation to the effect that they are eLigibLe to be appointed and are not disquaLified from acting as the SecretariaL Auditor.

Members are requested to consider and approve appointment of MMJC as the SecretariaL Auditor of your Company to conduct SecretariaL Audit and provide other aLLied certification/permitted services for FY 2025-2026 up to FY 2029-2030. Necessary

Particulars of Contracts or Arrangements with Related Parties

Your Company has in pLace a robust process for approvaL of ReLated Party Transactions and on DeaLing with ReLated Parties.

ALL contracts/arrangements/transactions entered into by the Company during the FinanciaL Year with reLated parties were in the ordinary course of business and on an arm's Length basis.

Omnibus approvaL of Audit Committee is obtained for ReLated Party Transactions which are of repetitive nature, which are reviewed on quarterLy basis by the Audit Committee as per ReguLation 23 of the Listing ReguLations and Section 177 of the Companies Act, 2013.

ALL ReLated Party Transactions and subsequent materiaL modifications, if any, were pLaced before the Audit Committee for review and approvaL. Necessary detaiLs for each of the ReLated Party Transactions as appLicabLe aLong with the justification are provided to the Audit Committee in terms of the Company's PoLicy on MateriaLity of and DeaLing with ReLated Party Transactions and as required under SEBI Master CircuLar SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024.

The MateriaL ReLated Party Transactions approved by the Members of the Company are aLso reviewed / monitored on quarterLy basis by the Audit Committee of the Company as per ReguLation 23 of the Listing ReguLations and Section 177 of the Companies Act, 2013.

The Company has not entered into MateriaL ReLated Party Transactions as per the provisions of the Companies Act, 2013 and a confirmation to this effect as required under Section 134(3)(h) of the Companies Act 2013 is given in form AOC-2 as "Annexure III", which forms part of this AnnuaL Report.

In accordance with the appLicabLe provisions of the Master Direction issued by the Reserve Bank of India and the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations”), the 'PoLicy on MateriaLity of and DeaLing with ReLated Party Transactions', is avaiLabLe on the Company's website: https://www.mahindrafinance.com/investor-reLations/ poLicy-and-sharehoLder-information#mmfsL-poLicies .

The transactions of the Company with any person/ entity beLonging to the promoter/promoter group which hoLds 10% or more sharehoLding in the Company as required pursuant to Para A of ScheduLe V of the Listing ReguLations is discLosed separateLy in the financiaL statements of the Company. Members of the Company had approved entering into MateriaL ReLated Party transaction with Mahindra & Mahindra Limited, (Promoter/ HoLding Company and a ReLated party) under ReguLation 23 of the Listing ReguLations. During

 

resolution seeking approval, of members for appointment of MMJC as the Secretarial Auditor has been incorporated in the Notice of 35^th Annual. General. Meeting.

Secretarial Audit of Material Subsidiary

There is no Material. UnListed Indian Subsidiary of the Company as on 31^st March 2025 and the requirement under Regulation 24(A) of the Listing Regulations regarding the Secretarial Audit of MateriaL UnListed Indian Subsidiary is not appLicabLe to the Company for the FinanciaL Year 2024-25.

Annual Secretarial Compliance Report with additional confirmations on compliances

In compLiance with ReguLation 24(A) of Listing ReguLations, your Company has undertaken an audit for FY2025 for aLL the appLicabLe compLiances as per Listing ReguLations, 2015 and CircuLars/ GuideLines issued thereunder.

The AnnuaL SecretariaL CompLiance Report ("ASCR”) issued by M/s. KSR & Co, Company Secretaries LLP, SecretariaL Auditor and a Peer Reviewed Firm, with confirmations with confirmations on compLiances by the Company with respect to Insider Trading ReguLations, ReLated Party Transactions, updation of PoLicies, discLosure of materiaL events to Stock Exchanges etc., has been fiLed with BSE and NSE in the prescribed format and the same can be accessed on the website of the Company at https://www.mahindrafinance. com/investor-reLations/reguLatory-fiLings#secretariaL-compHance-report

The Annual Secretarial Compliance Report does not contain any qualification, reservation or adverse remark.

Cost Records and Cost Audit

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148 of the Companies Act, 2013 are not appLicabLe in respect of the business activities carried out by your Company and hence such accounts and records were not required to be maintained by the Company.

Fraud Reporting

During the year under review, the Joint Statutory Auditors and the SecretariaL Auditor have not reported any instance of fraud committed in the Company by its officers or empLoyees, invoLving an amount of Less than ' 1 crore to the Audit Committee under section 143(12) of the Companies Act, 2013, the detaiLs of which need to be mentioned in this Report.

The Company is reinforcing its commitment to trust, integrity and transparency through enhanced measures for compLiance, risk management, and governance.

the year under review, the aggregate vaLue of the transactions entered with Mahindra & Mahindra Limited did not exceed the materiaLity threshoLd as prescribed under ReguLation 23 of the Listing ReguLations. The Company intends to enter into new MateriaL ReLated Party Transaction with Life Insurance Corporation of India for which the approvaL of Members is being sought. Further detaiLs on the transactions with reLated parties are provided in the accompanying financiaL statements.

Whistle Blower Policy/ Vigil Mechanism

Your Company promotes ethicaL behaviour in aLL its business activities and has estabLished a vigiL mechanism for its Directors, EmpLoyees, and StakehoLders associated with the Company to report their genuine concerns. The VigiL Mechanism as envisaged in the Companies Act, 2013 and the RuLes prescribed thereunder and the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 is impLemented through the WhistLe BLower PoLicy, to provide for adequate safeguards against victimization of persons who use such mechanism and make provision for direct access to the Chairperson of the Audit Committee.

As per the WhistLe BLower PoLicy impLemented by the Company, the EmpLoyees, Directors or any StakehoLders associated with the Company are free to report iLLegaL or unethicaL behaviour, actuaL or suspected fraud, or vioLation of the Company's Code(s) of Conduct or Corporate Governance PoLicies or any improper activity, through the channeLs provided beLow.

The WhistLe BLower PoLicy provides for protected discLosure and protection for the WhistLe BLower. Under the WhistLe BLower PoLicy, the confidentiaLity of those reporting vioLation(s) is protected and they are not subject to any discriminatory practices. The WhistLebLower can make a Protected DiscLosure by using any of the foLLowing channeLs for reporting:

1.    Independent third party Ethics HeLpLine Service PortaL: https://ethics.mahindra.com

2.    ToLL free No: 000 800 100 4175

3.    Chairperson of the Audit Committee

The WhistLe BLower PoLicy has been wideLy disseminated within the Company. The PoLicy is avaiLabLe on the website of the Company at the web-Link https://www. mahindrafinance.com/investor-reLations/poLicy-and-shareholder-information#mmfsl-polic.ies .

During the year, the Company received 9 whistLe bLower compLaints. ALL the cases were investigated and appropriate actions were taken, wherever necessary basis investigation reports.

The Audit Committee is apprised of the vigiL mechanism on a periodic basis. During the year, no person was denied access to the Chairperson of the Audit Committee. A

quarterLy report on the whistLe bLower compLaints is pLaced before the Audit Committee for its review.

Particulars of Employees and Related Disclosures

DetaiLs of empLoyees who were in receipt of remuneration of not Less than ' 1,02,00,000 during the year ended 31^st March 2025 or not less than ' 8,50,000 per month during any part of the year, as required under provisions of Section 197(12) of the Companies Act, 2013 read with RuLe 5(2) and 5(3) of Companies (Appointment and Remuneration of ManageriaL PersonneL) RuLes, 2014 wiLL be made avaiLabLe during 21 days before the AnnuaL GeneraL Meeting in eLectronic mode to any SharehoLder upon request sent at the EmaiL ID: companv.secretarv@ mahindrafinance.com.

DiscLosures with respect to the remuneration of Directors, Key ManageriaL PersonneL and EmpLoyees as required under Section 197(12) of the Companies Act, 2013 and RuLe 5(1) of Companies (Appointment and Remuneration of ManageriaL PersonneL) RuLes, 2014, is given in "Annexure IV"

Disclosure in respect of remuneration/ commission drawn by the Managing Director/ Whole-time Director from Holding or Subsidiary Company

Mr. Ramesh Iyer former Vice-Chairman & Managing Director (up to 29^th ApriL 2024) did not receive any remuneration or commission from HoLding/Subsidiaries of the Company during FY2025.

Mr. RauL RebeLLo, Managing Director & CEO effective 30^th ApriL 2024 (Mr. RauL RebeLLo served as Executive Director and MD & CEO Designate up to 29^th ApriL 2024) did not receive any remuneration or commission from HoLding/ Subsidiaries of the Company during FY2025.

Disclosure Under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act")

Your Company is an equaL opportunity empLoyer and is committed to ensuring that the work environment at aLL its Locations is conducive to fair, safe and harmonious reLations between empLoyees. It strongLy beLieves in uphoLding the dignity of aLL its empLoyees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictLy prohibited.

Your Company has in pLace a comprehensive PoLicy in accordance with the provisions of POSH Act and RuLes made thereunder.

ALL empLoyees (permanent, contractuaL, temporary and trainees) are covered under this PoLicy. The PoLicy has been wideLy communicated internaLLy and is pLaced on

the Company's intranet portal The Company has zero tolerance towards sexuaL harassment.

The POSH Policy is available on the website of the Company and can be accessed at the web-link: https:// www.mahindrafinance.com/investor-reLations/poLicy-and-sharehoLder-information#mmfsL-poLicies.

Your Company has complied with the provisions relating to the constitution of the Internal Complaints Committee ("ICC”) under the POSH Act to redress complaints received regarding sexuaL harassment.

To ensure that aLL the empLoyees are sensitized regarding issues of sexuaL harassment, the Company creates awareness by imparting necessary trainings.

The foLLowing is a summary of SexuaL Harassment compLaint(s) received and disposed of during the FY2025, pursuant to the POSH Act and RuLes framed thereunder:

a)    Number of compLaint(s) of SexuaL Harassment received during FY2025 - 3

b)    Number of compLaint(s) disposed of during FY2025 - 3

c)    Number of cases pending for more than 90 days (which is stipuLated timeLine for compLetion of an inquiry into a compLiant of sexuaL harassment under POSH Act) - NiL

d)    Number of cases pending as on 31^st March 2025 - NiL

Number of workshops/awareness programs on the subject carried out during the year under review were as under:

¦    An onLine e-Learning moduLe for empLoyees on Prevention of SexuaL Harassment covering topics on SexuaL Harassment, the process of fiLing compLaints, deaLing with sexuaL harassment, etc. is deveLoped for training. 99.5% of the empLoyees have compLeted this training.

¦    One Training program on ICC was conducted for aLL ICC members.

¦    One Training program on POSH sensitization was conducted for the HR team.

Disclosure of Maternity Benefit Compliance

Your Company is in compLiance of Maternity Benefit Act, 1961 for the year under review.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information in respect of conservation of energy, technoLogy absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with RuLe 8(3) of the Companies (Accounts) RuLes, 2014 is attached as 'Annexure V’ to the Board's Report.

Policies

The detaiLs of the Key PoLicies adopted by your Company and changes made therein, if any, during the year under review are mentioned at "Annexure VI" to the Board's Report.

Compliance with the Provisions of Secretarial Standard - 1 and Secretarial Standard - 2

The Directors have devised proper systems to ensure compLiance with the provisions of the SecretariaL Standards, i.e., SS-1 and SS-2, reLating to 'Meetings of the Board of Directors' and 'GeneraL Meetings', respectiveLy, issued by the Institute of Company Secretaries of India ("ICSI”) and such systems are adequate and operating effectiveLy

Voluntary adherence of Secretarial Standards to all Board Committees

Although, SS-1 compLiance is required onLy for Board and its Committees mandatoriLy required to be constituted under the Companies Act, 2013 ("the Act”), the Company adheres and compLies with most of the good practices enunciated in the said SecretariaL Standards for aLL its mandatory and non-mandatory Board LeveL Committees.

Your Company has duLy compLied with appLicabLe SS-1 and SS-2, during the year under review.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operations in future.

There were no significant and materiaL orders passed by the reguLators or courts or tribunaLs during the year impacting the going concern status of the Company and its future operations.

Disclosure pertaining to Insolvency & Bankruptcy Code

There were neither any appLications fiLed by or against the Company nor any proceedings were pending under the InsoLvency and Bankruptcy Code, 2016 ("IBC”) during the year under review.

Disclosure on One-Time Settlement

During the year, the Company has not made any onetime settLement for Loans taken from the Banks or FinanciaL Institutions and hence the detaiLs of difference between amount of the vaLuation done at the time of one-time settLement and the vaLuation done whiLe taking Loan from the Banks or FinanciaL Institutions aLong with the reasons thereof is not appLicabLe.

General Disclosures

The Directors further state that no discLosure or reporting is required in respect of the foLLowing items, as there were no transactions/events reLated to these items during the financiaL year under review:

¦    There was no issue of equity shares with differentiaL rights as to dividend, voting or otherwise;

¦    There was no issue of shares (incLuding sweat equity shares) to the empLoyees of the Company under any scheme, save and except EmpLoyee Stock Option schemes referred to in this Report;

¦    During the year under review, Board of Directors at its meeting heLd on 13^th February 2025 had approved raising of funds by way issue of equity shares on rights basis to the eLigibLe sharehoLders for an amount not exceeding ' 3000 Crore, subject to receipt of reguLatory/ necessary approvaLs, as may be required.

¦    There was no buy-back of the equity shares during the year under review;

¦    There were no voting rights which are not directLy exercised by the empLoyees in respect of equity shares for the subscription/ purchase for which Loan was given by the Company (as there is no scheme pursuant to which such persons can beneficiaLLy hoLd

shares as envisaged under Section 67(3)(c) of the Companies Act, 2013 ("the Act");

¦    There was no suspension of trading of securities of the Company on account of corporate action or otherwise;

¦    There was no revision made in FinanciaL Statements or the Board's Report of the Company;

¦    The Company being an NBFC, the provisions reLating to Chapter V of the Act, i.e., acceptance of deposit, are not appLicabLe. DiscLosures as per NBFC reguLations have been made in this AnnuaL Report.

Acknowledgments

The Board conveys its deep gratitude and appreciation to aLL the empLoyees of the Company for their tremendous efforts as weLL as their exempLary dedication and contribution to the Company's performance.

The Directors wouLd aLso Like to thank its sharehoLders, customers, vendors, business partners, bankers, government and aLL other business associates for their continued support to the Company and the Management.

---

Mar 31, 2025

Your Directors are pLeased to present their Thirty-Fifth Report together with the audited financial, statements of your Company for the FinanciaL Year ended 31^st March 2025 ("FY2025”).

Financial Summary and Operational Highlights

 

(' in crore)
Particulars	Consolidated		%	Standalone		%
	FY2025	FY2024	Change	FY2025	FY2024	Change
Total Income	18,530.46	15,970.32	16.03	16,074.69	13,562.42	18.52
Less: Finance Costs	8,415.43	6,959.20	Â	7,898.30	6,426.94	Â
Expenditure	6,832.14	6,204.20	Â	4,755.70	4,551.30	Â
Depreciation, Amortization and Impairment	321.21	274.85	Â	273.42	228.71	Â
Total Expenses	15,568.78	13,438.25	15.85	12.927.42	11,206.95	15.35
Profit before exceptional items and taxes	2,961.68	2,532.07	Â	3,147.27	2,355.47	Â
Share of profit of Associates & Joint Ventures	65.23	56.11	Â	-	Â	-
ExceptionaL items	-	-	-	-	-	-
Profit Before Tax	3,026.91	2,588.18	16.95	3,147.27	2,355.47	33.62
Less: Provision For Tax	Â			Â
Current Tax	820.93	716.10	Â	779.45	664.93	Â
Deferred Tax	(54.89)	(70.97)	Â	22.78	(69.08)	Â
Profit After Tax	2,260.87	1,943.05	16.36	2,345.04	1,759.62	33.27
Less: Profit for the year attributabLe to NoncontroLLing interests	(1)	10.36	Â	-	Â	-
Profit attributable to owners of the Company	2,261.87	1,932.69	17.03	2,345.04	1,759.62	33.27
BaLance of profit brought forward from earLier years	8,364.29	7,417.35	Â	7037.93	6,376.60	Â
Add: Other Comprehensive income /(Loss)	(5.71)	(6.71)	Â	(7.49)	(4.97)	Â
BaLance avaiLabLe for appropriation	10,620.45	9,343.33	Â	9,375.48	8,131.25	Â
Less: Appropriations	Â			Â
Dividend paid on Equity Shares	777.78	740.23	Â	778.38	741.32	Â
Transfer to Statutory Reserves	469.13	352.94	Â	469.00	352.00	Â
Add/Less: Other Adjustments:	Â			Â
Changes in Group's Interest	(0.65)	114.13	Â	-
BaLance carried forward to baLance sheet	9,372.89	8,364.29	Â	8,128.10	7,037.93	15.49
Net worth	21,529.46	19,933.25	8.01	19,812.23	18,157.49	9.11

Consolidated Performance Highlights

¦    TotaL Income increased by 16.03% to ' 18,530.46 crore for FY2025 as compared to ' 15,970.32 crore in FY2024.

¦    Profit Before Tax ("PBT") increased by 16.95% to ' 3,026.91 crore for FY2025 as compared to ' 2,588.18 crore in FY2024.

¦    Profit After Tax ("PAT”) (Net of non-controLLing interest) increased by 17.03% to ' 2,261.87 crore for FY2025 as compared to ' 1,932.69 crore in FY2024.

Standalone Performance Highlights

¦    During the year under review, the Company has disbursed Loans of ' 57,899.69 crore as against ' 56,208.22 crore during the previous year, an increase of 3% over the same period in previous year.

¦    TotaL Income increased by 18.52% to ' 16,074.69 crore for the year ended 31^st March 2025 as compared to ' 13,562.42 crore for the previous year.

¦    PBT increased by 33.62% to ' 3,147.27 crore as compared to ' 2,355.47 crore for the previous year.

¦    PAT increased by 33.27% to ' 2,345.04 crore as compared to ' 1,759.62 crore in the previous year.

¦    The Assets Under Management ("AUM”) registered a growth of 17% and stood at ' 1,19,673.02 crore as at 31^st March 2025 as against ' 1,02,596.77 crore as at 31^st March 2024.

The Gross Stage 3 Loan assets stood at ' 4,413.94 crore as on 31^st March 2025 as compared to ' 3,490.90 crore as on 31^st March 2024. The Gross Stage 3 as a percentage to Business Assets increased to 3.7% as on 31^st March 2025 as against 3.4% as on 31^st March 2024.

During the year, the Company's asset quaLity remained within a comfortabLe range, with Gross Stage 3 sLightLy higher at 3.7% of Business assets and as targeted, the Company has been abLe to maintain the aggregate LeveL of Gross Stage 2 + Gross Stage 3 beLow 10% (actuaL at 9.1%) of business assets as on 31^st March 2025. WhiLe the credit cost for the year was at 1.3% underscoring prudent risk management. The Company continued to maintain underwriting discipLine and a proactive approach to restrict earLy-stage deLinquencies.

Material changes from the end of the financial year till the date of this report

No materiaL changes and commitments have occurred after the cLosure of the FinanciaL Year 2024-25 tiLL the date of this Report, which wouLd affect the financiaL position of your Company.

ECL and other updates

The Company estimates impairment on financiaL instruments as per Expected Credit Loss ("ECL”) approach prescribed under Ind AS 109 'FinanciaL Instruments' and in accordance with the Board approved ECL PoLicy.

In estimation of Expected Credit Loss (ECL) provisions, the Company has been using the updated ECL modeL in which muLti-factor macro-economic variabLes and product cLassification of vehicLe Loan portfoLios are buiLt-in and the Company has been updating the ECL modeL with the Latest set of data inputs at reasonabLe periodic intervaLs to capture the expected significant changes in macro-economic growth prospects and shifts in market drivers and changes in risk profiLe of customer credit exposures. During the current financiaL year, as part of annuaL refresh, aLong with updation of Latest macro-economic growth estimates and other reLevant input parameters for computation of ECL provisions for Loan portfoLios, the Company has aLso caLibrated the ECL modeL for SmaLL and Medium Enterprise (SME) portfoLio and Trade advance portfoLio. The Company had estimated the ECL provision for year ended 31^st March 2025 in accordance with the updated ECL modeL. The Company hoLds provision towards expected credit Loss as at 31^st March 2025 aggregating to ' 3,459 crore (as at 31^st March 2024: ' 3,401.59 crore).

The Company's net Stage-3 assets ratio stood at 1.84% as at 31^st March 2025 as against 1.28 % as at 31^st March 2024.

Transfer to Reserves

The Company has transferred an amount of ' 469 crore to the Statutory Reserves, in compLiance with section 45-IC of the Reserve Bank of India ("RBI”) Act, 1934. Further, the Board of your Company has decided not to transfer any amount to the GeneraL Reserve for the year under review. An amount of ' 8,128.10 crore is proposed to be retained in the Profit and Loss Account of the Company.

The Company maintains sufficient Liquidity buffer to fuLfiL its obLigations arising out of issue of debentures. The Company being an NBFC, is exempt from transferring any amount to debenture redemption reserve in respect of privateLy pLaced or pubLic issue of debentures, as per the provisions of section 71 of the Companies Act, 2013 read with RuLe 18 of the Companies (Share CapitaL and Debentures) RuLes, 2014, read with appLicabLe Ministry of Corporate Affairs circuLar. In respect of secured Listed non-convertibLe debt securities, the Company maintains 100% security cover or higher security cover as per the terms of Information Memorandum, GeneraL Information Document ("GID”), Key Information Document ("KID”), as the case may be and/or Debenture Trust Deed, sufficient to discharge the LiabiLity towards principaL amount and interest thereon.

Dividend

Considering good performance and strong cash flows, your Directors are pLeased to recommend a dividend of ' 6.50 per equity share (325%) on the face vaLue of ' 2 each, for FY2025 vis-a-vis 315% dividend in FY2024. Dividend is subject to approvaL of the Members at the ensuing AnnuaL GeneraL Meeting.

The Company has not paid any Interim Dividend during the financiaL year under review.

The dividend recommended is in accordance with the Company's Dividend Distribution PoLicy, within the ceiLing and in compLiance with the framework prescribed in RBI Master Directions (formerLy known as RBI guideLines on DecLaration of Dividend by NBFCs).

Tax on Dividend

In terms of the provisions of the Income-tax Act, 1961, the Company wiLL make payment of dividend after deduction of tax at source ("TDS”) as per the prescribed rates, to those sharehoLders whose names appear as beneficiaL owner/ member in the List of beneficiaL owners to be furnished by NationaL Securities Depository Limited/ CentraL Depository Services (India) Limited in case of shares heLd in demateriaLised form, or in the Register of Members in case of shares heLd in physicaL

 

fund distribution (through its joint venture Mahindra Manulife Investment Management Private Limited), and fixed deposit schemes. Additionally, your Company continued to penetrate into leasing and loan against property business. In FY2025, the focus has been on building cross sell engine by entering into Insurance Corporate Agency and growing its co-lending and coorigination partnerships with fintechs, NBFCs, Banks and MSME platforms. In addition, your Company has decided to foray into mortgage space.

In the core vehicle finance business, your Company has strengthened its capabilities by designing flexible financial products aligned with customers' cash flow patterns. It has also built heft around underwriting, risk management and has set up a fraud control unit. As a result, it has solidified its dominance in financing Mahindra's vehicles and tractors and is actively pursuing partnerships with prominent Original Equipment Manufacturers ("OEMs”) to expand its market presence. It continues to strengthen its position in the pre-owned vehicle and tractor space.

Pillars of Progress: Growth, Efficiency, and Customer-Centricity

A.    Expanding On-the-Ground Presence

As of 31^st March 2025, MMFSL's network encompasses 1,365 offices and branches across 27 States and 7 Union Territories, reinforcing its nationwide reach. This expansive infrastructure reduces reliance on any single region, mitigating risks posed by localized climatic or economic fluctuations, such as excessive rainfall or drought. Each branch serves as a hub for organic growth, leveraging local relationships to deliver a suite of financial services, including vehicle loans, SME funding, insurance solutions, and more. Centralized oversight ensures consistent asset quality, while the Company's deep penetration into rural and semi-urban markets positions it to address the evolving financial demands and ambitions of India's diverse population.

Your Company's enhanced branch structure facilitates better opportunity to cater to customers' needs and assist us in better customer servicing and improved regulatory compliance.

B.    Strengthening Digital Engagement

Your Company is deepening its reach in rural and semi-urban India through end-to-end digital loan journeys, automated credit assessments, and faster turnaround times.

The redesigned Mahindra Finance Customer App offers customers a seamless experience for EMI payments, loan management, Fixed Deposit booking, and BBPS-enabled utility payments.

 

form, as at the close of business hours on Tuesday, 15^th July 2025 (Record date for the purpose of Dividend).

Unclaimed dividend transferred to Investor Education and Protection Fund

In terms of the provisions of Sections 124 and 125 of the Companies Act, 2013 ("the Act”) read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, during the year under review, the Company has transferred an amount of ' 5,34,873.60 being the unclaimed dividend for FY 2016-17 to the Investor Education and Protection Fund ("IEPF”). The details of total, amount(s) Lying in unpaid dividend account of the Company for last seven years and due to be transferred to IEPF, is mentioned in the Report on Corporate Governance, forming part of this Annual Report.

Dividend Distribution Policy

In compliance with the provisions of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated Dividend Distribution Policy, setting out criteria and circumstances to be considered by the Board while recommending dividend to the shareholders. The Dividend Distribution Policy provides for eligibility criteria, aspects to be considered by the Board while recommending dividend, ceiling on dividend payout ratio etc., in accordance with the Master Direction -Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 dated 19^th October 2023.

As set out in Dividend Distribution Policy, the Company's dividend payout is determined based on available financial resources, investment requirements and optimal shareholder return.

Within these parameters, the Company endeavours to maintain a total dividend payout ratio in the range of 20% to 30% of the annual standalone Profit after Tax ("PAT”) of the Company.

The Dividend Distribution Policy can also be accessed on the Company's website at the web-link: https://www. mahindrafinance.com/investor-relations/policy-and-sharehoLder-information#mmfsL-poLicies .

Operations

Your Company remains dedicated to fueling the aspirations of the customers by providing financing solutions for automobiles and tractors, primarily catering to those who rely on these assets for their livelihoods and personal mobility. Beyond this core offering, your Company has broadened its scope to include preowned vehicle loans, support for small and medium enterprises (SMEs), insurance brokerage services (via its subsidiary Mahindra Insurance Brokers Limited), mutual

The app is available in 12 languages and has over 4.5 lakh+ App sign-ups since launch of revamped version in Dec 2024.

An AI-powered Chatbot launched in 2024, provides multilingual support (in 4 languages) via app and web.

Over 35 lakh+ messages have been exchanged.

UDAAN - Your Company's transformation initiative assists in elevating digital capabilities across the value chain, offering assisted journeys backed by analytics, alternate data, and fraud prevention tools, thereby leading to improved sales and operations productivity, reduced turnaround times, and enhanced financial discipline. The assisted end-to-end digital loan process, enhanced by advanced analytics, alternative data sources, account aggregators (AA), bank statement analysis (BSA), improved fraud prevention measures, credit assessments, digital KYC, e-stamping, e-sign, and e-mandates have led to significantly reduced turnaround times. Additionally, it has streamlined documentation through automation and enhanced transparency throughout the lending process, underscoring our commitment to providing innovative and customer-focused financial solutions.

Our newly launched digital collections application offers a 360-degree view of the customer, featuring a performance and activity dashboard, loan information, payment history, and additional functionalities. By leveraging automated reminders and digital payment platforms, we ensure prompt collections while minimizing operational expenses and reducing delinquencies. Additionally, employees are equipped with nudges to assist customers in navigating repayment options (UPI, QR codes, debit card, internet banking, etc.), addressing any concerns, recording minutes of meetings (MOMs), and providing customized solutions. This initiative has enhanced our portfolio's health, improved customer convenience and experience, and promoted financial discipline within an increasingly digital landscape.

C. Harnessing Technological Innovation

Your Company is leveraging AI, ML, and advanced analytics to optimize underwriting, collections, and decision-making. AI-powered scorecards now segment customers by risk, allowing for smarter approvals and reduced delinquencies. Our GenAI-powered chat interface provides senior management with instant data insights, while a Data Lakehouse enables real-time dashboards and performance tracking.

A next-gen AI collections strategy has reduced EMI bounce rates by 20-25% in early buckets, improving asset quality. AI-ML tools are also being used to enhance the pre-approved and pre-qualified loan offer base by 8x.

Cloud infrastructure has been strengthened through a multi-cloud agnostic strategy, achieving cost efficiencies, better scalability, and improved data security. We have implemented cybersecurity upgrades including DLP, XDR, SIEM, WAF, and MDM tools, along with a 24/7 Security Operations Centre and third-party Red Team assessments to safeguard critical assets.

In line with RBI's IT governance directions, we've built a centralized tech asset inventory, enhanced IT service management workflows, and established robust frameworks for business continuity, risk assessment, and IT outsourcing - reinforcing operational resilience and regulatory compliance.

D.    Data as a Strategic Edge

Your Company has built a centralized Data Lakehouse architecture, empowering real-time access to performance dashboards, KPIs, and crossfunctional business insights. This is strengthening our ability to make data-driven decisions and customize offerings across customer segments.

Advanced analytics are embedded across functions—improving lead conversion, channel productivity, and collections forecasting. These insights are also enhancing financial discipline and regulatory preparedness.

E.    Improved Insurance Coverage of MMFSL assets

Your Company received its corporate agency license from IRDAI in May 2024 and since then Company has partnered with various insurance companies for offering a comprehensive range of insurance products to meet diverse customer needs. Your Company has introduced exclusive group insurance products tailored for its existing customers. Your Company also offers retail insurance solutions in Motor, Health & Life insurance for both new and existing customers.

Your Company leverages its Pan-India branch network of 1365 branches and trained, certified personnel with a strong understanding of customer needs. Your Company has also tied-up with 10 insurance companies - 4 Life, 2 Health and 4 General Insurance companies to provide adequate choice to its customers.

This has resulted in improved insurance penetration and enhanced service delivery through an in-house cLaims team, resulting in better cLaims experience. Continuous employee training and better insurance penetration have further reinforced the model's success, positioning insurance as a strategic lever for risk management. AH these efforts led to an effective insurance coverage of your Company's assets, lives and health of customers.

The distribution network is driven by a dedicated team of employees (Specified Persons) and PoSP (Point of Sales Persons), positioned across ~1200 + locations to ensure widespread reach and seamless customer service.

Additionally, your Company also plans to expand its distribution channel by introducing digital and telemarketing platforms to serve broader customer base across India more efficiently.

F. Future Growth Enablers

MMFSL's vision is to be a leading and responsible financial solution partner of choice for emerging India. This commitment reflects a dual focus on responsible customer service and sustainable profitability, extending beyond traditional lending to a holistic suite of solutions. The emphasis on digital innovation and product diversification is central to this vision.

Your Company targets a sustainable growth trajectory and maintaining stable asset quality. Strategic efforts are focused on deepening penetration in pre-owned car, used tractor, and SME financing, tapping into untapped demand within these segments. To broaden its service offerings, MMFSL has forged new alliances for colending and co-origination. These collaborations enhance outreach, improve credit access, and offer competitive rates to underserved communities. The AUM from these partnerships have gone up significantly in the current financial year as compared to the previous financial year. The Company remains committed to refining its risk management, underwriting frameworks to sustain top-tier asset quality and strengthening its partnerships with fintechs, NBFCs, banks & MSME platforms. Moving forward, the growth strategy will be centred around leveraging digital platforms to enhance service delivery through customer acquisition, establishing strategic alliances and exclusive partnerships with fintech firms and next-generation technology distributors, strengthening

digital capabilities to ensure seamless accessibility and an optimized customer experience and utilizing digital platforms to identify cross-sell and up-sell opportunities while enhancing overall customer service.

Other Developments¦    Mortgage Business

The Board of your Company has approved expansion into Mortgage business which would include providing Housing Finance, Top-up loans, Lease rental discounting, home improvement and home extension loans, balance transfer loans, construction finance etc. Your Company intends to leverage its strong geographical presence in the retail lending space to exploit the mortgage lending opportunity for its existing customers as well as new customers. Your Company would also participate in affordable housing loan schemes of government. This expansion would leverage your Company's established presence in the financial services sector and its deep understanding of the customer needs resulting in increase in the mortgage lending opportunity to its existing customers as well as new customers.

Your Company is in the process of building its mortgage capabilities and is in investment mode with focus on recruitment, infrastructure build out, and technology setup towards building up its capabilities.

¦    Rights Issue of Equity Shares

The Board of Directors of the Company ("Board”) at their meeting held on 13^th February 2025, had inter-alia considered and approved the fund raising by way of offer and issuance of fully paid-up equity shares of the Company for an amount not exceeding ' 3,000 Crore by way of a rights issue ("Rights Issue”) to the eligible equity shareholders of the Company, to primarily maintain a strong capital adequacy ratio keeping in mind Company's growth plans to augment its Assets Under Management ("AUM"). Till the date of this report the Company has not made any public announcement and has not undertaken further action or decision in relation to the Rights Issue including setting a Record date or ratio or pricing. Necessary intimations/ announcements to the shareholders, stock exchanges etc., on the above would be made in due course.

Change in Nature of Business

There has been no change in the nature of business and operations of the Company during the year under review.

RBI Compliances

Your Company has been categorised as an NBFC- Upper Layer vide press release dated 30^th September 2022, issued by RBI. Your Company has always endeavored to maintain the highest standards of compliance within the organisation and shall continue to do so going ahead. The Company continues to comply with all the applicable laws, regulations, guidelines etc. prescribed by the RBI, from time to time including the norms pertaining to capital adequacy, non- performing assets etc.

Your Company's asset liability management is reviewed on quarterly basis by a focused Board level committee viz. Asset Liability Committee. Your Company's liquidity coverage ratio ("LCR”) was 277% as on 31^st March 2025 against the mandatory requirement of 100%.

Your Company has adopted all the mandatory applicable policies under Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 like Large Exposure Policy, Internal Capital Adequacy Assessment Policy (ICAAP), Compliance Policy etc.

Compliance Risk Assessment Framework and Compliance Testing ("CRAFT")

Your Company has also put in place Compliance Risk Assessment Framework and Compliance Testing in compliance with RBI circular dated 11^th April 2022.

Business Continuity Policy

In order to have robust framework & process for Business continuity, your Company has implemented Business Continuity Management Policy which inter-alia includes identification, monitoring, reporting, responding and managing the risks including mitigating risks of a significant / prolonged business disruption in order to protect the interests of the Company's customers, employees and stakeholders.

Your Company continues to invest in talent, systems and processes to further strengthen the control, compliance, risk management and governance standards in the organisation.

Internal Ombudsman

Your Company has appointed an Internal Ombudsman ("IO”) in compliance with the Master Direction - Reserve Bank of India (Internal Ombudsman for Regulated Entities) Directions, 2023 dated 29^th December 2023, ("Master Directions”).

In compliance with Master Directions, Mr. Alok Kumar Sharma has been appointed and is currently serving as the 'IO' of the Company, contact details of IO are available on the website and can be accessed on the website at https://www.mahindrafinance.com/customer-service/nbfc-ombudsman-scheme/contact-details

The Board of Directors at the quarterly Board meetings review number of complaints escalated to IO and status of disposal of such complaints in compliance with the said RBI circular. Report on number of complaints escalated to IO and status of disposal of such complaints is reproduced hereunder:

No of complaints outstanding at the beginning of the year	404
No of complaints received during the year	43,174
Of the complaints received, number of complaints referred to IO during the year, which were rejected by the Company	2,757
Of the complaints referred to IO how many complaints were agreed by IO	2,749
Of the complaints referred to IO how many complaints were disagreed by IO	8
Total complaints pending with IO at the end of the year	74

Macro factors and sourcing of funds:

During the year under review, Reserve Bank of India ("RBI”) focused mainly on neutral monetary policy to ensure that inflation durably aligns with the target, while supporting growth. During Q4 FY2025 with inflation on a decreasing trend and increasing global uncertainties, RBI reduced the REPO Rate by 25bps to 6.25%. Liquidity conditions remained tight with the banking sector liquidity remaining largely negative in FY2025.

Inflation in India has remained majorly below 6% (RBI upper tolerance limit) throughout the year. Consumer Price Index ("CPI”) inflation was 3.34% in March 2025. Globally, inflation showed a downward trajectory and seems to be moderating paving the way for a growth revival. However, this comes with a caution as successive shocks like the Russian-Ukraine war, Israel-Hamas-Iran conflict, significant US policy changes by new administration in 4 distinct areas viz: trade, immigration, fiscal policy and regulation which is expected lead to global uncertainty and economic slowdown. The rupee has remained under pressure throughout FY2025 against the US dollar. During Q4 FY2025, it remained volatile primarily on account of proposed US policy changes, however it recovered and ended at ' 85/$ mark.

The 10 Year G Sec curve has been following a reducing trend from around 7.1% to 6.5% during the financial year. During the year, interest cost on borrowed funds remained at 7.64% (interest cost to average borrowing) for the Company.

During the year under review, your Company continued with its diverse methods of sourcing funds incLuding borrowing through Secured and Unsecured Debentures, Term Loans, External Commercial Borrowings, Securitisation, Fixed Deposits, Commercial Papers, Inter Corporate Deposit etc., and maintained prudential Asset Liability match throughout the year. Your Company sourced long-term debentures and loans from banks and other institutions at attractive rates. Your Company continues to expand its borrowing profile by tapping new lenders and geographies.

Securitisation

During the year, your Company successfully completed Securitization/Direct Assignment transactions aggregating to ' 6,530 crore.

Non-Convertible Debentures

During the year under review, your Company raised an aggregate of ' 7,255 crore through issuance of Nonconvertible ("NCDs") debentures private placement basis as mentioned hereunder:

1.    ' 5,755 crore, raised though issuance of Secured Redeemable Non-Convertible Debentures.

2.    ' 1,500 crore raised through issuance of Unsecured Redeemable Non-Convertible Subordinated Debentures eLigibLe for Tier II CapitaL.

As specified in the respective offer documents, the funds raised from issuance of NCDs were utiLised for various financing activities, onward lending, repaying the existing indebtedness, working capital and for general corporate purposes of the Company. Details of the end-use of funds were furnished to the Audit Committee on a quarterly basis. The NCDs are listed on the debt market segment of BSE Limited. As on 31^st March 2025 there are no unlisted NCDs.

During the year, your Company has redeemed NCDs worth ' 4,645 crore and subordinated debt worth ' 215 crore on private placement basis.

Your Company is in compliance with the applicable guidelines issued by Securities and Exchange Board of India and other applicable regulators in this regard.

There has been no default in making payments of principal and interest on aLL the NCDs issued by the Company on a private pLacement basis and through pubLic issue. Further, there was no deviation/variation in use of proceeds raised from the object stated in the offer document. As on 31^st March 2025, there was no unpaid/uncLaimed interest on NCDs issued on a private pLacement basis. With respect to the three pubLic issuances of NCDs made by the Company, aggregate PrincipaL payment of ' 5,93,000 /- and Interest of ' 40,38,064 /- was uncLaimed by the investors as on 31^st March 2025. Reminders have been sent to the NCD hoLders to cLaim the same.

Commercial Paper

As on 31^st March 2025, the Company had CommerciaL Paper ("CPs”) with an outstanding amount (face vaLue) of ' 2,153 crore. CPs constituted approximateLy 2.09% of the outstanding borrowings as on 31^st March 2025. The CPs of the Company are Listed on the debt market segment of the NationaL Stock Exchange of India Limited.

Borrowings

In order to expand the business of the Company and to cater the enhanced budgeted disbursements, the Board of Directors of the Company have subject to the approvaL of the sharehoLders of the Company, approved increase in the overaLL borrowing Limit from ' 1,30,000 crore to ' 1,50,000 crore.

Credit Ratings

Your Company enjoys highest rating for its Long-term and short-term borrowing programmes from aLL the credit rating agencies that it works with. Your Company has been rated by CRISIL Ratings Limited ("CRISIL”) & India Ratings and Research Private Limited ("India Ratings”) for its NonConvertibLe Debentures program, CommerciaL Papers, Banking FaciLities & Fixed Deposits. Further, CARE Ratings Limited ("CARE”) and Brickwork Ratings India Pvt. Ltd. ("BWR”) has rated your Company for the Non-ConvertibLe Debentures program. These rating agencies have reaffirmed the highest credit rating for your Company's short-term & Long-term borrowing instruments. Your Company beLieves that its credit ratings and strong brand equity enabLes it to borrow funds at competitive rates. The details of ratings are given in the Corporate Governance Report, forming part of this AnnuaL Report.

Capital Adequacy

As on 31^st March 2025, the CapitaL to Risk Assets Ratio ("CRAR”) of your Company was 18.33% which is weLL above the minimum requirement of 15% CRAR prescribed by the Reserve Bank of India.

Out of the above, Tier I capitaL adequacy ratio stood at 15.25% and Tier II capitaL adequacy ratio stood at 3.08% respectiveLy.

Share Capital

The issued, subscribed and paid-up Equity Share CapitaL as on 31^st March 2025 was ' 247.1 crore, consisting of 123,55,29,920 Equity Shares of the face vaLue of ' 2 each, fuLLy paid-up.

There was no change in the issued, subscribed and paid-up share capitaL during the year under review.

As on 31^st March 2025, none of the Directors of the Company hoLd instruments convertibLe into equity shares of the Company. DetaiLs of Restricted Stock units ("RSUs") granted to Executive Directors are given in the Corporate Governance Report forming part of this AnnuaL Report.

Economy Global Economy

As per the InternationaL Monetary Fund, the gLobaL economy in CY 2024 navigated a compLex Landscape shaped by geopoLiticaL shifts, trade fluctuations, and inflationary trends. The EL Nino phenomenon significantLy impacted economic stabiLity, causing droughts, floods, and disruptions to marine ecosystems, affecting

agricuLture, infrastructure, and the fishing industry whiLe increasing inflationary pressures. OiL prices remained voLatiLe, initiaLLy rising due to geopoLiticaL tensions and positive macroeconomic trends but Later decLining amid bearish sentiment, economic concerns, and easing supply risks. Moreover, gLobaL trade faced disruptions as Red Sea attacks reduced Suez CanaL traffic, whiLe Panama CanaL drought-driven restrictions sLowed shipments across the worLd. GLobaL growth is expected moderate from 3.3% in 2024 to 2.8% in 2025, and projected to stabiLise at 3.0% in 2026. SuppLy chain vuLnerabiLities prompted businesses and governments to reassess trade dependencies and impLement strategic measures. Inflation is expected to ease from 5.7% in 2024 to 4.3% in 2025 and 3.6% in 2026, remained a concern, influencing cautious monetary poLicies. Rising trade tensions, incLuding new tariffs and retaLiatory actions, couLd introduce uncertainties, impacting inflation and economic momentum. However, economies are expected to Leverage innovation, sustainabiLity efforts, and poLicy interventions to maintain Long-term stabiLity in future.

Domestic Economy

India remained one of the fastest-growing major economies as strong domestic demand, structuraL reforms, and supportive poLicies drove its expansion. The country surpassed the UK to become the worLd's fifth-Largest economy, with steady growth supported by manufacturing expansion, a robust services sector, and increased infrastructure investments. Government initiatives, such as digitaL transformation and financiaL incLusion, strengthened domestic manufacturing and attracted foreign direct investment. Despite gLobaL uncertainties, geopoLiticaL tensions, and inflationary pressures sLowing growth in FY2025, the economy is expected to reach 6.5% in FY2026 as per the RBI Monetary PoLicy Report (ApriL-2025). However, with the inflationary pressures easing, the Reserve Bank of India reduced the repo rate to 6.00% in ApriL 2025. WhiLe gLobaL risks persist, India's economic outLook remains strong, reinforcing its position as a Leading gLobaL economic powerhouse.

Management Discussion and Analysis

In accordance with the appLicabLe provisions of the Master Direction- Reserve Bank of India (Non-Banking FinanciaL Company - ScaLe Based ReguLation) Directions, 2023 and the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015, a detaiLed anaLysis of the Company's performance is discussed in the Management Discussion and AnaLysis Report, which forms part of this Report.

Corporate Governance

Your Company practices a culture that is built on core values and ethical governance practices. Your Company is committed to Integrity and transparency in all its dealings and pLaces high emphasis on business ethics. The Board of your Company exercises its fiduciary responsibilities in the widest sense of term and endeavours to enhance long-term shareholder value. Company's disclosure regime is aimed at achieving best practices, gLobaLLy

A Report on Corporate Governance along with a Certificate from M/s. KSR & Co, Company Secretaries LLP, Secretarial Auditor, certifying compliance with the conditions of Corporate Governance forms part of this Report.

Ethics Framework

The Ethics & Corporate Governance framework is anchored by dearly defined policies and procedures, covering areas such as Anti-Bribery and Anti-Corruption Policy ("ABAC”), Policy on Gifts & Entertainment ("G&E"), PoLicy on Prevention of SexuaL Harassment at WorkpLace ("POSH"), WhistLe-BLower PoLicy ("WB") to ensure robust Corporate Governance.

New joiners are mandatoriLy required to undertake e-Learning moduLes on the Company's Code of Conduct ("COC"), POSH and ABAC. In addition to this, an AnnuaL CompLiance DecLaration ModuLe on COC is mandated for aLL the empLoyees.

The Code of Conduct and aLL the Company's poLicies are accessibLe on the Company's website; in the Governance section at the web-Link: https://www.mahindrafinance. com/investor-reLations/poLicy-and-sharehoLder-information#mmfsL-poLicies .

The Code of Conduct Committee and the Audit Committee ensures that the areas of Ethics & Governance framework are executed effectiveLy and the decisions on substantiated cases are taken in a fair, just and consistent manner across business.

Investor Relations

During the current year, your Company has met muLtipLe investors and anaLysts-both domestic and international These sessions were undertaken through a mix of one-on-one or group meetings. Your Company aLso participated in muLtipLe domestic conferences organised by reputed broking houses, in addition to accessing overseas investors through Non-DeaL Roadshows ("NDRs"). Having meetings in virtuaL format (through conference caLLs and video conferencing) enabLed accessing a Larger investor base.

Your Company hoLds quarterLy and annuaL earnings caLLs through structured conference caLLs and/or web-Links, detaiLs of which are made avaiLabLe to pubLic through the Company's website and stock exchange(s).

During these meetings/ earnings caLLs, the interactions are based on generaLLy avaiLabLe information accessibLe to the pubLic in a non-discriminatory manner. No unpubLished price sensitive information is shared during such meetings. Your Company beLieves in transparent communication and have been voLuntariLy discLosing criticaL information regarding Company's performance through monthLy/quarterLy updates.

Silent period

As a good governance practice, your Company voLuntariLy observes a 'SiLent / Quiet period' starting from 1^st day of the start of the month after the end of the quarter for which the financiaL results are to be announced tiLL the time of announcement of said resuLts. During this period, no meetings with investors/anaLysts/funds are heLd to discuss unpubLished financiaL performance of the Company to ensure protection of the Company's UnpubLished Price Sensitive Information ("UPSI").

Consolidated Financial Statements

The ConsoLidated FinanciaL Statements of your Company, its subsidiaries, associate/joint venture for FY2025, prepared in accordance with the reLevant provisions of the Companies Act, 2013 ("the Act") and appLicabLe Indian Accounting Standards aLong with aLL reLevant documents and the Auditors' Report form part of this AnnuaL Report.

Pursuant to the provisions of Section 136 of the Act, the StandaLone and ConsoLidated FinanciaL Statements of the Company, aLong with reLevant documents and financiaL statement of each of the subsidiaries of the Company are avaiLabLe on the website of the Company and can be accessed at the web-Link: https://www. mahindrafinanc.e.c.om/investor-relations/financ.ial-information .

Subsidiaries, Joint Venture(s) and Associate(s)

A report on the performance and financiaL position of each of the Company's subsidiaries, associate/ joint venture is incLuded in the ConsoLidated FinanciaL Statements and the saLient features of their financiaL statements and their contribution to overaLL performance of the Company as required under Section 129(3) of the Companies Act, 2013 ("the Act") read with RuLe 8(1) of the Companies (Accounts) RuLes, 2014, is provided in Form AOC-1, annexed as 'Annexure A’ to the ConsoLidated FinanciaL Statements and forms part of this AnnuaL Report.

Material Subsidiary

ReguLation 16 of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations") defines a "materiaL subsidiary" to mean a subsidiary, whose turnover or net worth exceeds ten percent of the consoLidated turnover or net worth respectiveLy, of the Listed entity and its subsidiaries in the immediateLy preceding accounting year.

Mahindra RuraL Housing Finance Limited ("MRHFL") which was a materiaL subsidiary of the Company up to year ended 31^st March 2024, did not meet the criteria for materiaL subsidiary as stated in reguLation 16(1)(c) of the Listing ReguLations for FY2025 and accordingLy MRHFL ceased to be a MateriaL subsidiary of the Company for FY2025.

Your Company does not have any MateriaL Subsidiary for the FinanciaL year ended 31^st March 2025.

Operational and performance highlights of the Company’s Subsidiary/Joint venture Companies for FY2025 are given hereunder:Mahindra Rural Housing Finance Limited

Mahindra RuraL Housing Finance Limited ("MRHFL"), the Company's subsidiary, engaged in the business of providing Loans for purchase, renovation and construction of homes to individuaLs in the Low and middLe income category of the country, registered a totaL income of ' 1,196.70 crore as compared to ' 1,294.44 crore for the previous year, decrease of 7.55 % over the previous financiaL year. Loss Before Tax stood at ' 304.58 crore as compared to profit before tax of ' 4.84 crore for the previous year. Loss After Tax stood at ' 227.94 crore as compared to profit after tax of ' 3.60 crore in the previous year. Company is making strategic efforts to drive enhanced operationaL efficiencies.

During the year under review, MRHFL disbursed Loans aggregating to ' 2,023 crore serving more than 12,600 househoLds as against ' 2,071 crore in the previous year. MRHFL is expanding its footprint in affordabLe housing.

Mahindra Insurance Brokers Limited

Mahindra Insurance Brokers Limited ("MIBL"), whoLLy owned subsidiary of the Company (effective 22^nd September 2023) is engaged in the business of Direct and Re-insurance Broking.

During the year under review, there was growth of 4.03% in Gross Premium faciLitated for the Corporate and RetaiL business Lines, increasing from ' 4,555.86 crore in FY2024 to ' 4,739.27 crore in FY2025. The TotaL Income increased by 13.21% from ' 1,094.95 crore in FY2024 to ' 1,239.59 crore in the FY2025. The Profit Before Tax decreased by 26.02% from

' 167.50 crore to ' 123.92 crore and the Profit After Tax decreased by 28.12% from ' 123.52 crore to ' 88.78 crore during the same period.

Mahindra Manulife Investment Management Private Limited

Mahindra ManuLife Investment Management Private Limited ("MMIMPL") acts as an Investment Manager for the schemes of Mahindra ManuLife MutuaL Fund ("MutuaL Fund"). As on 31^st March 2025, MMIMPL was acting as the investment manager to 24 schemes of the MutuaL Fund. The average Assets Under Management in these 24 schemes rose to ' 27,090 crore as on 31^st March 2025 as compared to ' 19,659 crore as on 31^st March 2024, deLivering a growth of 38% in assets. Of these assets, ' 24,441 crore were in equity and hybrid schemes in March 2025, as compared to ' 17,613 crore in March 2024, a growth of 38.77%. MMIMPL has empaneLed 34,439 distributors and now has 14,06,485 investor accounts in these 24 schemes.

During the year under review, the totaL income of MMIMPL was ' 87.71 crore as compared to ' 63.54 crore for the previous year. The operations for the year under consideration have resuLted in a Loss of ' 10.06 crore as against a Loss of ' 27.27 crore during the previous year. MMIMPL pLans to reduce Losses through focus on consistent fund performance, saLes strategy aimed to buiLd market share with key distributors, and prudent cost management. AdditionaLLy, MMIMPL pLans to enhance product suite by Launching 2-3 new funds during FY2026 to enabLe soLutions across the risk reward spectrum.

Mahindra Manulife Trustee Private Limited

Mahindra ManuLife Trustee Private Limited ("MMTPL") acts as the Trustee to Mahindra ManuLife MutuaL Fund ("MutuaL Fund").

During the year, MMTPL earned trusteeship fees of ' 99.14 Lakhs and other income of ' 14.62 Lakhs as compared to ' 107.03 Lakhs and ' 10.29 Lakhs, respectiveLy, for the previous year. MMTPL recorded a profit of ' 61.82 Lakhs for the year under review as compared to profit of ' 59.72 Lakhs in the previous year.

Mahindra Ideal Finance Limited (Sri Lanka)

Your Company hoLds a 58.2% stake in Mahindra IdeaL Finance Ltd (Sri Lanka) {"MIFL"] with a totaL investment of ' 77.97 crore. Leveraging Mahindra Finance's expertise of over 30 years in the financiaL services sector and the LocaL management's expertise of the domestic market, MIFL is poised to buiLd a Leading financiaL services business in Sri Lanka.

Transfer of Unclaimed amounts pertaining to Fixed Deposits to IEPF:

Pursuant to Section 125 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) RuLes, 2016 ("the IEPF RuLes") as amended from time to time, matured Deposits remaining uncLaimed for a period of seven years from the date they became due for payment are required to be transferred to the Investor Education and Protection Fund ("IEPF") estabLished by the CentraL Government. Further, interest accrued on the deposits which remain uncLaimed for a period of seven years from the date of payment are aLso required to be transferred to the IEPF under Section 125(2)(k) of the Companies Act, 2013.

The Company, during FY2025 has transferred to the IEPF an amount of ' 0.35 crore being the uncLaimed amount of matured fixed deposits and ' 0.05 crore towards uncLaimed/unpaid interest accrued on the Deposits. The concerned depositor can cLaim the Deposit and/or interest from the IEPF by foLLowing the procedure Laid down in the IEPF RuLes.

Loans and Advances

During the year under review, the Company has not given any Loans and advances in the nature of Loans to its Directors or subsidiaries or associate or to firms/ companies in which Directors are interested and no such transactions were outstanding during the year.

DiscLosure on transaction with Mahindra and Mahindra Limited (Promoter) hoLding 52.16% in the Company, as on 31^st March 2025, and other Promoter Group Companies, is provided in note no. 51 of Audited StandaLone FinanciaL Statements for year ended 31^st March 2025.

AccordingLy, the discLosure of particuLars of Loans/ advances, etc., as required to be furnished in the AnnuaL Accounts of the Company pursuant to ReguLation 34[3] and 53(1)(f) read with paragraph A of ScheduLe V of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 is not appLicabLe to the Company.

Particulars of Loans, Guarantees or Investments in Securities

Your Company, being an NBFC registered with RBI and engaged in the business of giving Loans in ordinary course of its business, is exempt from compLying with the provisions of Section 186 of the Companies Act, 2013 ("the Act") with respect to Loans.

 

With improving economic and business environment witnessed in Sri Lanka, MIFL recorded significant rebound in its business activities. The disbursement in vehicLe Lending business in FY2025 was LKR 8.8 Bn, a growth of 212% over FY2024. The Gold loan disbursements docked 20.1 Bn, an increase of 82% over FY2024.

As at 31^st March 2025, the Company's GS3 LeveL dropped to 1.86%, which is industry Leading in the context of the Sri Lankan market. The Company achieved year-round coLLection efficiency of more than 100% in FY2025.

MIFL's totaL income for the FY25 was SriLankan rupee ("LKR") 2,741 Mn vs LKR 2,309 Mn of FY2024. Profit Before Tax (PBT) in FY2025 was LKR 434 Mn, an increase of 30% over FY2024 PBT of LKR 334 Mn. and Profit After Tax (PAT) in FY2025 was LKR 146 Mn, a growth 42% over FY2024 PAT of LKR 103 Mn. MIFL continued investments in increasing its reach to grow the business. The branch network grew to 35 branches, an addition of 5 branches in FY2025, covering the Length and breadth of the country. Investments were made in IT aLso to enhance the customer and user experience.

Mahindra Finance CSR Foundation

Mahindra Finance CSR Foundation was incorporated on 2^nd ApriL 2019 as a whoLLy owned subsidiary of Company registered under Section 8 of the Companies Act, 2013 to promote and support CSR projects and activities of the Company and its group Companies.

The foundation has obtained Registration under Section 12AA and Section 80G of the Income Tax Act, 1961 and CSR Registration Number.

Joint Venture/AssociateMahindra Finance USA LLC ["MFUSA"]

MFUSA's retaiL and deaLer disbursement registered a decrease of 12.39% to USD 803.93 miLLion for the year ended 31^st March 2025 as compared to USD 917.58 miLLion for the previous year.

TotaL Income increased by 5.55% to USD 82.16 miLLion for the year ended 31^st March 2025 as compared to USD 77.84 miLLion for the previous year. Profit before tax was reLativeLy flat at USD 22.67 miLLion as compared to USD 22.86 miLLion for the previous year. Profit after tax decreased by 1.61% to USD 16.93 miLLion as compared to USD 17.21 miLLion in the previous year.

Changes in Subsidiaries, Joint Venture or Associate Companies during the year

During the year under review, there were no changes in the Company's Subsidiaries, Joint Venture/ Associate Companies.

Fixed Deposits and Loans/ Advances

Your Company offers a wide range of Fixed Deposit schemes that cater to the investment needs of various cLasses of investors. These Deposits carry attractive interest rates with superior service enabLed by robust processes and technoLogy. In order to tap ruraL and semi-urban savings, your Company continues to expand its network and make its presence feLt in the most remote areas of the country.

During the year, CRISIL and India Care Ratings Private Limited (FITCH) have reaffirmed a rating of 'CRISIL AAA/StabLe' and 'IND AAA/StabLe' respectiveLy. your Company's Fixed Deposit program which represents highest degree of safety and security of principaL as weLL as timeLy payment of interest. Your Company's Deposits continue to be a preferred investment avenue amongst the investors.

Mahindra Finance accepts deposits from both retaiL and corporate investors. During the year, your Company has mobiLized funds to the tune of ' 6,620.13 Crore from fixed deposits. The consoLidated deposit book of Mahindra Finance stood at ' 10,926.45 Crore as on 31^st March 2025, with an investor base of over 1,01,324 investors.

Digital initiatives

Your Company continues to take rapid strides in improving its digitaL footprint and enabLing an end-to-end paperLess process. Your Company has Launched Mahindra Finance Customer App enabLing customer to enjoy muLtipLe services and products from Mahindra Finance under one pLatform.

Your Company continues to serve the investors by introducing severaL customer centric measures on an ongoing basis to further strengthen its processes in sync with the requirements of the Fixed Deposit ("FD") hoLders. Your Company periodicaLLy sends various intimations via SMS, e-maiLs, post, courier etc., to its investors as weLL as sends reminder emails to cLients whose TDS is LiabLe to be deducted before any payout/accruaL. Your Company aLso provides a digitaL pLatform for onLine appLication/ renewaL of deposits, onLine generation of TDS certificates from customer/ broker portaL and seamLess investment process for its empLoyees.

Your Company has roLLed out severaL customer centric and technoLogicaL initiatives aimed at offering a superior experience to fixed deposit hoLders. Some key ones incLude:

¦    Empowering customers to on board and avaiL servicing through Mahindra Finance Customer App.

¦    Improved customer experience by introducing Digi-Locker based KYC verification to increase coverage of digitaL on boarding.

¦    Introduced partiaL renewaL of FD to reduce the hassLe of rebooking for our customers.

¦    DeveLoped and integrated UPI intent flow to reduce the chances for payment faiLures.

With respect to Fixed Deposits accepted by the Company there has been no default in repayment of principaL or interest on fixed deposit during the year under review.

Your Company being a Non-Banking FinanciaL Company the discLosures required as per RuLe 8(5)(v) and (vi) of the Companies (Accounts) RuLes, 2014 read with Sections 73 and 74 of the Companies Act, 2013, are not appLicabLe to it.

The information pursuant to CLause 35(1) of Master Direction DNBR.PD.002/03.10.119/2016-17 dated 25^th August 2016 issued by the Reserve Bank of India on Non-Banking FinanciaL Companies Acceptance of PubLic Deposits (Reserve Bank) Directions, 2016 ("NBFC ReguLations"), regarding unpaid/uncLaimed pubLic deposits as on 31^st March 2025, is furnished beLow:

i.    TotaL number of accounts of PubLic Deposits of the Company which have not been cLaimed by the depositors after the date on which the deposit became due for repayment: 3434.

ii.    TotaL amounts due under such accounts remaining uncLaimed beyond the dates referred to in cLause (i) as aforesaid: ' 3.81 crore.

Reminders are being sent to the Depositors to cLaim their uncLaimed amounts. Measures taken by the Company to reduce uncLaimed amount incLude penny drop testing, reaching out investors through SMS/ CaLLs/ EmaiL/PhysicaL Letters, assisting nominees, LegaL heir on cLaim settLement process. Company is continuousLy improving and evoLving its operationaL practices to reduce the uncLaimed amounts pertaining to Fixed Deposits.

Pursuant to the provisions of Section 186(4) of the Act, details with regard to the investments made by the Company, as appLicabLe, are given in Note no. 51 (iv) o1 the Standalone financial statements, forming part o1 this Annual Report.

Achievements

Awards/Recognitions received by your Company

during the year are enumerated hereunder:

CSR

¦    Honoured with the Best CSR Initiative & Best Financial Inclusion Initiative Award at the prestigious DNA Awards 2024.

¦    Mahindra Finance's 'Swabhimaan' initiative was honoured with the CSR Project of the Year Award 2023-24 at the India CSR Summit & Awards.

Human Resources

¦    Awarded for its 'Transformational Leadership Development Program' in the category of 'Best Learning & Development Program of the Year- NBFC/HFC/MFI' at the ETBFSI ExceLLer Awards 2024.

¦    Recognised as one of the best workplaces in the categories of 'Top rated Large Company' & 'Top rated financiaL services Company' at the AmbitionBox EmpLoyee Choice Awards 2024.

¦    Awarded "Bombay's WOW WorkpLace Award 2025” for out commitment to buiLding an inspiring, empLoyee-first workpLace.

¦    Recognised as the 'Best NBFC in TaLent & Workforce' at the 29^th Edition of Best Banks and NBFCs Awards organised by Business Today.

Marketing

¦    Awarded for content fiLm 'Main SambhaaL Lungi' in the category of Community Connect at the e4m Do Good Awards.

¦    Won the 'Location-Based Marketing Campaign of the Year' award at the e4m Indian DigitaL Marketing Awards 2024.

Sustainability

¦    Ranked 1^st at BW Business WorLd India's Most SustainabLe Companies 2024 in the FinanciaL Services and Insurance Sector.

¦    Won the GoLd Award for Education and SkiLLs DeveLopment and won the Bronze Award for EnvironmentaL SustainabiLity' at the ACEF Asian Business Leaders Awards 2024.

¦    Mahindra Finance has increased its Dow Jones SustainabiLity Index (DJSI) score to '50' becoming best-in-cLass for Listed NBFCs in India.

Employee Stock Option Scheme- 2010 and Restricted Stock Unit Plan- 2023

With a view to continue the practice of rewarding performance of the empLoyees, creating ownership culture and to retain, motivate and attract taLent in Light of growing business your Company has adopted Restricted Stock Unit PLan nameLy 'Mahindra and Mahindra FinanciaL Services Limited-Restricted Stock Unit PLan 2023' ("MMFSL RSU PLan-2023”) and Mahindra & Mahindra FinanciaL Services Limited EmpLoyees' Stock Option Scheme-2010 ("2010 Scheme”).

During the year under review, your Company granted 6,49,326 Restricted Stock Units ("RSU's”) to the eLigibLe empLoyees under MMFSL- RSU PLan 2023. No options were granted under the Mahindra & Mahindra FinanciaL Services Limited EmpLoyees' Stock Option Scheme-2010 ("2010 Scheme”).

The Company does not have any scheme to fund its empLoyees to purchase the shares of the Company.

The 2010 Scheme and the MMFSL RSU PLan - 2023 of the Company is in compLiance with the Securities and Exchange Board of India (Share Based EmpLoyee Benefits and Sweat Equity) ReguLations, 2021 ("SBEBSE ReguLations”) and there were no amendments to the aforesaid Scheme and PLan during FY2025. A Certificate from M/s. KSR & Co, Company Secretaries, LLP, SecretariaL Auditor of the Company for FY2025, certifying that the Company's above-mentioned Scheme and PLan have been impLemented in accordance with the SBEBSE ReguLations and the resoLution passed by the Members, wouLd be made avaiLabLe for inspection by the Members through eLectronic mode at the AnnuaL GeneraL Meeting ("AGM”) scheduLed to be heLd on 22^nd JuLy 2025.

The appLicabLe discLosures as stipuLated under SBEBSE ReguLations for the year ended 31^st March 2025, with regards to the 2010 Scheme, MMFSL RSU PLan 2023 and Company's stock option trust is upLoaded on the Company's website and can be accessed at the web-Link: https://www.mahindrafinance.com/investor-reLations/ financiaL-information#annuaL-reports .

In terms of reguLation 46(2)(za) of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015, the Company has upLoaded 2010 Scheme and MMFSL RSU PLan-2023 on its website and the same can be accessed at https://www.mahindrafinance.com/ investor-reLations/discLosures-under-reguLation-46-and-62-of-sebi-Lodr

Environment, Social and Governance Sustainability Vision

Mahindra Finance has estabLished its sustainabiLity mission through a board-approved sustainabiLity poLicy that buiLds on the Mahindra Rise principLes of 'Rise for a More Equal World', 'Rise to Be Future Ready' and 'Rise to Create VaLue'. The focus of FY2025 was to Lay the brickwork for Long-term initiatives aLigned to the above three principLes whiLe buiLding capacity of internaL stakehoLders to integrate sustainabiLity practices into the business operations. The priority areas for sustainabiLity integration into the business ethos was cLimate change, innovative energy transition, incLusive poLicies, and stakehoLder engagement.

Climate Change

CLimate change management at Mahindra Finance has a two-pronged approach - (1) protection of Mahindra Finance assets and offices from increased probabiLity of extreme cLimate events and (2) reduction of the carbon footprint across the vaLue chain.

1)    Mahindra Finance undertook a cLimate change scenario anaLysis for the 1350+ offices of the company to understand impact from extreme cLimate events (fLood, drought and cycLonic events) in a worst-case scenario. The resuLts of the scenario anaLysis were pubLished in the previous Integrated Report and a comprehensive cLimate action pLan was deveLoped in-house for offices in highLy prone areas. The action pLan defines processes for stabiLizing existing office structures, creating earLy warning systems for cLimate hazards, estabLishing disaster management infrastructure and integrating cLimate hazard risk in the audit checkLists for new faciLities and periodic audits.

Mahindra Finance has aLso initiated a study to map the existing vehicLe and tractor financing portfoLio with cLimate hazard prone areas. The piLot study wiLL be integrated into the FY2026 cLimate strategy to de-risk the company from increased cases of defauLt and non-performing assets due to extreme cLimate events. The piLot study wiLL then be roLLed out for other business verticaLs of Mahindra Finance.

2)    The Long-term targets for reduction of the carbon footprint across the vaLue chain was decLared through Science Based Targets Initiative (SBTi) in FY2023 and defined in the previous Integrated Report. The targets focus on a 50.4% reduction in direct emissions (Scope 1) and indirect emissions (Scope 2) as of FY2032 compared to the baseLine vaLues determined in FY2023. The targets aLso incLude a 58.1% reduction in indirect emissions (Scope 3) across the same timeLine for specific activities in the vaLue chain - purchased goods

and services, business traveL, empLoyee commute, waste generation, and purchased capitaL goods. SustainabiLity initiatives in FY2025 focused primariLy on waste reduction through 100% recycLing of waste streams and energy transition that has resuLted in a ~20% reduction of energy usage compared to FY2023 baseLine vaLues. The efforts have resuLted in a net reduction of absoLute scope emissions (scope 1-3) by 11,300+ tonnes CO₂ compared to previous year.

Innovative Energy Transition

Mahindra Finance has buiLt on the energy reduction initiatives that had been commissioned in FY2023 incLuding 100% conversion to Light emitting diodes (L.E.D.), procurement of 5* energy saving air conditioners, soLar-powered air conditioners, and instaLLation of brushLess DC motor (BLDC) fans. A piLot program for the purchase of green energy at the Mahindra Finance corporate office in KurLa, Mumbai was initiated in November 2024 with intentions to expand across other Mahindra Finance offices in Locations where the reguLatory Landscape permits the purchase of green tariffs. The above energy initiatives have contributed to reduced energy costs, reduced emissions from purchase of grid-based energy (Scope 2) and use of newer safer technoLogy in active office buiLdings.

Inclusive Policies

Mahindra Finance announced its membership to the United Nations GLobaL Compact (UNGC) in FY2024 to show its commitment to human rights, good working conditions and ethicaL practices in the workpLace. In FY2025, a Human Rights Due DiLigence (HRDD) study was commissioned to evaLuate the human rights poLicies and procedures, conduct consuLtations with empLoyees across LeveLs to determine on-ground impLementation of these procedures, review efficacy of data privacy programs and extension of the above to major suppLiers in the vaLue chain. The resuLts of the study wiLL be impLemented in FY2026 to strengthen the human rights process across the Mahindra Finance vaLue chain.

Training programs on the human rights topics was expanded to the entire workforce in FY2025 incLuding the incorporation of these topics in the empLoyee induction and refresher programs. Diversity, equity & incLusion (DE&I) programs were expanded in FY2025 to incLude impactfuL gender representation initiatives, LocaLized EmpLoyee Resource Groups (ERGs), progressive poLicies fostering workpLace equity, and focused empLoyee sensitization efforts to promote an incLusive cuLture.

Looking Forward to FY2026 on Sustainability

The focus of FY2026 is to buiLd on sustain ability initiatives that have commissioned in FY2025 and to better integrate sustainabiLity into the business operations. A dedicated sustainability department has been created in FY2025 to ensure adequate allocation of resources for the long-term sustainability vision and to increase senior management oversight on the topic. The mandate of the CSR board sub-committee has been expanded in the latter half of FY2025 to incorporate updates on the sustainability performance of the company and to approve sustainability policies and procedures. Operational committees with key departments including HR, risk and finance are being formulated in FY2026 to ensure integration of sustainability topics in day-to-day management. The process of integrating Environment, Social and Governance (ESG) risk management into the business loan cycle is being developed to align with global expectations on a sustainable investment strategy.

A big focus of the next financial year is to align with the Mahindra Rise commitment of "Making Sustainability Personal” by creating training and capacity building programs for internal and external stakeholders to better understand and integrate sustainability in business as usual. Standard Operating Procedures ('SOPs') and digital tools are being evaluated to standardize sustainability reporting methodologies and ease the process of data gathering and reporting. Training programs are being developed in parallel for department heads to understand global trends in sustainability and to be able to efficiently integrate the topic in their functional responsibilities on a day-today basis.

Social Initiatives - Diversity, Equity, and Inclusion ("DE&I")

Diversity, Equity, and Inclusion (DE&I) remain central to Mahindra Finance's vision of fostering a workplace that values and empowers every individual. In FY2025, focused efforts were made to address gender gaps, promote equity, and embed inclusive practices across the organization, with a commitment to continued progress in the years ahead.

¦ Empowering Women:

Initiatives like Prarambh provided specialized training to women from Tier III and Tier IV cities, resulting in over 150 hires in frontline roles. The SOAR Program enabled women professionals to return to impactful roles after career breaks with support enabled through carefully crafted mechanisms. Focused recruitment drives across

50+ locations introduced diverse talent into key positions across branches.

¦    Progressive Policies:

Policies such as maternity transition support, IVF reimbursement, menstrual wellness, caregiving assistance, and gig working opportunities were enhanced to create equitable opportunities and address the evolving needs of the workforce.

¦    Fostering inclusion:

Inclusion-focused programs like MWoW (Mahindra Finance World of Women) established 7 regional ERGs to address hyper-local challenges and create platforms for growth and engagement. Initiatives like Perspective Building, Spectrum'24 - Inclusion Week, which engaged over 5,000 employees, and sensitization workshops such as Beat the Bias, Leading as an Ally, drove awareness and allyship across teams.

¦    Recognition and Future focus:

Mahindra Finance was awarded the Mahindra Group Rise Award for its DE&I efforts. Participation in forums and thought leadership platforms reinforced the organization's commitment to driving systemic change and fostering inclusive growth.

Looking ahead, DE&I will continue to be a key focus area, with plans to scale initiatives, deepen impact, and build a workplace that reflects Mahindra Finance's purpose-driven approach to empowering lives and communities.

Stakeholder Engagement

A stakeholder engagement program has been defined and disclosed in the previous Integrated Reports. During FY2025, the stakeholder engagement program focused on two stakeholder groups namely, local communities and customer interface teams.

Mahindra Finance understands the importance of effectively managing the customers and provide a seamless experience. To address this the Company has undertaken strong steps in call centre management, which is now available 365 days (except national holidays) and serves 10 different languages. Your Company has also undertaken skill upgradation training programs for customer facing staffs to help address queries seamlessly. A dedicated centralised resolution team has also been created to provide bureau related concerns with less turnaround time. Through these initiatives, your Company aims to increase the customer satisfaction index and address customer queries in a shorter period of time.

Business Responsibility and Sustainability Report

Your Company continued to uphold a high standard of regulatory compliance and transparency through disclosure of sustainability initiatives in the public domain. In compliance with Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has disclosed its Business Responsibility and Sustainability Report ("BRSR”) for the previous two financial years as part of its Integrated Report ("IR”). Your Company has increasingly disclosed data on 'leadership indicators' in BRSR over the last three years and is currently reporting on all leadership parameters defined in the nine principles of 'BRSR Section C Principle Wise Performance Disclosure.'

Your Company subscribes to the Dow Jones Sustainability Index ("DJSI”) program where it has achieved a score of '50' in FY2024 that is best-in-class when compared to other listed NBFCs in India.

Governance

Your Company's sustainability team has foflowed two environmental and social (E&S) scorecard methodologies in FY2025 - risk management and outcome-based performance matrices. The E&S risk management scorecard has been integrated into the Internal Capacity Adequacy Assessment Process (ICAAP) with modules related to ESG policy, sustainability roadmap, exclusion list principles, carbon reduction, energy transition, climate transition risk management and audit scope parameters. Additionally, a business scorecard is developed for the sustainability team that focuses on scope emission reduction targets, supply chain engagement and Mahindra Group collaboration. The score from the above processes is also integrated into the CXO compensation matrix for the financial year to ensure senior management oversight on sustainability issues.

Your Company engages with the larger Mahindra Group resources through a quarterly 'Sustainability Council' where challenges and opportunities across the group are discussed and commonalities are jointly addressed. The Sustainability Council also provides an opportunity for cross-training of sustainability personnel and sharing of case studies. An independent agency within Mahindra Group - Mahindra Institute of Quality (MIQ), independently reviews the performance of Mahindra Finance sustainability policies and procedures.

Integrated Reporting

Your Company is pleased to present its holistic performance for FY2025, in the Integrated Report of the Company. This report includes details such as

the organisation's strategy, governance framework, performance and prospects of value creation based on the six capitals- Financial, Manufactured, Intellectual, Human, Social & Relationship and Natural capital.

Corporate Social Responsibility (CSR)

Established in 1991, Mahindra Finance, a leading NBFC is a proud partner of India's growth, taking financial services to the farthest corners of the country. We are continually adapting to the evolving needs of our customers, leveraging technology and our strategic partnerships to widen the ambit of and access to financial services while remaining committed to our social responsibility. Led by our #TogetherWeRise ethos, we build abiding relationships of trust with our communities and strives to become an asset in the communities where we operate. Your Company's Corporate Social Responsibility (CSR) initiatives focus on areas, namely Education & Livelihood, Healthcare and Environment. We believe in providing opportunities to the underprivileged communities to enable them to rise by designing the areas of interventions that are aligned with the Company's purpose to drive positive change in the lives of our communities. Together, we are paving the way for a brighter tomorrow for all.

1. CSR Committee

Your Company has duly constituted a CSR Committee in accordance with Section 135 of the Companies Act, 2013 to assist the Board and the Company in fulfilling the corporate social responsibility objectives of the Company. The Committee presently comprises of the following Directors as on 31^st March 2025:

Name	Category
Mr. Diwakar Gupta (Chairperson)*	Independent Director
Mr. Vijay Kumar Sharma**	Independent Director
Mr. Raul Rebello***	Managing Director & CEO

* Mr. Dhananjay Mungale ceased to be member and the Chairperson of the CSR Committee with effect from 23^rd July 2024. Mr. Diwakar Gupta was appointed as the member and the Chairperson of the Committee with effect from 24^th July 2024.

** Mrs. Rama Bijapurkar ceased to be member of the CSR Committee with effect from 23^rd July 2024. Mr. Vijay Kumar Sharma was appointed as the member of the Committee with effect from 24^th July 2024.

*** Mr. Ramesh Iyer ceased to be member of the Committee upon superannuation with effect from 29^th April 2024. Mr. Raul Rebello was inducted as the member of the Committee with effect from 30^th April 2024.

• During the year under review, 3 CSR Committee Meetings were heLd, details of which are provided in the Corporate Governance Report. The CSR Committee inter-aLia, reviews and monitors the CSR as weLL as BRSR activities. During the year under review, the terms of reference of CSR Committee were enhanced to specificaLLy include enhanced review of Environment, Social and Governance aspects ("ESG”).

2.    CSR Policy

The CSR PoLicy outLines the approach and guidance provided by the Board, basis recommendation of CSR Committee, for undertaking CSR Projects and Lays down the guiding principles for seLecting, implementing and monitoring CSR projects incLuding AnnuaL Action PLan. The PoLicy outLines CSR thrust areas, which aLign with the Mahindra group core purpose of driving positive change in the Lives of the communities. Company endeavors to create sociaL, economic and environmentaL change by investing in projects that promotes education, skiLL training, heaLth care, sanitation, environmentaL sustainabiLity, financiaL Literacy etc.

The CSR PoLicy incLuding a brief overview of the projects or programs undertaken by the Company can be accessed the same on the website of the Company at:

https: // www.mahindrafinance.com/ investor-reLations/poLicy-and-sharehoLder-information#mmfsL-poLicies

3.    CSR Initiatives

Key CSR Achievements for FY2025

(i) 'Dhan Samvaad'- CSR Flagship Program

Your Company has Launched CSR flagship program "Dhan Samvaad” which addresses a criticaL need among gig workers and nano, micro-enterprises, who often Lack access to formaL financiaL education and digitaL tooLs. By bridging this knowLedge gap, the initiative aims to foster financiaL incLusion and enhance the economic resiLience of this vitaL segment of the workforce.

The comprehensive program covers a wide range of topics, incLuding banking basics, savings strategies, e-waLLet usage, investment fundamentaLs, insurance principLes, and key government schemes. Through a combination of interactive workshops, onLine moduLes, and hands-on training, participants gained practicaL skiLLs to manage their finances effectiveLy in the digitaL era.

The program aLso focused on raising awareness as weLL as increased Linkages about reLevant centraL and state LeveL government schemes for amongst targeted beneficiaries whiLe providing information and hands-on support for using digitaL tooLs Like Digi Locker.

Dhan Samvaad is a significant effort to empower individuaLs and smaLL businesses with the financiaL knowLedge necessary for sustainabLe deveLopment. This program pLayed a cruciaL roLe in creating a more financiaLLy savvy and digitaLLy empowered community, uLtimateLy contributing to India's economic progress. Resources used during the program are aLigned with the Reserve Bank of India (RBI)'s FinanciaL IncLusion and DeveLopment program.

Major highLights of the Dhan Samvaad program incLudes,

¦    TotaL outreach - 2,07,700+ beneficiaries educated on financiaL and digitaL Literacy, boosting their digitaL and financiaL skiLLs

¦    77,800+ of the totaL outreach (37%) are Women Entrepreneurs: EnabLing Women Entrepreneurs

¦    1,57,000+ (76%) individuaLs enhanced digitaL identity by adopting the Digi Locker app.

¦    1,37,000+ (66%) individuaLs were Linked with different Government sociaL security schemes nameLy PMSBY, PMJJBY, E- Shram Card, Sukanya Samriddhi Yojna, Udyam Registration, AtaL Pension Yojana etc.

¦    Covered 40+ Districts, 7 States reaching diverse communities.

(ii) Saksham Scholarship Project

Saksham SchoLarship for underpriviLeged students is an initiative to provide financiaL assistance to underpriviLeged chiLdren to support them in continuing their education.

The project beLieves in empowering the academic and career goaLs of chiLdren by removing the financiaL barrier. The schoLarship is open for students from muLtipLe states across India. Students studying in CLasses 1 to 12, graduation, and post-graduation LeveLs are eLigibLe. In FY2025, your Company provided Saksham SchoLarship to around 2,960+ schoLars.

(iii)    E/Auto Rickshaw driving training for women

Your Company continued E/Auto Rickshaw driving training for women. Under this project, eLigibLe women were supported with skiLL training to drive an auto/ E auto/ UtiLity vehicLe and heLp them obtain LiveLihood opportunities. ALong with the vehicLe driving skiLLs, women were supported to obtain driving Licenses. SeLf-defence skiLLs, interpersonaL skiLLs and financiaL and digitaL skiLLs were aLso imparted as part of this project. Further women were encouraged to take to the jobs as chauffeurs and seLf-empLoyment.

In FY2025, your Company trained 550+ women through this project from Madhya Pradesh, TamiL Nadu and Puducherry. These women received permanent driving License aLong with LeveL 4 SkiLL India Certificate and pLacement Linkages.

(iv)    Employability skills training project

This project creates a cadre of workforce with essentiaL empLoyabiLity skiLLs incLuding domain knowLedge and soft skiLLs. Provided skiLL training to youth for BCBF (Business Correspondent & Business FaciLitator) and iTES-BPO (Information TechnoLogy EnabLed Services) and make them job ready and resiLient for the future and improve their LiveLihood.

In FY2025, your Company provided empLoyabiLity skiLLs training to 210+ candidates in Mumbai, Maharashtra aLong with pLacement Linkages to 170+ candidates.

(v)    Nanhi Kali

Project Nanhi KaLi provides skiLLs training to girLs studying in Grades 6 to 10 thereby heLping them to make a smoother transition from schooL to the workpLace.

The program focuses on honing essentiaL skiLLs, encompassing financiaL Literacy, digitaL skiLLs, soft skiLLs such as criticaL thinking and communication, and fostering an understanding of gender reLations. This wiLL be deLivered during schooL hours.

It aLso focuses on physicaL education moduLes wherein a professionaLLy designed sports education moduLe excLusiveLy for girLs gives them an opportunity to participate in reguLar fitness activities thereby promoting their weLLbeing. The program further heLps buiLd Leadership skiLLs and teamwork whiLe striving for exceLLence through sports.

Your Company supported the education of 14,630 Nanhi KaLis from Secondary schooL (CLass 6 to 10)

for the academic year 2024-25 across 12 districts from 5 states in India.

(vi)    Mahindra Pride Classroom (MPC)

Your Company continued its support to Mahindra Pride CLassroom (MPC) project to reach out to marginaLised women to create job opportunities in various sectors and enabLe women to become financiaLLy independent and participate activeLy in the workforce.

Under this program, we conducted minimum 40 hours training for 47,800+ finaL year femaLe students in cLassrooms across government/ government aided coLLeges, poLytechnics, industriaL training institutions, empLoyer premises etc. to enhance their empLoyabiLity prospects. The moduLar MPC training program focusses on Life, Language and aptitude skiLLs. To faciLitate students who have been trained in the MPC are pLaced with organizations working in their core trade/ domain an innovative, tech-enabLed job drive, known as 'Job Utsav' is conducted to bring together the best empLoyers and a great taLent pooL trained under the MPC program.

(vii)    Mahindra Pride Skill centers (MPSC)

You Company continued its support to MPSC which are specificaLLy designed to economicaLLy empower women through training in domain and empLoyabiLity skiLLs. The major trades covered are ITES, retaiL, hospitaLity, BFSI and other sectors. By addressing the unique requirements of the job market and emphasizing the deveLopment of both technicaL and soft skiLLs, the modeL aims to equip women with the knowLedge, skiLLs and confidence needed to succeed in their careers. As part of this initiative, 1,000 women were trained under IT / ITES, retaiL, coding, hospitaLity, TaLLy, IT & GST and 80% of the trained women supported in securing a gainfuL empLoyment.

(viii)    Project Hariyali

With an aim of sustainabLe environment, your Company promoted pLantation of trees which provides green cover as weLL source of LiveLihood to farmers/LocaL communities.

In FY2025, your Company pLanted 77,000 sampLings on around 570 farmer's Land from 30 viLLages in two districts in Gujarat. The pLantation incLudes a mix of native and fast-growing species Like Teak, Mahagony, Bamboo, Drumstick, AonaLa, Mango, Neem etc. which enhance carbon sequestration and improve LocaL biodiversity.

Additionally, it provides income sources for small and marginal, farmers through sustainable forestry. Further it engages communities in environmental stewardship and raises awareness about climate change.

Also, your Company supported the maintenance (nurturing and caring) and survival, of previously planted saplings in the Financial Year 2023-24 and 2022-23 as part of Project Hariyali in the Araku region, Andhra Pradesh.

(ix)    Water Conservation Project

As part of Environmental Sustainability, your Company has been championing the water conservation cause over 3 years in the remote tribal areas of Murbad and Shahapur blocks in Thane district, Maharashtra. Through these consistent efforts, over 8.7 crore litres of water have been conserved, ensuring access to water for household and agriculture purpose, enabling farmers to take multiple crops.

In FY2025, your Company made Investment in sustainable water resource management projects such as construction of 11 Rainwater Harvesting Structures in zilla parishad schools conserving over 0.46 crore Liters of water. Built/repaired 3 check dams and desilting of a Lake, creating potential to save over 2.45 crore liters of water in the surrounding areas. Through this project, we expect to consere 2.91 crore litres of rainwater for irrigation, ensuring water accessibility round the year for household and farming purpose, thus enabling farmers to take up 2-3 crops in a year and supporting 2,800 beneficiaries.

(x)    Project Sehat

In the area of healthcare, your Company organized nationwide blood donation drives in which 4,279+ Blood Units were collected, Pan India. Your Company also conducted 2 health camps, benefiting 300 individuals.

Employees Volunteering

Your Company has consistently fostered a culture of social responsibility by encouraging employees to actively participate in diverse CSR initiatives, driving meaningful change within the community. During the reporting period, over 23,250 employees—an impressive 91% of the workforce—dedicated more than 1,10,600 person-hours to numerous impactful virtual and physical CSR initiatives. These initiatives included life-saving Blood Donation drives, transformative Swachh Bharat campaigns, and empowering programs like Samantar, Sehat, and Gyandeep. Through these efforts, your

company has reaffirmed its unwavering commitment to creating a positive and lasting impact on society.

Stakeholder Engagement - In FY2025, your company organized the "Partner Meet” on 11^th February 2025, bringing together 28 representatives from 15 implementation partners for a day dedicated to collaboration, networking, and knowledge sharing. This impactful stakeholder engagement provided an invaluable opportunity to strengthen partnerships, interact with senior management, and exchange best practices among diverse implementation partners, fostering collective growth and innovation.

During the event, your Company celebrated excellence by honoring four of its partners (NGOs) with the prestigious title of "Best CSR Implementation Partners 2025,” while extending tokens of appreciation to the remaining partners, acknowledging their remarkable contributions. Furthermore, the meet featured a capacity-building workshop on "Appreciative Inquiry -A Tool for Personal and Organizational Effectiveness,” equipping attendees with transformative strategies to enhance their impact. This initiative underscores your company's unwavering commitment to driving meaningful collaboration and empowering its partners to achieve greater success in CSR implementation.

4.    CSR Spend

As per the provisions of Section 135 of the Companies Act, 2013 ("the Act”) read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules”), the mandatory CSR spend of the Company for FY2025 was ' 34.58 Crore against which your Company has spent ' 34.61 Crore during the year. Your Company has fully spent unspent CSR amount of FY 2024 towards ongoing program on Financial & Digital Literacy Project., details whereby are given in "Annexure I" of this report.

Further, in terms of the CSR Rules, the Chief Financial Officer of the Company has certified that the funds disbursed have utilised for the purpose and in the manner approved by the Board for FY2025.

5.    Annual Report on CSR Activities

The Annual Report on the CSR activities undertaken by your Company during the year under review, as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is set out in "Annexure I" of this Report.

6.    Impact Assessment of CSR Projects

In compliance with the provisions of Section 135 of the Companies Act 2013 read with sub-rule (3) of rule 8 of the Companies (Corporate Social Responsibility

Policy) Rules, 2014, impact assessment has been carried out for the following eligible projects:

CSR projects pertaining to FY2022 requiring Impact Assessment

¦    Nanhi Kali

¦    Mahindra Pride School & Classrooms

¦    Women economic empowerment

CSR projects pertaining to FY2023 requiring Impact Assessment

¦    Swabhimaan

Your Company had engaged independent agencies to carry out the impact assessment for the aforesaid projects. The Executive Summary of the Impact Assessment Reports, with respect to the abovementioned eligible CSR projects of FY2022 and FY2023, is annexed with "Annexure I" of this Report and the complete Impact Assessment Report of the applicable projects can be accessed at the web-link https://www.mahindrafinance.com/ together-we-rise#csr-reports.

Additionally, your Company has been proactively conducting an impact assessments of the selected CSR projects on a voluntary basis to evaluate the effectiveness. As a testament to its commitment to exemplary corporate governance, the Company also undertakes voluntary financial audits to ensure transparency and accountability.

The executive summary and web-links of impact assessment reports with respect to Company's CSR projects undertaken in FY2024 which meet the prescribed criteria, will be provided once the same are completed.

Cyber Security

Your Company has made significant strides in bolstering organization's cybersecurity framework to safeguard both internal and customer data. In an era where digital threats are increasingly sophisticated, we have prioritized the implementation of robust measures to ensure the integrity, confidentiality, and availability of critical information assets.

To enhance your organization's defence, we have deployed a suite of advanced cybersecurity tools tailored to address current and evolving risks. These include systems to prevent unauthorized data exfiltration, comprehensive threat detection and response mechanisms, real-time monitoring and analysis solutions, protective measures for our online assets, and solutions to secure our mobile endpoints. These tools collectively form a multi-layered shield around our digital infrastructure and processes.

In addition, your Company has established a 24/7 Security Operations Centre (SOC) dedicated to monitoring cybersecurity alerts and responding to incidents immediately to initiate remedial measures.

This ensures that potential threats are identified and mitigated swiftly, minimizing any risk to our operations or data.

Your Company has also significantly improved, organization's vulnerability management process by automating scanning and remediation efforts. By leveraging industry-leading scanning and patching tools, we have streamlined the identification and resolution of vulnerabilities, thereby enhancing our overall security posture.

To validate the effectiveness of these investments, management is also conducting Red Team assessment by an external certified entity. These proactive assessments test your organization's cyber defences under real-world conditions, ensuring that the tools and processes we have implemented deliver the expected resilience and protection.

These enhancements reflect our unwavering commitment to safeguarding the trust placed in us by our customers, partners, and you, our shareholders.

Annual Return

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with rule 11 and 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return in Form No. MGT-7, is available on the Company's website and can be accessed at the web-link https://www.mahindrafinance.com/investor-relations/financial-information#annual-reports .

Board & Its Committees Board

Your Company recognises and embraces the importance of a diverse Board in its success. The confluence of Directors on the Board with different knowledge and skills, perspective, regional and industry experience, cultural and geographical background ensures that your Company retains its competitive advantage.

As on 31^st March 2025, the Board of your Company consisted of 8 Directors comprising of a Non-Executive Chairperson, 1 Executive Director, 2 Non-Executive NonIndependent Directors and 4 Independent Directors, of whom 1 is a woman Director.

Committees constituted by the Board of Directors

The Board Committees are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

 

The details of the Board Committees aLong with their composition, powers, terms of reference, etc. are given in the Report on Corporate Governance, which forms part of this Annual Report.

Audit Committee

As on 31^st March 2025, the Audit Committee comprised of 3 Independent Directors and 1 Non-Executive NonIndependent Director:

Name	Category
Mr. Diwakar Gupta	Chairperson of the Committee (Independent Director)
Mr. MiLind Sarwate	Independent Director
Mr. Vijay Kumar Sharma	Independent Director
Mr. Amarjyoti Barua	Non-Executive Non- Independent Director

Changes in Audit Committee Members during FY2025:

¦    Mr. Dhananjay MungaLe, Mrs. Rama Bijapurkar ceased to be Member of the Committee effective 23^rd July 2024 and Mr. Chandrashekhar Bhave ceased to be Chairperson and Member(s) of the Committee effective 2^nd February 2025; upon completion of their 2^nd term as Independent Director(s) of the Company.

¦    Mr. Diwakar Gupta was appointed as Chairperson of the Committee w.e.f 3^rd February 2025.

The composition of Audit Committee is in compliance with the minimum requirement prescribed under the Act, Securities and Exchange board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended and the Master Direction - Reserve Bank of India (Non-Banking FinanciaL Company - ScaLe Based Regulation) Directions, 2023 of having a minimum of two-thirds of independent directors, incLuding the Chairperson. ALL members of the Committee are nonexecutive directors possessing financiaL Literacy, and expertise in accounting or financiaL management reLated matters.

During the year under review, 11 Audit Committee Meetings were heLd. Further, the terms of reference of the Audit Committee were enhanced during the year under review to specificaLLy incLude review of compLiances under RBI directions/ circuLars/ guideLines, review of POSH Report and its poLicy, information security audit/ poLicy etc. ALL the recommendations of the Audit Committee were approved and accepted by the Board during the year under review.

Meetings and Postal Ballot

The Board of Directors met 9 times during the year under review i.e., on 23^rd April 2024, 4^th May 2024, 7^th June 2024, 23^rd JuLy 2024, 13^th September 2024,

22^nd October 2024, 28^th January 2025, 13^th February 2025 and 24^th March 2025, as against the statutory requirement of at Least four meetings. The requisite quorum was present at aLL the Board Meetings. The maximum time gap between any two Meetings was not more than one hundred and twenty days. These Meetings were weLL attended. The 34^th AGM of the Company was heLd on 23^rd JuLy 2024 through Video Conference.

During the year under review, no Extraordinary GeneraL Meeting ("EGM") of the Members was heLd and no resoLution was passed by the Members through PostaL BaLLot.

DetaiLed information on the Meetings of the Board, its Committees, and the AGM is incLuded in the Report on Corporate Governance, which forms part of this AnnuaL Report.

A caLendar of aLL the meetings is prepared and circuLated weLL in advance to the Directors.

Meetings of Independent Directors

The Independent Directors met twice during the year under review, on 24^th September 2024 and 24^th March 2025. The Meetings were conducted without presence of the WhoLe-time Director(s), the NonExecutive Non-Independent Directors, Chief FinanciaL Officer or any other Management PersonneL to enabLe the Independent Directors to discuss matters pertaining to, inter-aLia, review of performance of NonIndependent Directors and the Board as a whoLe, review the performance of the Chairperson of the Company, assess the quaLity, quantity and timeLiness of flow of information between the Company Management & the Board and its Committees and free flow discussion on any matter that is necessary for the Board to effectiveLy and reasonabLy perform their duties.

Directors and Key Managerial Personnel

Appointment/Re-appointment of Directors during FY2025 and up to the date of this report

¦ Re-appointment of Mr. Milind Sarwate (DIN: 00109854) as an Independent Director

Basis approvaL /recommendation of the Nomination and Remuneration Committee ("NRC") and the Board, the members of the Company have at the AnnuaL GeneraL Meeting heLd on 28^th JuLy 2023, approved the re-appointment of MiLind Sarwate (DIN: 00109854) as Independent Director of the Company for a second term of five consecutive years each, commencing from 1^st April 2024 to 31^st March 2029 (both days incLusive) not LiabLe to retire by rotation.

¦    Appointment of Mr. Raul Rebello (DIN: 10052487) as the Managing Director & CEO

Basis recommendation/ approvaL of NRC and the Board of Directors, the Members of the Company had approved appointment of Mr. RauL RebeLLo (DIN: 10052487), as the WhoLe-time Director and KMP designated as Executive Director and MD & CEO-designate with effect from 1^st May 2023 to 29^th ApriL 2024 (both days incLusive) and as the Managing Director & CEO of your Company with effect from 30^th ApriL 2024 up to 30^th April 2028 (both days incLusive), LiabLe to retire by rotation.

Mr. RauL RebeLLo assumed the position of "Managing Director & CEO" of the Company w.e.f., 30^th April 2024, after superannuation of Mr. Ramesh Iyer, Vice-Chairman and Managing Director of the Company effective cLose of business hours of 29^th ApriL 2024.

¦    Appointment of Mr. Vijay Kumar Sharma (DIN: 02449088) as an Independent Director

Pursuant to the recommendation of the NRC and basis approvaL of the Board of Directors of the Company, the members of the Company have at the AnnuaL GeneraL Meeting heLd on 23^rd JuLy 2024, approved appointment of Mr. Vijay Kumar Sharma (DIN: 02449088) as an Independent Director for a term of 5 consecutive years with effect from 15^th May 2024 to 14^th May 2029 (both days incLusive), not LiabLe to retire by rotation.

Cessation of Directors

¦    Upon attaining superannuation, Mr. Ramesh Iyer (DIN: 00220759) ceased to be the Vice-Chairman & Managing Director of your Company effective cLose of business hours of 29^th ApriL 2024.

¦    Mr. Dhananjay MungaLe, (DIN: 00007563) and Mrs. Rama Bijapurkar (DIN: 00001835) ceased to be Independent Director(s) of your Company effective cLose of business hours of 23^rd JuLy

2024,    upon compLetion of their second term of 5 consecutive years each as Independent Director(s) of the Company.

¦    Mr. Chandrashekhar Bhave (DIN: 00059856) ceased to be the Independent Director of your Company effective cLose of business hours of 2^nd February

2025,    upon compLetion of his second term of 5 consecutive years each as an Independent Director of the Company.

The Board of Directors pLaces on record its deepest appreciation for the exempLary contribution, strategic foresight, innovative thinking, and steadfast commitment to exceLLence of Mr. Ramesh Iyer, which

propeLLed Mahindra Finance to great heights. The Board is confident that the Company wiLL continue its growth trajectory under the abLe Leadership of Mr. RauL RebeLLo, Managing Director & CEO.

The Board aLso pLaces on record its sincere appreciation to the vaLuabLe contribution made by Mr. Dhananjay MungaLe, Mrs. Rama Bijapurkar and Mr. Chandrashekhar Bhave during their association as Independent Directors.

During the year under review, no Independent Director of your Company resigned from the Company.

Retirement by Rotation

In terms of provisions of Section 152 of the Companies Act, 2013, Mr. Ashwani Ghai (DIN: 09733798), NonExecutive Non-Independent Director is LiabLe to retire by rotation and, being eLigibLe, has offered himseLf for re-appointment at the 35^th AnnuaL GeneraL Meeting of the Company scheduLed to be heLd on 22^nd JuLy 2025.

Re-appointment of Independent Directors

The first term of Dr. Rebecca Nugent (DIN: 09033085) as an Independent Director of the Company wiLL expire on 4^th March 2026. She is eLigibLe and has consented for re-appointment as an Independent Director for a second term of 5 consecutive years. Dr. Nugent has undertaken the onLine proficiency seLf-assessment test.

Basis the performance evaLuation report, skiLL sets, experience and substantiaL contribution made by Dr. Nugent during her 1^st term, the Board is of the opinion that Dr. Nugent hoLds high standards of integrity, expertise and experience (incLuding the proficiency). Basis recommendation of NRC, the Board of Directors have subject to approvaL of the members of the Company re-appointed Dr. Rebecca Nugent (DIN: 09033085), as an Independent Director of the Company for a second term of 5 consecutive years, w.e.f. 5^th March 2026 to 4^th March 2031 (both days incLusive), not LiabLe to retire by rotation. The necessary resoLution seeking approvaL of the members of the Company has been incorporated in the Notice of the 35^th AnnuaL GeneraL Meeting.

Fit and Proper and Non-Disqualification declaration by Directors

ALL the Directors of the Company have provided annuaL confirmation that they satisfy the "fit and proper" criteria as prescribed under Chapter XI of RBI Master Direction No. RBI/DoR/2023-24/106 DoR. FIN.REC. No.45/03.10.119/2023-24 dated 19^th October 2023, as amended, and that they are not disquaLified from being appointed/continuing as Directors in terms of Section 164 (1) and (2) of the Companies Act, 2013.

Declaration by Independent Directors

ALL the Independent Directors of your Company have given their declarations and confirmation that they fulfil the criteria of Independence as prescribed under Section 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their abiLity to discharge their duties with an objective independent judgment and without any external influence.

Further, the Board after taking these declarations/ disclosures on record and acknowledging the veracity of the same, concluded that the Independent Directors hold highest standards of integrity and possess the relevant proficiency, expertise and experience to quaLify and continue as Independent Directors of the Company and are Independent of the Management of the Company.

In terms of Section 150 of the Companies Act, 2013 read with RuLe 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by Indian Institute of Corporate Affairs, Manesar ('IICA') and the said registration is renewed and active as on the date of this report. Further, the said registration wiLL be renewed, before expiry as appLicabLe, and kept active by the Independent Directors.

The Independent Directors of the Company are either exempted from the requirement to undertake the onLine proficiency seLf-assessment test conducted by IICA or have cLeared the onLine proficiency seLf-assessment test as appLicabLe.

Key Managerial Personnel

The foLLowing persons were designated as the Key ManageriaL PersonneL ("KMP”) of your 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, as on 31^st March 2025:

1.    Mr. RauL RebeLLo, Managing Director & CEO

2.    Mr. Pradeep Kumar AgrawaL, Chief FinanciaL Officer

3.    Ms. BrijbaLa BatwaL, Company Secretary

Changes in Key Managerial Personnel

¦ Mr. Ramesh Iyer ceased to be the Vice-Chairman & Managing Director of your Company on attaining superannuation with effect from cLose of business hours of 29^th ApriL 2024.

 

Laws and that such systems were adequate and operating effectiveLy during the financiaL year ended 31^st March 2025;

Performance Evaluation of the Board

The Companies Act, 2013 ("Act”) and the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations”) stipuLate the evaLuation of the performance of the Board, its Committees, IndividuaL Directors and the Chairperson.

Your Company has formuLated a process for performance evaLuation of the Independent Directors,

 

¦    Mr. RauL RebeLLo ceased to be the Executive Director and MD & CEO Designate with effect from 29^th ApriL 2024 and assumed the office of Managing Director & CEO with effect from 30^th ApriL 2024.

¦    Mr. Vivek Karve resigned from the office of Chief FinanciaL Officer and Key ManageriaL PersonneL ("KMP”) of the Company with effect from cLose of business hours of 31^st October 2024 to pursue personaL, sociaL and professionaL interest beyond fuLL time empLoyment.

¦    In compLiance with ReguLation 26A(2) of the Listing ReguLations, Mr. Animesh Chatterjee was appointed as the Chief FinanciaL and KMP, for interim period i.e. from 29^th January 2025 tiLL 4^th March 2025.

¦    Mr. Pradeep Kumar AgrawaL was appointed as the Chief FinanciaL Officer of the Company effective 5^th March 2025.

Directors' Responsibility Statement

Pursuant to the provisions of Section 134(5) of the

Companies Act, 2013, ("the Act”) your Directors, based

on the representations received from the Operating

Management and after due enquiry, confirm that:

i.    In the preparation of the annuaL accounts for financiaL year ended 31^st March 2025, the appLicabLe accounting standards have been foLLowed and there are no materiaL departures in adoption of these standards;

ii.    They had in consultation with the Statutory Auditors seLected such accounting poLicies and appLied them consistentLy and made judgments and estimates that are reasonabLe and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March 2025 and of the profit of the Company for the year;

iii.    They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irreguLarities;

iv.    They have prepared the annuaL accounts for financiaL year ended 31^st March 2025 on a going concern basis;

v.    They have Laid down adequate internaL financiaL controLs to be foLLowed by the Company and that such internaL financiaL controLs were operating effectiveLy during the financiaL year ended 31^st March 2025;

vi.    They have devised proper systems to ensure compLiance with provisions of aLL appLicabLe

the Board, its Committees and other IndividuaL Directors which incLudes criteria for performance evaLuation of the Non-Executive Directors and Executive Directors.

An annuaL performance evaLuation exercise was carried out in compLiance with the appLicabLe provisions of the Act, Listing ReguLations, the Company's Code of Independent Directors and the criteria and methodoLogy of performance evaLuation approved by the Nomination and Remuneration Committee ("NRC") comprising of Mr. Diwakar Gupta as the Chairperson and Dr. Anish Shah, Mr. MiLind Sarwate and Mr. Vijay Kumar Sharma as its members:

The questionnaires for performance evaluation are comprehensive and in alignment with the guidance note on Board evaluation issued by the SEBI, vide its circular no. SEBI/HO/CFD/CMD/CIR/P/2017/004 dated 5^th January 2017 as amended and merged with SEBI Master Circular dated November 11, 2024 and are in line with the criteria and methodology of performance evaluation approved by the NRC.

Outcome and results of the performance evaluation

All the Directors of your Company as on 31^st March 2025 participated in the evaluation process. The Directors expressed their satisfaction with the Evaluation process. During the year under review, NRC ascertained and reconfirmed that the deployment of "questionnaire” as a methodology, is effective for evaluation of performance of Board and Committees and Individual Directors.

The evaluation outcomes for the year under review were deliberated upon at length with the Board members, Committee Chairpersons and Individual Directors. The results underscore a good level of engagement and diligence by the Board and its various committees, and by the senior leadership.

It was noted that the Board and Committee meetings are meticulously planned and conducted with efficiency, in terms of comprehensive pre-reads being sent well in advance, and constructive participation and deliberations at the meeting led by the Chair. This enabled the Board and Committees to discharge their role effectively and focus on governance and internal controls.

During the year under review, the terms of reference of the Board and Committees were revisited with a view to aligning the same with regulatory expectations, and best group and industry practices, so as to bring renewed focus on review matters.

Board members were appreciative that during the year under review, the Board and its Committees performed their role well, particularly in the areas of financial discipline, strategic direction, compliances, succession planning and performance review. Based on the outcome of the evaluation of the year under review, the Board has agreed to deepen its focus on ESG, risk management and oversight of subsidiaries, with continued focus on maintaining high standards of performance and governance, to enhance the value for all its stakeholders.

Familiarisation Programme for Directors

Your Company has adopted a structured programme for orientation of all Directors including the Independent Directors so as to familiarise them with the Company-its operations, business, industry, environment in which it

functions, Indian and global macro-economic front and the regulatory regime applicable to it. The Management updates the Board Members on a continuing basis of any significant changes therein and provides them an insight to their expected roles and responsibilities so as to be in a position to take well-informed and timely decisions and contribute significantly to the Company. The Directors are provided with all the documents to enable them to have a better understanding of the Company, its operations and the industry in which it operates.

The Independent Directors of your 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. The terms of reference of all the Committees with updations, if any, are shared with all the Board Members on a quarterly basis. Independent Directors meet the business and functional heads and provide their inputs and suggestions on strategic and operational matters at the quarterly Board/Committee Meetings.

Managing Director and Senior Management provide an overview of the operations and familiarise the Directors on matters related to the Company's values and commitments. They are also introduced to the organisation structure, constitution of various committees, board procedures, risk management strategies etc.

Strategic Presentations are made to the Board where Directors get an opportunity to interact with Senior Management. Directors are also informed of the various developments in the Company through Press Releases, emails, etc. Your Company has a secured Board portal which inter-alia provides a one stop and seamless solution for access to Board/Committee materials to all the Directors. The Board portal also contains Annual Report, Code of Conduct for Directors, terms of appointment, committee charters etc. for ease of access. This enables greater transparency to the Board processes.

Pursuant to the provisions of the Companies Act, 2013 and Regulation 25(7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations”), your Company has during the year conducted familiarization programmes through briefings at Board/ Committee meetings for all its Directors including Independent Directors.

Details of familiarization programs imparted to the Independent Directors during the financial year under review in accordance with the requirements of the Listing Regulations are available on the Company's website and can be accessed at the web-link: https://

www.mahindrafinance.com/investor-relations/policy-and-shareholder-information#familiari7ation-program and is also provided in the Corporate Governance Report forming part of this Annual Report.

Policies on Appointment of Directors and Senior Management and Remuneration of Directors, Key Managerial Personnel and Employees:

i)    Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management

In accordance with the provisions of Section 134(3)(e) of the Companies Act, 2013 ("the Act”) read with Section 178 of the Act and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations”), your Company has adopted a Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management, which, inter-alia, includes the criteria for determining qualifications, positive attributes and independence of Directors, succession planning for Directors and Senior Management, and the Talent Management framework of the Company.

During the year under review, the Policy was amended to, inter-alia align with the amendments in the Listing Regulations.

The said policy is available on the website of the Company and can be accessed at https://www. mahindrafinance.com/investor-relations/policy-and-shareholder-information#mmfsl-policies .

ii)    Policy on Remuneration of Directors and Remuneration Policy for Key Managerial Personnel, Senior Management and other Employees of the Company

Your Company has also adopted the Policy on Remuneration of Directors and the Policy on Remuneration of Key Managerial Personnel, Senior Management and other Employees of the Company in accordance with the provisions of sub-section (4) of Section 178 of the Act, Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 and Listing Regulations.

During the year under review the Policy on Remuneration of Directors of the Company was amended to, inter-alia, align with existing legal provisions, introduce certain standard clauses for better articulation.

The Remuneration Policy for Key Managerial Personnel, Senior Management and other employees was amended during the year under review to inter-alia, align with the amendments in the Listing Regulations, and provide flexibility in compensation structuring.

The said Policies are uploaded on the website of the Company and can be accessed at: https://www. mahindrafinance.com/investor-relations/policy-and-shareholder-information#mmfsl-policies

Adequacy of Internal Financial Controls with Reference to the Financial Statements

Your Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations.

Your Company uses various industry standard systems to enable, empower and engender businesses and also to maintain its Books of Accounts. The transactional controls built into these systems ensure appropriate segregation of duties, the appropriate level of approval mechanisms and maintenance of supporting records. The systems, Standard Operating Procedures and controls are reviewed by the Management.

Your Company's Internal Financial Controls are deployed through Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organisations of the Treadway Commission ("COSO”), that addresses material risks in your Company's operations and financial reporting objectives. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting ("ICFR”) issued by The Institute of Chartered Accountants of India. The risk control matrices are reviewed on a quarterly basis and control measures are tested and documented on a quarterly basis. The Company has IT systems in place making the ICFR process completely digital and strengthening the review and monitoring mechanism. Based on the assessments carried out by the Management during the year, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.

Your Company recognises that Internal Financial Controls cannot provide absolute assurance of achieving financial, operational and compliance reporting objectives because of its inherent limitations. Also, projections of any evaluation of the Internal Financial Controls to future periods are subject to the risk that the Internal Financial Control may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures

may deteriorate. Accordingly reguLar audits and review processes ensure that such systems are reinforced on an ongoing basis.

Joint Statutory Auditor's certification on internal financial controls

The Joint Statutory Auditors of your Company viz. M/s. M M Nissim & Co LLP, Chartered Accountants and M/s. M.P. ChitaLe & Co., Chartered Accountants have examined the internal financial controls of the Company and have submitted an unmodified opinion on the adequacy and operating effectiveness of the internal financial controls over financial reporting as at 31^st March 2025.

Internal Audit Framework

Your Company has in place an adequate internal audit framework to monitor the efficacy of the internal controls with the objective of providing to the Audit Committee and the Board of Directors, an independent, objective and reasonabLe assurance on the adequacy and effectiveness of the Company's processes. The internal audit approach verifies compliance with the operational and system related procedures and controls. The Internal Auditor reports to the Audit Committee of the Board.

Separate meetings between the Head of Internal Audit and the Audit Committee

Separate meetings between the Head of Internal Audit and the Audit Committee, without the presence of Management, were enabled to facilitate free and frank discussion amongst them. The meetings were held on 23^rd April 2024, 24^th September 2024 and 22^nd October 2024.

Risk Based Internal Audit ("RBIA") framework

In compliance with RBI circular dated 3^rd February 2021, the Company has in place an effective Risk Based Internal Audit ("RBIA”) Framework to review the efficacy of internaL controLs, processes, poLicies and compliance with Laws and regulations, with the objective of providing an independent and reasonabLe assurance on the adequacy and effectiveness of the organisation's internaL controL and governance processes. The framework is commensurate with the nature of the business, size, scaLe and compLexity of its operations.

The Audit Committee has approved a Risk Based InternaL Audit ("RBIA”) framework, aLong with appropriate processes and pLans for internaL audit of FY2025 and FY2026. The Risk Based InternaL Audit PLan is aLso being reviewed by the Statutory Auditors, Senior Leadership, Chief Risk Officer, Chief CompLiance Officer before being approved by the Audit Committee. The internaL audit pLan is deveLoped based on the risk profiLe of the

audit universe incLuding business activities, functions, branches, appLication systems of the organisation. The RBIA pLan incLudes process audits, branch audits and Information TechnoLogy (IT) & Information Security (IS) audits. InternaL audits are undertaken on a periodic basis to independentLy vaLidate the existing controLs.

Based on the reports of internaL audit, function/process owners undertake corrective action in their respective areas. Significant audit observations are presented to the Audit Committee aLong with agreed management action pLan. The status of the management actions and impLementation of the recommendations are tracked for aLL the observations and are presented to the Audit Committee on a reguLar basis.

Risk Management

Risk management forms an integraL part of the Company's business. Your Company has a comprehensive Risk Management PoLicy in pLace and has Laid down a weLL-defined risk management framework to identify, assess and monitor risks and strengthen controLs to mitigate risks. Your Company has estabLished procedures to periodicaLLy pLace before the Risk Management Committee and the Board of Directors, the risk assessment and minimisation procedures being foLLowed by the Company and steps taken by it to mitigate these risks.

The Risk Management PoLicy, inter-aLia, incLudes identification of eLements of Credit, OperationaL & Enterprise risk, incLuding Cyber Security and reLated risks as weLL as those risks which in the opinion of the Board may threaten the existence of the Company.

The Risk Management Committee ("RMC”) constituted by the Board manages the integrated risk and reviews periodicaLLy the Risk Management PoLicy and strategy foLLowed by the Company.

The 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. Your Company has a robust organisationaL structure for managing and reporting on risks. This risk management mechanism works at aLL the LeveLs, which acts as the strategic defence cover of the Company's risk management and is supported by reguLar review, controL, seLf-assessments and monitoring of key risk indicators.

Operational Risk Management: Your Company has impLemented an OperationaL Risk Management (ORM) PoLicy to proactiveLy manage operationaL risks. The poLicy has impLemented invoLves assessing and measuring risks, monitoring them cLoseLy, and impLementing

mitigating measures through a structured governance framework. ALL new products, processes, and changes as weLL as new financiaL outsourcing arrangements undergo thorough risk evaLuation by the OperationaL Risk team. In terms of the Latest ReguLatory guidance note on OperationaL Risk Management and OperationaL ResiLience, your Company is in compLiance with aLL the appLicabLe key themes specified.

Credit Risk Management: Your Company has successfuLLy impLemented a robust credit risk management framework, risk assessment modeLs to ensure proactive identification, mitigation, and monitoring of potentiaL credit exposures. This strategic approach enhances Company's abiLity to manage risk whiLe optimizing overaLL portfoLio performance.

In compLiance with Master Direction - Reserve Bank of India (Non-Banking FinanciaL Company - ScaLe Based ReguLation) Directions, 2023, the Company has in pLace ICAAP PoLicy and Framework with the objective of ensuring avaiLabiLity of adequate capitaL to support aLL risks in business as aLso enabLe effective risk management system in the Company.

The Chief Risk Officer ("CRO”) oversees and strengthens the risk management function of the Company. The CRO is invited to the Board, Audit Committee, Asset LiabiLity Committee and Risk Management Committee Meetings. The CRO aLong with members of the Senior Management apprises the Risk Management Committee and the Board on the risk assessment, process of identifying and evaLuating risks, major risks as weLL as the movement within the risk grades, the root cause of risks and their impact, key performance indicators, risk management measures and the steps taken to mitigate these risks.

Auditors and Audit ReportsJoint Statutory Auditors and their Reports

Basis the recommendation of the Audit Committee and the Board of Directors, the members of the Company had at the 34^th AnnuaL GeneraL Meeting heLd on 23^rd JuLy 2024, approved appointment of M/s. M M Nissim & Co LLP, Chartered Accountants (ICAI Firm Registration Number: 107122W/W100672) and M/s. M.P. ChitaLe & Co., Chartered Accountants (ICAI Firm Registration Number: 101851W) as the Joint Statutory Auditors of your Company for a term of 3 consecutive years to hoLd office from concLusion of 34^th AGM up to the concLusion of 37^th AGM to be heLd in the year 2027. The Joint Statutory Auditors hoLd vaLid peer review certificate as prescribed under the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations”).

The joint Statutory Auditors have given a confirmation on their eLigibiLity and non-disquaLification.

The joint Statutory Auditors of the Company have issued unmodified Audit Reports on the StandaLone and ConsoLidated FinanciaL Statements for the financiaL year ended 31^st March 2025. The report does not contain any quaLification, reservation or adverse remark or discLaimer.

Adoption of Policy for appointment of Statutory Auditors

In compLiance with the Reserve Bank of India GuideLines dated 27^th ApriL 2021 ("RBI GuideLines”), your Company has in pLace a PoLicy for appointment of Statutory Auditors of the Company. The said PoLicy was amended by the Board of Directors to specificaLLy cover independence of auditors and annuaL review of performance of statutory auditors in compLiance with the RBI GuideLines.

Secretarial Auditor and Audit Report

M/s. KSR & Co, Company Secretaries LLP ("KSR”), the SecretariaL Auditor appointed in accordance with the provisions of Section 204 of the Companies Act, 2013 ("Act”) read with the RuLes framed thereunder. KSR has issued the SecretariaL Audit Report for FY2025 which is appended to this Report as "Annexure II". The SecretariaL Audit Report does not contain any quaLification, reservation or adverse remark or discLaimer. KSR was present at the Last AGM of the Company heLd on 23^rd JuLy 2024.

Appointment of Secretarial Auditor

In compLiance with ReguLation 24(A) of Listing ReguLations as amended vide SEBI notification dated 12^th December 2024 and basis the recommendation of Audit Committee, the Board has approved the appointment of M/s. Makarand M. Joshi & Co. Company Secretaries ("MMJC"), as the SecretariaL Auditor of the Company for first term of 5 consecutive years, to conduct Secretarial Audit and provide other allied certification/permitted services for FY2025-2026 up to FY2029- 2030, subject to approvaL of sharehoLders of the Company at the ensuing AGM.

Consequent to the above, M/s. KSR and Co, Company Secretaries LLP ("KSR”), the current SecretariaL Auditor, has ceased to be the SecretariaL Auditor of the Company from 22^nd ApriL 2025.

MMJC have consented for their appointment as the SecretariaL Auditor and have given a confirmation to the effect that they are eLigibLe to be appointed and are not disquaLified from acting as the SecretariaL Auditor.

Members are requested to consider and approve appointment of MMJC as the SecretariaL Auditor of your Company to conduct SecretariaL Audit and provide other aLLied certification/permitted services for FY 2025-2026 up to FY 2029-2030. Necessary

Particulars of Contracts or Arrangements with Related Parties

Your Company has in pLace a robust process for approvaL of ReLated Party Transactions and on DeaLing with ReLated Parties.

ALL contracts/arrangements/transactions entered into by the Company during the FinanciaL Year with reLated parties were in the ordinary course of business and on an arm's Length basis.

Omnibus approvaL of Audit Committee is obtained for ReLated Party Transactions which are of repetitive nature, which are reviewed on quarterLy basis by the Audit Committee as per ReguLation 23 of the Listing ReguLations and Section 177 of the Companies Act, 2013.

ALL ReLated Party Transactions and subsequent materiaL modifications, if any, were pLaced before the Audit Committee for review and approvaL. Necessary detaiLs for each of the ReLated Party Transactions as appLicabLe aLong with the justification are provided to the Audit Committee in terms of the Company's PoLicy on MateriaLity of and DeaLing with ReLated Party Transactions and as required under SEBI Master CircuLar SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024.

The MateriaL ReLated Party Transactions approved by the Members of the Company are aLso reviewed / monitored on quarterLy basis by the Audit Committee of the Company as per ReguLation 23 of the Listing ReguLations and Section 177 of the Companies Act, 2013.

The Company has not entered into MateriaL ReLated Party Transactions as per the provisions of the Companies Act, 2013 and a confirmation to this effect as required under Section 134(3)(h) of the Companies Act 2013 is given in form AOC-2 as "Annexure III", which forms part of this AnnuaL Report.

In accordance with the appLicabLe provisions of the Master Direction issued by the Reserve Bank of India and the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations”), the 'PoLicy on MateriaLity of and DeaLing with ReLated Party Transactions', is avaiLabLe on the Company's website: https://www.mahindrafinance.com/investor-reLations/ poLicy-and-sharehoLder-information#mmfsL-poLicies .

The transactions of the Company with any person/ entity beLonging to the promoter/promoter group which hoLds 10% or more sharehoLding in the Company as required pursuant to Para A of ScheduLe V of the Listing ReguLations is discLosed separateLy in the financiaL statements of the Company. Members of the Company had approved entering into MateriaL ReLated Party transaction with Mahindra & Mahindra Limited, (Promoter/ HoLding Company and a ReLated party) under ReguLation 23 of the Listing ReguLations. During

 

resolution seeking approval, of members for appointment of MMJC as the Secretarial Auditor has been incorporated in the Notice of 35^th Annual. General. Meeting.

Secretarial Audit of Material Subsidiary

There is no Material. UnListed Indian Subsidiary of the Company as on 31^st March 2025 and the requirement under Regulation 24(A) of the Listing Regulations regarding the Secretarial Audit of MateriaL UnListed Indian Subsidiary is not appLicabLe to the Company for the FinanciaL Year 2024-25.

Annual Secretarial Compliance Report with additional confirmations on compliances

In compLiance with ReguLation 24(A) of Listing ReguLations, your Company has undertaken an audit for FY2025 for aLL the appLicabLe compLiances as per Listing ReguLations, 2015 and CircuLars/ GuideLines issued thereunder.

The AnnuaL SecretariaL CompLiance Report ("ASCR”) issued by M/s. KSR & Co, Company Secretaries LLP, SecretariaL Auditor and a Peer Reviewed Firm, with confirmations with confirmations on compLiances by the Company with respect to Insider Trading ReguLations, ReLated Party Transactions, updation of PoLicies, discLosure of materiaL events to Stock Exchanges etc., has been fiLed with BSE and NSE in the prescribed format and the same can be accessed on the website of the Company at https://www.mahindrafinance. com/investor-reLations/reguLatory-fiLings#secretariaL-compHance-report

The Annual Secretarial Compliance Report does not contain any qualification, reservation or adverse remark.

Cost Records and Cost Audit

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148 of the Companies Act, 2013 are not appLicabLe in respect of the business activities carried out by your Company and hence such accounts and records were not required to be maintained by the Company.

Fraud Reporting

During the year under review, the Joint Statutory Auditors and the SecretariaL Auditor have not reported any instance of fraud committed in the Company by its officers or empLoyees, invoLving an amount of Less than ' 1 crore to the Audit Committee under section 143(12) of the Companies Act, 2013, the detaiLs of which need to be mentioned in this Report.

The Company is reinforcing its commitment to trust, integrity and transparency through enhanced measures for compLiance, risk management, and governance.

the year under review, the aggregate vaLue of the transactions entered with Mahindra & Mahindra Limited did not exceed the materiaLity threshoLd as prescribed under ReguLation 23 of the Listing ReguLations. The Company intends to enter into new MateriaL ReLated Party Transaction with Life Insurance Corporation of India for which the approvaL of Members is being sought. Further detaiLs on the transactions with reLated parties are provided in the accompanying financiaL statements.

Whistle Blower Policy/ Vigil Mechanism

Your Company promotes ethicaL behaviour in aLL its business activities and has estabLished a vigiL mechanism for its Directors, EmpLoyees, and StakehoLders associated with the Company to report their genuine concerns. The VigiL Mechanism as envisaged in the Companies Act, 2013 and the RuLes prescribed thereunder and the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 is impLemented through the WhistLe BLower PoLicy, to provide for adequate safeguards against victimization of persons who use such mechanism and make provision for direct access to the Chairperson of the Audit Committee.

As per the WhistLe BLower PoLicy impLemented by the Company, the EmpLoyees, Directors or any StakehoLders associated with the Company are free to report iLLegaL or unethicaL behaviour, actuaL or suspected fraud, or vioLation of the Company's Code(s) of Conduct or Corporate Governance PoLicies or any improper activity, through the channeLs provided beLow.

The WhistLe BLower PoLicy provides for protected discLosure and protection for the WhistLe BLower. Under the WhistLe BLower PoLicy, the confidentiaLity of those reporting vioLation(s) is protected and they are not subject to any discriminatory practices. The WhistLebLower can make a Protected DiscLosure by using any of the foLLowing channeLs for reporting:

1.    Independent third party Ethics HeLpLine Service PortaL: https://ethics.mahindra.com

2.    ToLL free No: 000 800 100 4175

3.    Chairperson of the Audit Committee

The WhistLe BLower PoLicy has been wideLy disseminated within the Company. The PoLicy is avaiLabLe on the website of the Company at the web-Link https://www. mahindrafinance.com/investor-reLations/poLicy-and-shareholder-information#mmfsl-polic.ies .

During the year, the Company received 9 whistLe bLower compLaints. ALL the cases were investigated and appropriate actions were taken, wherever necessary basis investigation reports.

The Audit Committee is apprised of the vigiL mechanism on a periodic basis. During the year, no person was denied access to the Chairperson of the Audit Committee. A

quarterLy report on the whistLe bLower compLaints is pLaced before the Audit Committee for its review.

Particulars of Employees and Related Disclosures

DetaiLs of empLoyees who were in receipt of remuneration of not Less than ' 1,02,00,000 during the year ended 31^st March 2025 or not less than ' 8,50,000 per month during any part of the year, as required under provisions of Section 197(12) of the Companies Act, 2013 read with RuLe 5(2) and 5(3) of Companies (Appointment and Remuneration of ManageriaL PersonneL) RuLes, 2014 wiLL be made avaiLabLe during 21 days before the AnnuaL GeneraL Meeting in eLectronic mode to any SharehoLder upon request sent at the EmaiL ID: companv.secretarv@ mahindrafinance.com.

DiscLosures with respect to the remuneration of Directors, Key ManageriaL PersonneL and EmpLoyees as required under Section 197(12) of the Companies Act, 2013 and RuLe 5(1) of Companies (Appointment and Remuneration of ManageriaL PersonneL) RuLes, 2014, is given in "Annexure IV"

Disclosure in respect of remuneration/ commission drawn by the Managing Director/ Whole-time Director from Holding or Subsidiary Company

Mr. Ramesh Iyer former Vice-Chairman & Managing Director (up to 29^th ApriL 2024) did not receive any remuneration or commission from HoLding/Subsidiaries of the Company during FY2025.

Mr. RauL RebeLLo, Managing Director & CEO effective 30^th ApriL 2024 (Mr. RauL RebeLLo served as Executive Director and MD & CEO Designate up to 29^th ApriL 2024) did not receive any remuneration or commission from HoLding/ Subsidiaries of the Company during FY2025.

Disclosure Under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act")

Your Company is an equaL opportunity empLoyer and is committed to ensuring that the work environment at aLL its Locations is conducive to fair, safe and harmonious reLations between empLoyees. It strongLy beLieves in uphoLding the dignity of aLL its empLoyees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictLy prohibited.

Your Company has in pLace a comprehensive PoLicy in accordance with the provisions of POSH Act and RuLes made thereunder.

ALL empLoyees (permanent, contractuaL, temporary and trainees) are covered under this PoLicy. The PoLicy has been wideLy communicated internaLLy and is pLaced on

the Company's intranet portal The Company has zero tolerance towards sexuaL harassment.

The POSH Policy is available on the website of the Company and can be accessed at the web-link: https:// www.mahindrafinance.com/investor-reLations/poLicy-and-sharehoLder-information#mmfsL-poLicies.

Your Company has complied with the provisions relating to the constitution of the Internal Complaints Committee ("ICC”) under the POSH Act to redress complaints received regarding sexuaL harassment.

To ensure that aLL the empLoyees are sensitized regarding issues of sexuaL harassment, the Company creates awareness by imparting necessary trainings.

The foLLowing is a summary of SexuaL Harassment compLaint(s) received and disposed of during the FY2025, pursuant to the POSH Act and RuLes framed thereunder:

a)    Number of compLaint(s) of SexuaL Harassment received during FY2025 - 3

b)    Number of compLaint(s) disposed of during FY2025 - 3

c)    Number of cases pending for more than 90 days (which is stipuLated timeLine for compLetion of an inquiry into a compLiant of sexuaL harassment under POSH Act) - NiL

d)    Number of cases pending as on 31^st March 2025 - NiL

Number of workshops/awareness programs on the subject carried out during the year under review were as under:

¦    An onLine e-Learning moduLe for empLoyees on Prevention of SexuaL Harassment covering topics on SexuaL Harassment, the process of fiLing compLaints, deaLing with sexuaL harassment, etc. is deveLoped for training. 99.5% of the empLoyees have compLeted this training.

¦    One Training program on ICC was conducted for aLL ICC members.

¦    One Training program on POSH sensitization was conducted for the HR team.

Disclosure of Maternity Benefit Compliance

Your Company is in compLiance of Maternity Benefit Act, 1961 for the year under review.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information in respect of conservation of energy, technoLogy absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with RuLe 8(3) of the Companies (Accounts) RuLes, 2014 is attached as 'Annexure V’ to the Board's Report.

Policies

The detaiLs of the Key PoLicies adopted by your Company and changes made therein, if any, during the year under review are mentioned at "Annexure VI" to the Board's Report.

Compliance with the Provisions of Secretarial Standard - 1 and Secretarial Standard - 2

The Directors have devised proper systems to ensure compLiance with the provisions of the SecretariaL Standards, i.e., SS-1 and SS-2, reLating to 'Meetings of the Board of Directors' and 'GeneraL Meetings', respectiveLy, issued by the Institute of Company Secretaries of India ("ICSI”) and such systems are adequate and operating effectiveLy

Voluntary adherence of Secretarial Standards to all Board Committees

Although, SS-1 compLiance is required onLy for Board and its Committees mandatoriLy required to be constituted under the Companies Act, 2013 ("the Act”), the Company adheres and compLies with most of the good practices enunciated in the said SecretariaL Standards for aLL its mandatory and non-mandatory Board LeveL Committees.

Your Company has duLy compLied with appLicabLe SS-1 and SS-2, during the year under review.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operations in future.

There were no significant and materiaL orders passed by the reguLators or courts or tribunaLs during the year impacting the going concern status of the Company and its future operations.

Disclosure pertaining to Insolvency & Bankruptcy Code

There were neither any appLications fiLed by or against the Company nor any proceedings were pending under the InsoLvency and Bankruptcy Code, 2016 ("IBC”) during the year under review.

Disclosure on One-Time Settlement

During the year, the Company has not made any onetime settLement for Loans taken from the Banks or FinanciaL Institutions and hence the detaiLs of difference between amount of the vaLuation done at the time of one-time settLement and the vaLuation done whiLe taking Loan from the Banks or FinanciaL Institutions aLong with the reasons thereof is not appLicabLe.

General Disclosures

The Directors further state that no discLosure or reporting is required in respect of the foLLowing items, as there were no transactions/events reLated to these items during the financiaL year under review:

¦    There was no issue of equity shares with differentiaL rights as to dividend, voting or otherwise;

¦    There was no issue of shares (incLuding sweat equity shares) to the empLoyees of the Company under any scheme, save and except EmpLoyee Stock Option schemes referred to in this Report;

¦    During the year under review, Board of Directors at its meeting heLd on 13^th February 2025 had approved raising of funds by way issue of equity shares on rights basis to the eLigibLe sharehoLders for an amount not exceeding ' 3000 Crore, subject to receipt of reguLatory/ necessary approvaLs, as may be required.

¦    There was no buy-back of the equity shares during the year under review;

¦    There were no voting rights which are not directLy exercised by the empLoyees in respect of equity shares for the subscription/ purchase for which Loan was given by the Company (as there is no scheme pursuant to which such persons can beneficiaLLy hoLd

shares as envisaged under Section 67(3)(c) of the Companies Act, 2013 ("the Act");

¦    There was no suspension of trading of securities of the Company on account of corporate action or otherwise;

¦    There was no revision made in FinanciaL Statements or the Board's Report of the Company;

¦    The Company being an NBFC, the provisions reLating to Chapter V of the Act, i.e., acceptance of deposit, are not appLicabLe. DiscLosures as per NBFC reguLations have been made in this AnnuaL Report.

Acknowledgments

The Board conveys its deep gratitude and appreciation to aLL the empLoyees of the Company for their tremendous efforts as weLL as their exempLary dedication and contribution to the Company's performance.

The Directors wouLd aLso Like to thank its sharehoLders, customers, vendors, business partners, bankers, government and aLL other business associates for their continued support to the Company and the Management.

---

Mar 31, 2025

Your Directors are pLeased to present their Thirty-Fifth Report together with the audited financial, statements of your Company for the FinanciaL Year ended 31^st March 2025 ("FY2025”).

Financial Summary and Operational Highlights

 

(' in crore)
Particulars	Consolidated		%	Standalone		%
	FY2025	FY2024	Change	FY2025	FY2024	Change
Total Income	18,530.46	15,970.32	16.03	16,074.69	13,562.42	18.52
Less: Finance Costs	8,415.43	6,959.20	Â	7,898.30	6,426.94	Â
Expenditure	6,832.14	6,204.20	Â	4,755.70	4,551.30	Â
Depreciation, Amortization and Impairment	321.21	274.85	Â	273.42	228.71	Â
Total Expenses	15,568.78	13,438.25	15.85	12.927.42	11,206.95	15.35
Profit before exceptional items and taxes	2,961.68	2,532.07	Â	3,147.27	2,355.47	Â
Share of profit of Associates & Joint Ventures	65.23	56.11	Â	-	Â	-
ExceptionaL items	-	-	-	-	-	-
Profit Before Tax	3,026.91	2,588.18	16.95	3,147.27	2,355.47	33.62
Less: Provision For Tax	Â			Â
Current Tax	820.93	716.10	Â	779.45	664.93	Â
Deferred Tax	(54.89)	(70.97)	Â	22.78	(69.08)	Â
Profit After Tax	2,260.87	1,943.05	16.36	2,345.04	1,759.62	33.27
Less: Profit for the year attributabLe to NoncontroLLing interests	(1)	10.36	Â	-	Â	-
Profit attributable to owners of the Company	2,261.87	1,932.69	17.03	2,345.04	1,759.62	33.27
BaLance of profit brought forward from earLier years	8,364.29	7,417.35	Â	7037.93	6,376.60	Â
Add: Other Comprehensive income /(Loss)	(5.71)	(6.71)	Â	(7.49)	(4.97)	Â
BaLance avaiLabLe for appropriation	10,620.45	9,343.33	Â	9,375.48	8,131.25	Â
Less: Appropriations	Â			Â
Dividend paid on Equity Shares	777.78	740.23	Â	778.38	741.32	Â
Transfer to Statutory Reserves	469.13	352.94	Â	469.00	352.00	Â
Add/Less: Other Adjustments:	Â			Â
Changes in Group's Interest	(0.65)	114.13	Â	-
BaLance carried forward to baLance sheet	9,372.89	8,364.29	Â	8,128.10	7,037.93	15.49
Net worth	21,529.46	19,933.25	8.01	19,812.23	18,157.49	9.11

Consolidated Performance Highlights

¦    TotaL Income increased by 16.03% to ' 18,530.46 crore for FY2025 as compared to ' 15,970.32 crore in FY2024.

¦    Profit Before Tax ("PBT") increased by 16.95% to ' 3,026.91 crore for FY2025 as compared to ' 2,588.18 crore in FY2024.

¦    Profit After Tax ("PAT”) (Net of non-controLLing interest) increased by 17.03% to ' 2,261.87 crore for FY2025 as compared to ' 1,932.69 crore in FY2024.

Standalone Performance Highlights

¦    During the year under review, the Company has disbursed Loans of ' 57,899.69 crore as against ' 56,208.22 crore during the previous year, an increase of 3% over the same period in previous year.

¦    TotaL Income increased by 18.52% to ' 16,074.69 crore for the year ended 31^st March 2025 as compared to ' 13,562.42 crore for the previous year.

¦    PBT increased by 33.62% to ' 3,147.27 crore as compared to ' 2,355.47 crore for the previous year.

¦    PAT increased by 33.27% to ' 2,345.04 crore as compared to ' 1,759.62 crore in the previous year.

¦    The Assets Under Management ("AUM”) registered a growth of 17% and stood at ' 1,19,673.02 crore as at 31^st March 2025 as against ' 1,02,596.77 crore as at 31^st March 2024.

The Gross Stage 3 Loan assets stood at ' 4,413.94 crore as on 31^st March 2025 as compared to ' 3,490.90 crore as on 31^st March 2024. The Gross Stage 3 as a percentage to Business Assets increased to 3.7% as on 31^st March 2025 as against 3.4% as on 31^st March 2024.

During the year, the Company's asset quaLity remained within a comfortabLe range, with Gross Stage 3 sLightLy higher at 3.7% of Business assets and as targeted, the Company has been abLe to maintain the aggregate LeveL of Gross Stage 2 + Gross Stage 3 beLow 10% (actuaL at 9.1%) of business assets as on 31^st March 2025. WhiLe the credit cost for the year was at 1.3% underscoring prudent risk management. The Company continued to maintain underwriting discipLine and a proactive approach to restrict earLy-stage deLinquencies.

Material changes from the end of the financial year till the date of this report

No materiaL changes and commitments have occurred after the cLosure of the FinanciaL Year 2024-25 tiLL the date of this Report, which wouLd affect the financiaL position of your Company.

ECL and other updates

The Company estimates impairment on financiaL instruments as per Expected Credit Loss ("ECL”) approach prescribed under Ind AS 109 'FinanciaL Instruments' and in accordance with the Board approved ECL PoLicy.

In estimation of Expected Credit Loss (ECL) provisions, the Company has been using the updated ECL modeL in which muLti-factor macro-economic variabLes and product cLassification of vehicLe Loan portfoLios are buiLt-in and the Company has been updating the ECL modeL with the Latest set of data inputs at reasonabLe periodic intervaLs to capture the expected significant changes in macro-economic growth prospects and shifts in market drivers and changes in risk profiLe of customer credit exposures. During the current financiaL year, as part of annuaL refresh, aLong with updation of Latest macro-economic growth estimates and other reLevant input parameters for computation of ECL provisions for Loan portfoLios, the Company has aLso caLibrated the ECL modeL for SmaLL and Medium Enterprise (SME) portfoLio and Trade advance portfoLio. The Company had estimated the ECL provision for year ended 31^st March 2025 in accordance with the updated ECL modeL. The Company hoLds provision towards expected credit Loss as at 31^st March 2025 aggregating to ' 3,459 crore (as at 31^st March 2024: ' 3,401.59 crore).

The Company's net Stage-3 assets ratio stood at 1.84% as at 31^st March 2025 as against 1.28 % as at 31^st March 2024.

Transfer to Reserves

The Company has transferred an amount of ' 469 crore to the Statutory Reserves, in compLiance with section 45-IC of the Reserve Bank of India ("RBI”) Act, 1934. Further, the Board of your Company has decided not to transfer any amount to the GeneraL Reserve for the year under review. An amount of ' 8,128.10 crore is proposed to be retained in the Profit and Loss Account of the Company.

The Company maintains sufficient Liquidity buffer to fuLfiL its obLigations arising out of issue of debentures. The Company being an NBFC, is exempt from transferring any amount to debenture redemption reserve in respect of privateLy pLaced or pubLic issue of debentures, as per the provisions of section 71 of the Companies Act, 2013 read with RuLe 18 of the Companies (Share CapitaL and Debentures) RuLes, 2014, read with appLicabLe Ministry of Corporate Affairs circuLar. In respect of secured Listed non-convertibLe debt securities, the Company maintains 100% security cover or higher security cover as per the terms of Information Memorandum, GeneraL Information Document ("GID”), Key Information Document ("KID”), as the case may be and/or Debenture Trust Deed, sufficient to discharge the LiabiLity towards principaL amount and interest thereon.

Dividend

Considering good performance and strong cash flows, your Directors are pLeased to recommend a dividend of ' 6.50 per equity share (325%) on the face vaLue of ' 2 each, for FY2025 vis-a-vis 315% dividend in FY2024. Dividend is subject to approvaL of the Members at the ensuing AnnuaL GeneraL Meeting.

The Company has not paid any Interim Dividend during the financiaL year under review.

The dividend recommended is in accordance with the Company's Dividend Distribution PoLicy, within the ceiLing and in compLiance with the framework prescribed in RBI Master Directions (formerLy known as RBI guideLines on DecLaration of Dividend by NBFCs).

Tax on Dividend

In terms of the provisions of the Income-tax Act, 1961, the Company wiLL make payment of dividend after deduction of tax at source ("TDS”) as per the prescribed rates, to those sharehoLders whose names appear as beneficiaL owner/ member in the List of beneficiaL owners to be furnished by NationaL Securities Depository Limited/ CentraL Depository Services (India) Limited in case of shares heLd in demateriaLised form, or in the Register of Members in case of shares heLd in physicaL

 

fund distribution (through its joint venture Mahindra Manulife Investment Management Private Limited), and fixed deposit schemes. Additionally, your Company continued to penetrate into leasing and loan against property business. In FY2025, the focus has been on building cross sell engine by entering into Insurance Corporate Agency and growing its co-lending and coorigination partnerships with fintechs, NBFCs, Banks and MSME platforms. In addition, your Company has decided to foray into mortgage space.

In the core vehicle finance business, your Company has strengthened its capabilities by designing flexible financial products aligned with customers' cash flow patterns. It has also built heft around underwriting, risk management and has set up a fraud control unit. As a result, it has solidified its dominance in financing Mahindra's vehicles and tractors and is actively pursuing partnerships with prominent Original Equipment Manufacturers ("OEMs”) to expand its market presence. It continues to strengthen its position in the pre-owned vehicle and tractor space.

Pillars of Progress: Growth, Efficiency, and Customer-Centricity

A.    Expanding On-the-Ground Presence

As of 31^st March 2025, MMFSL's network encompasses 1,365 offices and branches across 27 States and 7 Union Territories, reinforcing its nationwide reach. This expansive infrastructure reduces reliance on any single region, mitigating risks posed by localized climatic or economic fluctuations, such as excessive rainfall or drought. Each branch serves as a hub for organic growth, leveraging local relationships to deliver a suite of financial services, including vehicle loans, SME funding, insurance solutions, and more. Centralized oversight ensures consistent asset quality, while the Company's deep penetration into rural and semi-urban markets positions it to address the evolving financial demands and ambitions of India's diverse population.

Your Company's enhanced branch structure facilitates better opportunity to cater to customers' needs and assist us in better customer servicing and improved regulatory compliance.

B.    Strengthening Digital Engagement

Your Company is deepening its reach in rural and semi-urban India through end-to-end digital loan journeys, automated credit assessments, and faster turnaround times.

The redesigned Mahindra Finance Customer App offers customers a seamless experience for EMI payments, loan management, Fixed Deposit booking, and BBPS-enabled utility payments.

 

form, as at the close of business hours on Tuesday, 15^th July 2025 (Record date for the purpose of Dividend).

Unclaimed dividend transferred to Investor Education and Protection Fund

In terms of the provisions of Sections 124 and 125 of the Companies Act, 2013 ("the Act”) read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, during the year under review, the Company has transferred an amount of ' 5,34,873.60 being the unclaimed dividend for FY 2016-17 to the Investor Education and Protection Fund ("IEPF”). The details of total, amount(s) Lying in unpaid dividend account of the Company for last seven years and due to be transferred to IEPF, is mentioned in the Report on Corporate Governance, forming part of this Annual Report.

Dividend Distribution Policy

In compliance with the provisions of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated Dividend Distribution Policy, setting out criteria and circumstances to be considered by the Board while recommending dividend to the shareholders. The Dividend Distribution Policy provides for eligibility criteria, aspects to be considered by the Board while recommending dividend, ceiling on dividend payout ratio etc., in accordance with the Master Direction -Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 dated 19^th October 2023.

As set out in Dividend Distribution Policy, the Company's dividend payout is determined based on available financial resources, investment requirements and optimal shareholder return.

Within these parameters, the Company endeavours to maintain a total dividend payout ratio in the range of 20% to 30% of the annual standalone Profit after Tax ("PAT”) of the Company.

The Dividend Distribution Policy can also be accessed on the Company's website at the web-link: https://www. mahindrafinance.com/investor-relations/policy-and-sharehoLder-information#mmfsL-poLicies .

Operations

Your Company remains dedicated to fueling the aspirations of the customers by providing financing solutions for automobiles and tractors, primarily catering to those who rely on these assets for their livelihoods and personal mobility. Beyond this core offering, your Company has broadened its scope to include preowned vehicle loans, support for small and medium enterprises (SMEs), insurance brokerage services (via its subsidiary Mahindra Insurance Brokers Limited), mutual

The app is available in 12 languages and has over 4.5 lakh+ App sign-ups since launch of revamped version in Dec 2024.

An AI-powered Chatbot launched in 2024, provides multilingual support (in 4 languages) via app and web.

Over 35 lakh+ messages have been exchanged.

UDAAN - Your Company's transformation initiative assists in elevating digital capabilities across the value chain, offering assisted journeys backed by analytics, alternate data, and fraud prevention tools, thereby leading to improved sales and operations productivity, reduced turnaround times, and enhanced financial discipline. The assisted end-to-end digital loan process, enhanced by advanced analytics, alternative data sources, account aggregators (AA), bank statement analysis (BSA), improved fraud prevention measures, credit assessments, digital KYC, e-stamping, e-sign, and e-mandates have led to significantly reduced turnaround times. Additionally, it has streamlined documentation through automation and enhanced transparency throughout the lending process, underscoring our commitment to providing innovative and customer-focused financial solutions.

Our newly launched digital collections application offers a 360-degree view of the customer, featuring a performance and activity dashboard, loan information, payment history, and additional functionalities. By leveraging automated reminders and digital payment platforms, we ensure prompt collections while minimizing operational expenses and reducing delinquencies. Additionally, employees are equipped with nudges to assist customers in navigating repayment options (UPI, QR codes, debit card, internet banking, etc.), addressing any concerns, recording minutes of meetings (MOMs), and providing customized solutions. This initiative has enhanced our portfolio's health, improved customer convenience and experience, and promoted financial discipline within an increasingly digital landscape.

C. Harnessing Technological Innovation

Your Company is leveraging AI, ML, and advanced analytics to optimize underwriting, collections, and decision-making. AI-powered scorecards now segment customers by risk, allowing for smarter approvals and reduced delinquencies. Our GenAI-powered chat interface provides senior management with instant data insights, while a Data Lakehouse enables real-time dashboards and performance tracking.

A next-gen AI collections strategy has reduced EMI bounce rates by 20-25% in early buckets, improving asset quality. AI-ML tools are also being used to enhance the pre-approved and pre-qualified loan offer base by 8x.

Cloud infrastructure has been strengthened through a multi-cloud agnostic strategy, achieving cost efficiencies, better scalability, and improved data security. We have implemented cybersecurity upgrades including DLP, XDR, SIEM, WAF, and MDM tools, along with a 24/7 Security Operations Centre and third-party Red Team assessments to safeguard critical assets.

In line with RBI's IT governance directions, we've built a centralized tech asset inventory, enhanced IT service management workflows, and established robust frameworks for business continuity, risk assessment, and IT outsourcing - reinforcing operational resilience and regulatory compliance.

D.    Data as a Strategic Edge

Your Company has built a centralized Data Lakehouse architecture, empowering real-time access to performance dashboards, KPIs, and crossfunctional business insights. This is strengthening our ability to make data-driven decisions and customize offerings across customer segments.

Advanced analytics are embedded across functions—improving lead conversion, channel productivity, and collections forecasting. These insights are also enhancing financial discipline and regulatory preparedness.

E.    Improved Insurance Coverage of MMFSL assets

Your Company received its corporate agency license from IRDAI in May 2024 and since then Company has partnered with various insurance companies for offering a comprehensive range of insurance products to meet diverse customer needs. Your Company has introduced exclusive group insurance products tailored for its existing customers. Your Company also offers retail insurance solutions in Motor, Health & Life insurance for both new and existing customers.

Your Company leverages its Pan-India branch network of 1365 branches and trained, certified personnel with a strong understanding of customer needs. Your Company has also tied-up with 10 insurance companies - 4 Life, 2 Health and 4 General Insurance companies to provide adequate choice to its customers.

This has resulted in improved insurance penetration and enhanced service delivery through an in-house cLaims team, resulting in better cLaims experience. Continuous employee training and better insurance penetration have further reinforced the model's success, positioning insurance as a strategic lever for risk management. AH these efforts led to an effective insurance coverage of your Company's assets, lives and health of customers.

The distribution network is driven by a dedicated team of employees (Specified Persons) and PoSP (Point of Sales Persons), positioned across ~1200 + locations to ensure widespread reach and seamless customer service.

Additionally, your Company also plans to expand its distribution channel by introducing digital and telemarketing platforms to serve broader customer base across India more efficiently.

F. Future Growth Enablers

MMFSL's vision is to be a leading and responsible financial solution partner of choice for emerging India. This commitment reflects a dual focus on responsible customer service and sustainable profitability, extending beyond traditional lending to a holistic suite of solutions. The emphasis on digital innovation and product diversification is central to this vision.

Your Company targets a sustainable growth trajectory and maintaining stable asset quality. Strategic efforts are focused on deepening penetration in pre-owned car, used tractor, and SME financing, tapping into untapped demand within these segments. To broaden its service offerings, MMFSL has forged new alliances for colending and co-origination. These collaborations enhance outreach, improve credit access, and offer competitive rates to underserved communities. The AUM from these partnerships have gone up significantly in the current financial year as compared to the previous financial year. The Company remains committed to refining its risk management, underwriting frameworks to sustain top-tier asset quality and strengthening its partnerships with fintechs, NBFCs, banks & MSME platforms. Moving forward, the growth strategy will be centred around leveraging digital platforms to enhance service delivery through customer acquisition, establishing strategic alliances and exclusive partnerships with fintech firms and next-generation technology distributors, strengthening

digital capabilities to ensure seamless accessibility and an optimized customer experience and utilizing digital platforms to identify cross-sell and up-sell opportunities while enhancing overall customer service.

Other Developments¦    Mortgage Business

The Board of your Company has approved expansion into Mortgage business which would include providing Housing Finance, Top-up loans, Lease rental discounting, home improvement and home extension loans, balance transfer loans, construction finance etc. Your Company intends to leverage its strong geographical presence in the retail lending space to exploit the mortgage lending opportunity for its existing customers as well as new customers. Your Company would also participate in affordable housing loan schemes of government. This expansion would leverage your Company's established presence in the financial services sector and its deep understanding of the customer needs resulting in increase in the mortgage lending opportunity to its existing customers as well as new customers.

Your Company is in the process of building its mortgage capabilities and is in investment mode with focus on recruitment, infrastructure build out, and technology setup towards building up its capabilities.

¦    Rights Issue of Equity Shares

The Board of Directors of the Company ("Board”) at their meeting held on 13^th February 2025, had inter-alia considered and approved the fund raising by way of offer and issuance of fully paid-up equity shares of the Company for an amount not exceeding ' 3,000 Crore by way of a rights issue ("Rights Issue”) to the eligible equity shareholders of the Company, to primarily maintain a strong capital adequacy ratio keeping in mind Company's growth plans to augment its Assets Under Management ("AUM"). Till the date of this report the Company has not made any public announcement and has not undertaken further action or decision in relation to the Rights Issue including setting a Record date or ratio or pricing. Necessary intimations/ announcements to the shareholders, stock exchanges etc., on the above would be made in due course.

Change in Nature of Business

There has been no change in the nature of business and operations of the Company during the year under review.

RBI Compliances

Your Company has been categorised as an NBFC- Upper Layer vide press release dated 30^th September 2022, issued by RBI. Your Company has always endeavored to maintain the highest standards of compliance within the organisation and shall continue to do so going ahead. The Company continues to comply with all the applicable laws, regulations, guidelines etc. prescribed by the RBI, from time to time including the norms pertaining to capital adequacy, non- performing assets etc.

Your Company's asset liability management is reviewed on quarterly basis by a focused Board level committee viz. Asset Liability Committee. Your Company's liquidity coverage ratio ("LCR”) was 277% as on 31^st March 2025 against the mandatory requirement of 100%.

Your Company has adopted all the mandatory applicable policies under Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 like Large Exposure Policy, Internal Capital Adequacy Assessment Policy (ICAAP), Compliance Policy etc.

Compliance Risk Assessment Framework and Compliance Testing ("CRAFT")

Your Company has also put in place Compliance Risk Assessment Framework and Compliance Testing in compliance with RBI circular dated 11^th April 2022.

Business Continuity Policy

In order to have robust framework & process for Business continuity, your Company has implemented Business Continuity Management Policy which inter-alia includes identification, monitoring, reporting, responding and managing the risks including mitigating risks of a significant / prolonged business disruption in order to protect the interests of the Company's customers, employees and stakeholders.

Your Company continues to invest in talent, systems and processes to further strengthen the control, compliance, risk management and governance standards in the organisation.

Internal Ombudsman

Your Company has appointed an Internal Ombudsman ("IO”) in compliance with the Master Direction - Reserve Bank of India (Internal Ombudsman for Regulated Entities) Directions, 2023 dated 29^th December 2023, ("Master Directions”).

In compliance with Master Directions, Mr. Alok Kumar Sharma has been appointed and is currently serving as the 'IO' of the Company, contact details of IO are available on the website and can be accessed on the website at https://www.mahindrafinance.com/customer-service/nbfc-ombudsman-scheme/contact-details

The Board of Directors at the quarterly Board meetings review number of complaints escalated to IO and status of disposal of such complaints in compliance with the said RBI circular. Report on number of complaints escalated to IO and status of disposal of such complaints is reproduced hereunder:

No of complaints outstanding at the beginning of the year	404
No of complaints received during the year	43,174
Of the complaints received, number of complaints referred to IO during the year, which were rejected by the Company	2,757
Of the complaints referred to IO how many complaints were agreed by IO	2,749
Of the complaints referred to IO how many complaints were disagreed by IO	8
Total complaints pending with IO at the end of the year	74

Macro factors and sourcing of funds:

During the year under review, Reserve Bank of India ("RBI”) focused mainly on neutral monetary policy to ensure that inflation durably aligns with the target, while supporting growth. During Q4 FY2025 with inflation on a decreasing trend and increasing global uncertainties, RBI reduced the REPO Rate by 25bps to 6.25%. Liquidity conditions remained tight with the banking sector liquidity remaining largely negative in FY2025.

Inflation in India has remained majorly below 6% (RBI upper tolerance limit) throughout the year. Consumer Price Index ("CPI”) inflation was 3.34% in March 2025. Globally, inflation showed a downward trajectory and seems to be moderating paving the way for a growth revival. However, this comes with a caution as successive shocks like the Russian-Ukraine war, Israel-Hamas-Iran conflict, significant US policy changes by new administration in 4 distinct areas viz: trade, immigration, fiscal policy and regulation which is expected lead to global uncertainty and economic slowdown. The rupee has remained under pressure throughout FY2025 against the US dollar. During Q4 FY2025, it remained volatile primarily on account of proposed US policy changes, however it recovered and ended at ' 85/$ mark.

The 10 Year G Sec curve has been following a reducing trend from around 7.1% to 6.5% during the financial year. During the year, interest cost on borrowed funds remained at 7.64% (interest cost to average borrowing) for the Company.

During the year under review, your Company continued with its diverse methods of sourcing funds incLuding borrowing through Secured and Unsecured Debentures, Term Loans, External Commercial Borrowings, Securitisation, Fixed Deposits, Commercial Papers, Inter Corporate Deposit etc., and maintained prudential Asset Liability match throughout the year. Your Company sourced long-term debentures and loans from banks and other institutions at attractive rates. Your Company continues to expand its borrowing profile by tapping new lenders and geographies.

Securitisation

During the year, your Company successfully completed Securitization/Direct Assignment transactions aggregating to ' 6,530 crore.

Non-Convertible Debentures

During the year under review, your Company raised an aggregate of ' 7,255 crore through issuance of Nonconvertible ("NCDs") debentures private placement basis as mentioned hereunder:

1.    ' 5,755 crore, raised though issuance of Secured Redeemable Non-Convertible Debentures.

2.    ' 1,500 crore raised through issuance of Unsecured Redeemable Non-Convertible Subordinated Debentures eLigibLe for Tier II CapitaL.

As specified in the respective offer documents, the funds raised from issuance of NCDs were utiLised for various financing activities, onward lending, repaying the existing indebtedness, working capital and for general corporate purposes of the Company. Details of the end-use of funds were furnished to the Audit Committee on a quarterly basis. The NCDs are listed on the debt market segment of BSE Limited. As on 31^st March 2025 there are no unlisted NCDs.

During the year, your Company has redeemed NCDs worth ' 4,645 crore and subordinated debt worth ' 215 crore on private placement basis.

Your Company is in compliance with the applicable guidelines issued by Securities and Exchange Board of India and other applicable regulators in this regard.

There has been no default in making payments of principal and interest on aLL the NCDs issued by the Company on a private pLacement basis and through pubLic issue. Further, there was no deviation/variation in use of proceeds raised from the object stated in the offer document. As on 31^st March 2025, there was no unpaid/uncLaimed interest on NCDs issued on a private pLacement basis. With respect to the three pubLic issuances of NCDs made by the Company, aggregate PrincipaL payment of ' 5,93,000 /- and Interest of ' 40,38,064 /- was uncLaimed by the investors as on 31^st March 2025. Reminders have been sent to the NCD hoLders to cLaim the same.

Commercial Paper

As on 31^st March 2025, the Company had CommerciaL Paper ("CPs”) with an outstanding amount (face vaLue) of ' 2,153 crore. CPs constituted approximateLy 2.09% of the outstanding borrowings as on 31^st March 2025. The CPs of the Company are Listed on the debt market segment of the NationaL Stock Exchange of India Limited.

Borrowings

In order to expand the business of the Company and to cater the enhanced budgeted disbursements, the Board of Directors of the Company have subject to the approvaL of the sharehoLders of the Company, approved increase in the overaLL borrowing Limit from ' 1,30,000 crore to ' 1,50,000 crore.

Credit Ratings

Your Company enjoys highest rating for its Long-term and short-term borrowing programmes from aLL the credit rating agencies that it works with. Your Company has been rated by CRISIL Ratings Limited ("CRISIL”) & India Ratings and Research Private Limited ("India Ratings”) for its NonConvertibLe Debentures program, CommerciaL Papers, Banking FaciLities & Fixed Deposits. Further, CARE Ratings Limited ("CARE”) and Brickwork Ratings India Pvt. Ltd. ("BWR”) has rated your Company for the Non-ConvertibLe Debentures program. These rating agencies have reaffirmed the highest credit rating for your Company's short-term & Long-term borrowing instruments. Your Company beLieves that its credit ratings and strong brand equity enabLes it to borrow funds at competitive rates. The details of ratings are given in the Corporate Governance Report, forming part of this AnnuaL Report.

Capital Adequacy

As on 31^st March 2025, the CapitaL to Risk Assets Ratio ("CRAR”) of your Company was 18.33% which is weLL above the minimum requirement of 15% CRAR prescribed by the Reserve Bank of India.

Out of the above, Tier I capitaL adequacy ratio stood at 15.25% and Tier II capitaL adequacy ratio stood at 3.08% respectiveLy.

Share Capital

The issued, subscribed and paid-up Equity Share CapitaL as on 31^st March 2025 was ' 247.1 crore, consisting of 123,55,29,920 Equity Shares of the face vaLue of ' 2 each, fuLLy paid-up.

There was no change in the issued, subscribed and paid-up share capitaL during the year under review.

As on 31^st March 2025, none of the Directors of the Company hoLd instruments convertibLe into equity shares of the Company. DetaiLs of Restricted Stock units ("RSUs") granted to Executive Directors are given in the Corporate Governance Report forming part of this AnnuaL Report.

Economy Global Economy

As per the InternationaL Monetary Fund, the gLobaL economy in CY 2024 navigated a compLex Landscape shaped by geopoLiticaL shifts, trade fluctuations, and inflationary trends. The EL Nino phenomenon significantLy impacted economic stabiLity, causing droughts, floods, and disruptions to marine ecosystems, affecting

agricuLture, infrastructure, and the fishing industry whiLe increasing inflationary pressures. OiL prices remained voLatiLe, initiaLLy rising due to geopoLiticaL tensions and positive macroeconomic trends but Later decLining amid bearish sentiment, economic concerns, and easing supply risks. Moreover, gLobaL trade faced disruptions as Red Sea attacks reduced Suez CanaL traffic, whiLe Panama CanaL drought-driven restrictions sLowed shipments across the worLd. GLobaL growth is expected moderate from 3.3% in 2024 to 2.8% in 2025, and projected to stabiLise at 3.0% in 2026. SuppLy chain vuLnerabiLities prompted businesses and governments to reassess trade dependencies and impLement strategic measures. Inflation is expected to ease from 5.7% in 2024 to 4.3% in 2025 and 3.6% in 2026, remained a concern, influencing cautious monetary poLicies. Rising trade tensions, incLuding new tariffs and retaLiatory actions, couLd introduce uncertainties, impacting inflation and economic momentum. However, economies are expected to Leverage innovation, sustainabiLity efforts, and poLicy interventions to maintain Long-term stabiLity in future.

Domestic Economy

India remained one of the fastest-growing major economies as strong domestic demand, structuraL reforms, and supportive poLicies drove its expansion. The country surpassed the UK to become the worLd's fifth-Largest economy, with steady growth supported by manufacturing expansion, a robust services sector, and increased infrastructure investments. Government initiatives, such as digitaL transformation and financiaL incLusion, strengthened domestic manufacturing and attracted foreign direct investment. Despite gLobaL uncertainties, geopoLiticaL tensions, and inflationary pressures sLowing growth in FY2025, the economy is expected to reach 6.5% in FY2026 as per the RBI Monetary PoLicy Report (ApriL-2025). However, with the inflationary pressures easing, the Reserve Bank of India reduced the repo rate to 6.00% in ApriL 2025. WhiLe gLobaL risks persist, India's economic outLook remains strong, reinforcing its position as a Leading gLobaL economic powerhouse.

Management Discussion and Analysis

In accordance with the appLicabLe provisions of the Master Direction- Reserve Bank of India (Non-Banking FinanciaL Company - ScaLe Based ReguLation) Directions, 2023 and the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015, a detaiLed anaLysis of the Company's performance is discussed in the Management Discussion and AnaLysis Report, which forms part of this Report.

Corporate Governance

Your Company practices a culture that is built on core values and ethical governance practices. Your Company is committed to Integrity and transparency in all its dealings and pLaces high emphasis on business ethics. The Board of your Company exercises its fiduciary responsibilities in the widest sense of term and endeavours to enhance long-term shareholder value. Company's disclosure regime is aimed at achieving best practices, gLobaLLy

A Report on Corporate Governance along with a Certificate from M/s. KSR & Co, Company Secretaries LLP, Secretarial Auditor, certifying compliance with the conditions of Corporate Governance forms part of this Report.

Ethics Framework

The Ethics & Corporate Governance framework is anchored by dearly defined policies and procedures, covering areas such as Anti-Bribery and Anti-Corruption Policy ("ABAC”), Policy on Gifts & Entertainment ("G&E"), PoLicy on Prevention of SexuaL Harassment at WorkpLace ("POSH"), WhistLe-BLower PoLicy ("WB") to ensure robust Corporate Governance.

New joiners are mandatoriLy required to undertake e-Learning moduLes on the Company's Code of Conduct ("COC"), POSH and ABAC. In addition to this, an AnnuaL CompLiance DecLaration ModuLe on COC is mandated for aLL the empLoyees.

The Code of Conduct and aLL the Company's poLicies are accessibLe on the Company's website; in the Governance section at the web-Link: https://www.mahindrafinance. com/investor-reLations/poLicy-and-sharehoLder-information#mmfsL-poLicies .

The Code of Conduct Committee and the Audit Committee ensures that the areas of Ethics & Governance framework are executed effectiveLy and the decisions on substantiated cases are taken in a fair, just and consistent manner across business.

Investor Relations

During the current year, your Company has met muLtipLe investors and anaLysts-both domestic and international These sessions were undertaken through a mix of one-on-one or group meetings. Your Company aLso participated in muLtipLe domestic conferences organised by reputed broking houses, in addition to accessing overseas investors through Non-DeaL Roadshows ("NDRs"). Having meetings in virtuaL format (through conference caLLs and video conferencing) enabLed accessing a Larger investor base.

Your Company hoLds quarterLy and annuaL earnings caLLs through structured conference caLLs and/or web-Links, detaiLs of which are made avaiLabLe to pubLic through the Company's website and stock exchange(s).

During these meetings/ earnings caLLs, the interactions are based on generaLLy avaiLabLe information accessibLe to the pubLic in a non-discriminatory manner. No unpubLished price sensitive information is shared during such meetings. Your Company beLieves in transparent communication and have been voLuntariLy discLosing criticaL information regarding Company's performance through monthLy/quarterLy updates.

Silent period

As a good governance practice, your Company voLuntariLy observes a 'SiLent / Quiet period' starting from 1^st day of the start of the month after the end of the quarter for which the financiaL results are to be announced tiLL the time of announcement of said resuLts. During this period, no meetings with investors/anaLysts/funds are heLd to discuss unpubLished financiaL performance of the Company to ensure protection of the Company's UnpubLished Price Sensitive Information ("UPSI").

Consolidated Financial Statements

The ConsoLidated FinanciaL Statements of your Company, its subsidiaries, associate/joint venture for FY2025, prepared in accordance with the reLevant provisions of the Companies Act, 2013 ("the Act") and appLicabLe Indian Accounting Standards aLong with aLL reLevant documents and the Auditors' Report form part of this AnnuaL Report.

Pursuant to the provisions of Section 136 of the Act, the StandaLone and ConsoLidated FinanciaL Statements of the Company, aLong with reLevant documents and financiaL statement of each of the subsidiaries of the Company are avaiLabLe on the website of the Company and can be accessed at the web-Link: https://www. mahindrafinanc.e.c.om/investor-relations/financ.ial-information .

Subsidiaries, Joint Venture(s) and Associate(s)

A report on the performance and financiaL position of each of the Company's subsidiaries, associate/ joint venture is incLuded in the ConsoLidated FinanciaL Statements and the saLient features of their financiaL statements and their contribution to overaLL performance of the Company as required under Section 129(3) of the Companies Act, 2013 ("the Act") read with RuLe 8(1) of the Companies (Accounts) RuLes, 2014, is provided in Form AOC-1, annexed as 'Annexure A’ to the ConsoLidated FinanciaL Statements and forms part of this AnnuaL Report.

Material Subsidiary

ReguLation 16 of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations") defines a "materiaL subsidiary" to mean a subsidiary, whose turnover or net worth exceeds ten percent of the consoLidated turnover or net worth respectiveLy, of the Listed entity and its subsidiaries in the immediateLy preceding accounting year.

Mahindra RuraL Housing Finance Limited ("MRHFL") which was a materiaL subsidiary of the Company up to year ended 31^st March 2024, did not meet the criteria for materiaL subsidiary as stated in reguLation 16(1)(c) of the Listing ReguLations for FY2025 and accordingLy MRHFL ceased to be a MateriaL subsidiary of the Company for FY2025.

Your Company does not have any MateriaL Subsidiary for the FinanciaL year ended 31^st March 2025.

Operational and performance highlights of the Company’s Subsidiary/Joint venture Companies for FY2025 are given hereunder:Mahindra Rural Housing Finance Limited

Mahindra RuraL Housing Finance Limited ("MRHFL"), the Company's subsidiary, engaged in the business of providing Loans for purchase, renovation and construction of homes to individuaLs in the Low and middLe income category of the country, registered a totaL income of ' 1,196.70 crore as compared to ' 1,294.44 crore for the previous year, decrease of 7.55 % over the previous financiaL year. Loss Before Tax stood at ' 304.58 crore as compared to profit before tax of ' 4.84 crore for the previous year. Loss After Tax stood at ' 227.94 crore as compared to profit after tax of ' 3.60 crore in the previous year. Company is making strategic efforts to drive enhanced operationaL efficiencies.

During the year under review, MRHFL disbursed Loans aggregating to ' 2,023 crore serving more than 12,600 househoLds as against ' 2,071 crore in the previous year. MRHFL is expanding its footprint in affordabLe housing.

Mahindra Insurance Brokers Limited

Mahindra Insurance Brokers Limited ("MIBL"), whoLLy owned subsidiary of the Company (effective 22^nd September 2023) is engaged in the business of Direct and Re-insurance Broking.

During the year under review, there was growth of 4.03% in Gross Premium faciLitated for the Corporate and RetaiL business Lines, increasing from ' 4,555.86 crore in FY2024 to ' 4,739.27 crore in FY2025. The TotaL Income increased by 13.21% from ' 1,094.95 crore in FY2024 to ' 1,239.59 crore in the FY2025. The Profit Before Tax decreased by 26.02% from

' 167.50 crore to ' 123.92 crore and the Profit After Tax decreased by 28.12% from ' 123.52 crore to ' 88.78 crore during the same period.

Mahindra Manulife Investment Management Private Limited

Mahindra ManuLife Investment Management Private Limited ("MMIMPL") acts as an Investment Manager for the schemes of Mahindra ManuLife MutuaL Fund ("MutuaL Fund"). As on 31^st March 2025, MMIMPL was acting as the investment manager to 24 schemes of the MutuaL Fund. The average Assets Under Management in these 24 schemes rose to ' 27,090 crore as on 31^st March 2025 as compared to ' 19,659 crore as on 31^st March 2024, deLivering a growth of 38% in assets. Of these assets, ' 24,441 crore were in equity and hybrid schemes in March 2025, as compared to ' 17,613 crore in March 2024, a growth of 38.77%. MMIMPL has empaneLed 34,439 distributors and now has 14,06,485 investor accounts in these 24 schemes.

During the year under review, the totaL income of MMIMPL was ' 87.71 crore as compared to ' 63.54 crore for the previous year. The operations for the year under consideration have resuLted in a Loss of ' 10.06 crore as against a Loss of ' 27.27 crore during the previous year. MMIMPL pLans to reduce Losses through focus on consistent fund performance, saLes strategy aimed to buiLd market share with key distributors, and prudent cost management. AdditionaLLy, MMIMPL pLans to enhance product suite by Launching 2-3 new funds during FY2026 to enabLe soLutions across the risk reward spectrum.

Mahindra Manulife Trustee Private Limited

Mahindra ManuLife Trustee Private Limited ("MMTPL") acts as the Trustee to Mahindra ManuLife MutuaL Fund ("MutuaL Fund").

During the year, MMTPL earned trusteeship fees of ' 99.14 Lakhs and other income of ' 14.62 Lakhs as compared to ' 107.03 Lakhs and ' 10.29 Lakhs, respectiveLy, for the previous year. MMTPL recorded a profit of ' 61.82 Lakhs for the year under review as compared to profit of ' 59.72 Lakhs in the previous year.

Mahindra Ideal Finance Limited (Sri Lanka)

Your Company hoLds a 58.2% stake in Mahindra IdeaL Finance Ltd (Sri Lanka) {"MIFL"] with a totaL investment of ' 77.97 crore. Leveraging Mahindra Finance's expertise of over 30 years in the financiaL services sector and the LocaL management's expertise of the domestic market, MIFL is poised to buiLd a Leading financiaL services business in Sri Lanka.

Transfer of Unclaimed amounts pertaining to Fixed Deposits to IEPF:

Pursuant to Section 125 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) RuLes, 2016 ("the IEPF RuLes") as amended from time to time, matured Deposits remaining uncLaimed for a period of seven years from the date they became due for payment are required to be transferred to the Investor Education and Protection Fund ("IEPF") estabLished by the CentraL Government. Further, interest accrued on the deposits which remain uncLaimed for a period of seven years from the date of payment are aLso required to be transferred to the IEPF under Section 125(2)(k) of the Companies Act, 2013.

The Company, during FY2025 has transferred to the IEPF an amount of ' 0.35 crore being the uncLaimed amount of matured fixed deposits and ' 0.05 crore towards uncLaimed/unpaid interest accrued on the Deposits. The concerned depositor can cLaim the Deposit and/or interest from the IEPF by foLLowing the procedure Laid down in the IEPF RuLes.

Loans and Advances

During the year under review, the Company has not given any Loans and advances in the nature of Loans to its Directors or subsidiaries or associate or to firms/ companies in which Directors are interested and no such transactions were outstanding during the year.

DiscLosure on transaction with Mahindra and Mahindra Limited (Promoter) hoLding 52.16% in the Company, as on 31^st March 2025, and other Promoter Group Companies, is provided in note no. 51 of Audited StandaLone FinanciaL Statements for year ended 31^st March 2025.

AccordingLy, the discLosure of particuLars of Loans/ advances, etc., as required to be furnished in the AnnuaL Accounts of the Company pursuant to ReguLation 34[3] and 53(1)(f) read with paragraph A of ScheduLe V of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 is not appLicabLe to the Company.

Particulars of Loans, Guarantees or Investments in Securities

Your Company, being an NBFC registered with RBI and engaged in the business of giving Loans in ordinary course of its business, is exempt from compLying with the provisions of Section 186 of the Companies Act, 2013 ("the Act") with respect to Loans.

 

With improving economic and business environment witnessed in Sri Lanka, MIFL recorded significant rebound in its business activities. The disbursement in vehicLe Lending business in FY2025 was LKR 8.8 Bn, a growth of 212% over FY2024. The Gold loan disbursements docked 20.1 Bn, an increase of 82% over FY2024.

As at 31^st March 2025, the Company's GS3 LeveL dropped to 1.86%, which is industry Leading in the context of the Sri Lankan market. The Company achieved year-round coLLection efficiency of more than 100% in FY2025.

MIFL's totaL income for the FY25 was SriLankan rupee ("LKR") 2,741 Mn vs LKR 2,309 Mn of FY2024. Profit Before Tax (PBT) in FY2025 was LKR 434 Mn, an increase of 30% over FY2024 PBT of LKR 334 Mn. and Profit After Tax (PAT) in FY2025 was LKR 146 Mn, a growth 42% over FY2024 PAT of LKR 103 Mn. MIFL continued investments in increasing its reach to grow the business. The branch network grew to 35 branches, an addition of 5 branches in FY2025, covering the Length and breadth of the country. Investments were made in IT aLso to enhance the customer and user experience.

Mahindra Finance CSR Foundation

Mahindra Finance CSR Foundation was incorporated on 2^nd ApriL 2019 as a whoLLy owned subsidiary of Company registered under Section 8 of the Companies Act, 2013 to promote and support CSR projects and activities of the Company and its group Companies.

The foundation has obtained Registration under Section 12AA and Section 80G of the Income Tax Act, 1961 and CSR Registration Number.

Joint Venture/AssociateMahindra Finance USA LLC ["MFUSA"]

MFUSA's retaiL and deaLer disbursement registered a decrease of 12.39% to USD 803.93 miLLion for the year ended 31^st March 2025 as compared to USD 917.58 miLLion for the previous year.

TotaL Income increased by 5.55% to USD 82.16 miLLion for the year ended 31^st March 2025 as compared to USD 77.84 miLLion for the previous year. Profit before tax was reLativeLy flat at USD 22.67 miLLion as compared to USD 22.86 miLLion for the previous year. Profit after tax decreased by 1.61% to USD 16.93 miLLion as compared to USD 17.21 miLLion in the previous year.

Changes in Subsidiaries, Joint Venture or Associate Companies during the year

During the year under review, there were no changes in the Company's Subsidiaries, Joint Venture/ Associate Companies.

Fixed Deposits and Loans/ Advances

Your Company offers a wide range of Fixed Deposit schemes that cater to the investment needs of various cLasses of investors. These Deposits carry attractive interest rates with superior service enabLed by robust processes and technoLogy. In order to tap ruraL and semi-urban savings, your Company continues to expand its network and make its presence feLt in the most remote areas of the country.

During the year, CRISIL and India Care Ratings Private Limited (FITCH) have reaffirmed a rating of 'CRISIL AAA/StabLe' and 'IND AAA/StabLe' respectiveLy. your Company's Fixed Deposit program which represents highest degree of safety and security of principaL as weLL as timeLy payment of interest. Your Company's Deposits continue to be a preferred investment avenue amongst the investors.

Mahindra Finance accepts deposits from both retaiL and corporate investors. During the year, your Company has mobiLized funds to the tune of ' 6,620.13 Crore from fixed deposits. The consoLidated deposit book of Mahindra Finance stood at ' 10,926.45 Crore as on 31^st March 2025, with an investor base of over 1,01,324 investors.

Digital initiatives

Your Company continues to take rapid strides in improving its digitaL footprint and enabLing an end-to-end paperLess process. Your Company has Launched Mahindra Finance Customer App enabLing customer to enjoy muLtipLe services and products from Mahindra Finance under one pLatform.

Your Company continues to serve the investors by introducing severaL customer centric measures on an ongoing basis to further strengthen its processes in sync with the requirements of the Fixed Deposit ("FD") hoLders. Your Company periodicaLLy sends various intimations via SMS, e-maiLs, post, courier etc., to its investors as weLL as sends reminder emails to cLients whose TDS is LiabLe to be deducted before any payout/accruaL. Your Company aLso provides a digitaL pLatform for onLine appLication/ renewaL of deposits, onLine generation of TDS certificates from customer/ broker portaL and seamLess investment process for its empLoyees.

Your Company has roLLed out severaL customer centric and technoLogicaL initiatives aimed at offering a superior experience to fixed deposit hoLders. Some key ones incLude:

¦    Empowering customers to on board and avaiL servicing through Mahindra Finance Customer App.

¦    Improved customer experience by introducing Digi-Locker based KYC verification to increase coverage of digitaL on boarding.

¦    Introduced partiaL renewaL of FD to reduce the hassLe of rebooking for our customers.

¦    DeveLoped and integrated UPI intent flow to reduce the chances for payment faiLures.

With respect to Fixed Deposits accepted by the Company there has been no default in repayment of principaL or interest on fixed deposit during the year under review.

Your Company being a Non-Banking FinanciaL Company the discLosures required as per RuLe 8(5)(v) and (vi) of the Companies (Accounts) RuLes, 2014 read with Sections 73 and 74 of the Companies Act, 2013, are not appLicabLe to it.

The information pursuant to CLause 35(1) of Master Direction DNBR.PD.002/03.10.119/2016-17 dated 25^th August 2016 issued by the Reserve Bank of India on Non-Banking FinanciaL Companies Acceptance of PubLic Deposits (Reserve Bank) Directions, 2016 ("NBFC ReguLations"), regarding unpaid/uncLaimed pubLic deposits as on 31^st March 2025, is furnished beLow:

i.    TotaL number of accounts of PubLic Deposits of the Company which have not been cLaimed by the depositors after the date on which the deposit became due for repayment: 3434.

ii.    TotaL amounts due under such accounts remaining uncLaimed beyond the dates referred to in cLause (i) as aforesaid: ' 3.81 crore.

Reminders are being sent to the Depositors to cLaim their uncLaimed amounts. Measures taken by the Company to reduce uncLaimed amount incLude penny drop testing, reaching out investors through SMS/ CaLLs/ EmaiL/PhysicaL Letters, assisting nominees, LegaL heir on cLaim settLement process. Company is continuousLy improving and evoLving its operationaL practices to reduce the uncLaimed amounts pertaining to Fixed Deposits.

Pursuant to the provisions of Section 186(4) of the Act, details with regard to the investments made by the Company, as appLicabLe, are given in Note no. 51 (iv) o1 the Standalone financial statements, forming part o1 this Annual Report.

Achievements

Awards/Recognitions received by your Company

during the year are enumerated hereunder:

CSR

¦    Honoured with the Best CSR Initiative & Best Financial Inclusion Initiative Award at the prestigious DNA Awards 2024.

¦    Mahindra Finance's 'Swabhimaan' initiative was honoured with the CSR Project of the Year Award 2023-24 at the India CSR Summit & Awards.

Human Resources

¦    Awarded for its 'Transformational Leadership Development Program' in the category of 'Best Learning & Development Program of the Year- NBFC/HFC/MFI' at the ETBFSI ExceLLer Awards 2024.

¦    Recognised as one of the best workplaces in the categories of 'Top rated Large Company' & 'Top rated financiaL services Company' at the AmbitionBox EmpLoyee Choice Awards 2024.

¦    Awarded "Bombay's WOW WorkpLace Award 2025” for out commitment to buiLding an inspiring, empLoyee-first workpLace.

¦    Recognised as the 'Best NBFC in TaLent & Workforce' at the 29^th Edition of Best Banks and NBFCs Awards organised by Business Today.

Marketing

¦    Awarded for content fiLm 'Main SambhaaL Lungi' in the category of Community Connect at the e4m Do Good Awards.

¦    Won the 'Location-Based Marketing Campaign of the Year' award at the e4m Indian DigitaL Marketing Awards 2024.

Sustainability

¦    Ranked 1^st at BW Business WorLd India's Most SustainabLe Companies 2024 in the FinanciaL Services and Insurance Sector.

¦    Won the GoLd Award for Education and SkiLLs DeveLopment and won the Bronze Award for EnvironmentaL SustainabiLity' at the ACEF Asian Business Leaders Awards 2024.

¦    Mahindra Finance has increased its Dow Jones SustainabiLity Index (DJSI) score to '50' becoming best-in-cLass for Listed NBFCs in India.

Employee Stock Option Scheme- 2010 and Restricted Stock Unit Plan- 2023

With a view to continue the practice of rewarding performance of the empLoyees, creating ownership culture and to retain, motivate and attract taLent in Light of growing business your Company has adopted Restricted Stock Unit PLan nameLy 'Mahindra and Mahindra FinanciaL Services Limited-Restricted Stock Unit PLan 2023' ("MMFSL RSU PLan-2023”) and Mahindra & Mahindra FinanciaL Services Limited EmpLoyees' Stock Option Scheme-2010 ("2010 Scheme”).

During the year under review, your Company granted 6,49,326 Restricted Stock Units ("RSU's”) to the eLigibLe empLoyees under MMFSL- RSU PLan 2023. No options were granted under the Mahindra & Mahindra FinanciaL Services Limited EmpLoyees' Stock Option Scheme-2010 ("2010 Scheme”).

The Company does not have any scheme to fund its empLoyees to purchase the shares of the Company.

The 2010 Scheme and the MMFSL RSU PLan - 2023 of the Company is in compLiance with the Securities and Exchange Board of India (Share Based EmpLoyee Benefits and Sweat Equity) ReguLations, 2021 ("SBEBSE ReguLations”) and there were no amendments to the aforesaid Scheme and PLan during FY2025. A Certificate from M/s. KSR & Co, Company Secretaries, LLP, SecretariaL Auditor of the Company for FY2025, certifying that the Company's above-mentioned Scheme and PLan have been impLemented in accordance with the SBEBSE ReguLations and the resoLution passed by the Members, wouLd be made avaiLabLe for inspection by the Members through eLectronic mode at the AnnuaL GeneraL Meeting ("AGM”) scheduLed to be heLd on 22^nd JuLy 2025.

The appLicabLe discLosures as stipuLated under SBEBSE ReguLations for the year ended 31^st March 2025, with regards to the 2010 Scheme, MMFSL RSU PLan 2023 and Company's stock option trust is upLoaded on the Company's website and can be accessed at the web-Link: https://www.mahindrafinance.com/investor-reLations/ financiaL-information#annuaL-reports .

In terms of reguLation 46(2)(za) of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015, the Company has upLoaded 2010 Scheme and MMFSL RSU PLan-2023 on its website and the same can be accessed at https://www.mahindrafinance.com/ investor-reLations/discLosures-under-reguLation-46-and-62-of-sebi-Lodr

Environment, Social and Governance Sustainability Vision

Mahindra Finance has estabLished its sustainabiLity mission through a board-approved sustainabiLity poLicy that buiLds on the Mahindra Rise principLes of 'Rise for a More Equal World', 'Rise to Be Future Ready' and 'Rise to Create VaLue'. The focus of FY2025 was to Lay the brickwork for Long-term initiatives aLigned to the above three principLes whiLe buiLding capacity of internaL stakehoLders to integrate sustainabiLity practices into the business operations. The priority areas for sustainabiLity integration into the business ethos was cLimate change, innovative energy transition, incLusive poLicies, and stakehoLder engagement.

Climate Change

CLimate change management at Mahindra Finance has a two-pronged approach - (1) protection of Mahindra Finance assets and offices from increased probabiLity of extreme cLimate events and (2) reduction of the carbon footprint across the vaLue chain.

1)    Mahindra Finance undertook a cLimate change scenario anaLysis for the 1350+ offices of the company to understand impact from extreme cLimate events (fLood, drought and cycLonic events) in a worst-case scenario. The resuLts of the scenario anaLysis were pubLished in the previous Integrated Report and a comprehensive cLimate action pLan was deveLoped in-house for offices in highLy prone areas. The action pLan defines processes for stabiLizing existing office structures, creating earLy warning systems for cLimate hazards, estabLishing disaster management infrastructure and integrating cLimate hazard risk in the audit checkLists for new faciLities and periodic audits.

Mahindra Finance has aLso initiated a study to map the existing vehicLe and tractor financing portfoLio with cLimate hazard prone areas. The piLot study wiLL be integrated into the FY2026 cLimate strategy to de-risk the company from increased cases of defauLt and non-performing assets due to extreme cLimate events. The piLot study wiLL then be roLLed out for other business verticaLs of Mahindra Finance.

2)    The Long-term targets for reduction of the carbon footprint across the vaLue chain was decLared through Science Based Targets Initiative (SBTi) in FY2023 and defined in the previous Integrated Report. The targets focus on a 50.4% reduction in direct emissions (Scope 1) and indirect emissions (Scope 2) as of FY2032 compared to the baseLine vaLues determined in FY2023. The targets aLso incLude a 58.1% reduction in indirect emissions (Scope 3) across the same timeLine for specific activities in the vaLue chain - purchased goods

and services, business traveL, empLoyee commute, waste generation, and purchased capitaL goods. SustainabiLity initiatives in FY2025 focused primariLy on waste reduction through 100% recycLing of waste streams and energy transition that has resuLted in a ~20% reduction of energy usage compared to FY2023 baseLine vaLues. The efforts have resuLted in a net reduction of absoLute scope emissions (scope 1-3) by 11,300+ tonnes CO₂ compared to previous year.

Innovative Energy Transition

Mahindra Finance has buiLt on the energy reduction initiatives that had been commissioned in FY2023 incLuding 100% conversion to Light emitting diodes (L.E.D.), procurement of 5* energy saving air conditioners, soLar-powered air conditioners, and instaLLation of brushLess DC motor (BLDC) fans. A piLot program for the purchase of green energy at the Mahindra Finance corporate office in KurLa, Mumbai was initiated in November 2024 with intentions to expand across other Mahindra Finance offices in Locations where the reguLatory Landscape permits the purchase of green tariffs. The above energy initiatives have contributed to reduced energy costs, reduced emissions from purchase of grid-based energy (Scope 2) and use of newer safer technoLogy in active office buiLdings.

Inclusive Policies

Mahindra Finance announced its membership to the United Nations GLobaL Compact (UNGC) in FY2024 to show its commitment to human rights, good working conditions and ethicaL practices in the workpLace. In FY2025, a Human Rights Due DiLigence (HRDD) study was commissioned to evaLuate the human rights poLicies and procedures, conduct consuLtations with empLoyees across LeveLs to determine on-ground impLementation of these procedures, review efficacy of data privacy programs and extension of the above to major suppLiers in the vaLue chain. The resuLts of the study wiLL be impLemented in FY2026 to strengthen the human rights process across the Mahindra Finance vaLue chain.

Training programs on the human rights topics was expanded to the entire workforce in FY2025 incLuding the incorporation of these topics in the empLoyee induction and refresher programs. Diversity, equity & incLusion (DE&I) programs were expanded in FY2025 to incLude impactfuL gender representation initiatives, LocaLized EmpLoyee Resource Groups (ERGs), progressive poLicies fostering workpLace equity, and focused empLoyee sensitization efforts to promote an incLusive cuLture.

Looking Forward to FY2026 on Sustainability

The focus of FY2026 is to buiLd on sustain ability initiatives that have commissioned in FY2025 and to better integrate sustainabiLity into the business operations. A dedicated sustainability department has been created in FY2025 to ensure adequate allocation of resources for the long-term sustainability vision and to increase senior management oversight on the topic. The mandate of the CSR board sub-committee has been expanded in the latter half of FY2025 to incorporate updates on the sustainability performance of the company and to approve sustainability policies and procedures. Operational committees with key departments including HR, risk and finance are being formulated in FY2026 to ensure integration of sustainability topics in day-to-day management. The process of integrating Environment, Social and Governance (ESG) risk management into the business loan cycle is being developed to align with global expectations on a sustainable investment strategy.

A big focus of the next financial year is to align with the Mahindra Rise commitment of "Making Sustainability Personal” by creating training and capacity building programs for internal and external stakeholders to better understand and integrate sustainability in business as usual. Standard Operating Procedures ('SOPs') and digital tools are being evaluated to standardize sustainability reporting methodologies and ease the process of data gathering and reporting. Training programs are being developed in parallel for department heads to understand global trends in sustainability and to be able to efficiently integrate the topic in their functional responsibilities on a day-today basis.

Social Initiatives - Diversity, Equity, and Inclusion ("DE&I")

Diversity, Equity, and Inclusion (DE&I) remain central to Mahindra Finance's vision of fostering a workplace that values and empowers every individual. In FY2025, focused efforts were made to address gender gaps, promote equity, and embed inclusive practices across the organization, with a commitment to continued progress in the years ahead.

¦ Empowering Women:

Initiatives like Prarambh provided specialized training to women from Tier III and Tier IV cities, resulting in over 150 hires in frontline roles. The SOAR Program enabled women professionals to return to impactful roles after career breaks with support enabled through carefully crafted mechanisms. Focused recruitment drives across

50+ locations introduced diverse talent into key positions across branches.

¦    Progressive Policies:

Policies such as maternity transition support, IVF reimbursement, menstrual wellness, caregiving assistance, and gig working opportunities were enhanced to create equitable opportunities and address the evolving needs of the workforce.

¦    Fostering inclusion:

Inclusion-focused programs like MWoW (Mahindra Finance World of Women) established 7 regional ERGs to address hyper-local challenges and create platforms for growth and engagement. Initiatives like Perspective Building, Spectrum'24 - Inclusion Week, which engaged over 5,000 employees, and sensitization workshops such as Beat the Bias, Leading as an Ally, drove awareness and allyship across teams.

¦    Recognition and Future focus:

Mahindra Finance was awarded the Mahindra Group Rise Award for its DE&I efforts. Participation in forums and thought leadership platforms reinforced the organization's commitment to driving systemic change and fostering inclusive growth.

Looking ahead, DE&I will continue to be a key focus area, with plans to scale initiatives, deepen impact, and build a workplace that reflects Mahindra Finance's purpose-driven approach to empowering lives and communities.

Stakeholder Engagement

A stakeholder engagement program has been defined and disclosed in the previous Integrated Reports. During FY2025, the stakeholder engagement program focused on two stakeholder groups namely, local communities and customer interface teams.

Mahindra Finance understands the importance of effectively managing the customers and provide a seamless experience. To address this the Company has undertaken strong steps in call centre management, which is now available 365 days (except national holidays) and serves 10 different languages. Your Company has also undertaken skill upgradation training programs for customer facing staffs to help address queries seamlessly. A dedicated centralised resolution team has also been created to provide bureau related concerns with less turnaround time. Through these initiatives, your Company aims to increase the customer satisfaction index and address customer queries in a shorter period of time.

Business Responsibility and Sustainability Report

Your Company continued to uphold a high standard of regulatory compliance and transparency through disclosure of sustainability initiatives in the public domain. In compliance with Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has disclosed its Business Responsibility and Sustainability Report ("BRSR”) for the previous two financial years as part of its Integrated Report ("IR”). Your Company has increasingly disclosed data on 'leadership indicators' in BRSR over the last three years and is currently reporting on all leadership parameters defined in the nine principles of 'BRSR Section C Principle Wise Performance Disclosure.'

Your Company subscribes to the Dow Jones Sustainability Index ("DJSI”) program where it has achieved a score of '50' in FY2024 that is best-in-class when compared to other listed NBFCs in India.

Governance

Your Company's sustainability team has foflowed two environmental and social (E&S) scorecard methodologies in FY2025 - risk management and outcome-based performance matrices. The E&S risk management scorecard has been integrated into the Internal Capacity Adequacy Assessment Process (ICAAP) with modules related to ESG policy, sustainability roadmap, exclusion list principles, carbon reduction, energy transition, climate transition risk management and audit scope parameters. Additionally, a business scorecard is developed for the sustainability team that focuses on scope emission reduction targets, supply chain engagement and Mahindra Group collaboration. The score from the above processes is also integrated into the CXO compensation matrix for the financial year to ensure senior management oversight on sustainability issues.

Your Company engages with the larger Mahindra Group resources through a quarterly 'Sustainability Council' where challenges and opportunities across the group are discussed and commonalities are jointly addressed. The Sustainability Council also provides an opportunity for cross-training of sustainability personnel and sharing of case studies. An independent agency within Mahindra Group - Mahindra Institute of Quality (MIQ), independently reviews the performance of Mahindra Finance sustainability policies and procedures.

Integrated Reporting

Your Company is pleased to present its holistic performance for FY2025, in the Integrated Report of the Company. This report includes details such as

the organisation's strategy, governance framework, performance and prospects of value creation based on the six capitals- Financial, Manufactured, Intellectual, Human, Social & Relationship and Natural capital.

Corporate Social Responsibility (CSR)

Established in 1991, Mahindra Finance, a leading NBFC is a proud partner of India's growth, taking financial services to the farthest corners of the country. We are continually adapting to the evolving needs of our customers, leveraging technology and our strategic partnerships to widen the ambit of and access to financial services while remaining committed to our social responsibility. Led by our #TogetherWeRise ethos, we build abiding relationships of trust with our communities and strives to become an asset in the communities where we operate. Your Company's Corporate Social Responsibility (CSR) initiatives focus on areas, namely Education & Livelihood, Healthcare and Environment. We believe in providing opportunities to the underprivileged communities to enable them to rise by designing the areas of interventions that are aligned with the Company's purpose to drive positive change in the lives of our communities. Together, we are paving the way for a brighter tomorrow for all.

1. CSR Committee

Your Company has duly constituted a CSR Committee in accordance with Section 135 of the Companies Act, 2013 to assist the Board and the Company in fulfilling the corporate social responsibility objectives of the Company. The Committee presently comprises of the following Directors as on 31^st March 2025:

Name	Category
Mr. Diwakar Gupta (Chairperson)*	Independent Director
Mr. Vijay Kumar Sharma**	Independent Director
Mr. Raul Rebello***	Managing Director & CEO

* Mr. Dhananjay Mungale ceased to be member and the Chairperson of the CSR Committee with effect from 23^rd July 2024. Mr. Diwakar Gupta was appointed as the member and the Chairperson of the Committee with effect from 24^th July 2024.

** Mrs. Rama Bijapurkar ceased to be member of the CSR Committee with effect from 23^rd July 2024. Mr. Vijay Kumar Sharma was appointed as the member of the Committee with effect from 24^th July 2024.

*** Mr. Ramesh Iyer ceased to be member of the Committee upon superannuation with effect from 29^th April 2024. Mr. Raul Rebello was inducted as the member of the Committee with effect from 30^th April 2024.

• During the year under review, 3 CSR Committee Meetings were heLd, details of which are provided in the Corporate Governance Report. The CSR Committee inter-aLia, reviews and monitors the CSR as weLL as BRSR activities. During the year under review, the terms of reference of CSR Committee were enhanced to specificaLLy include enhanced review of Environment, Social and Governance aspects ("ESG”).

2.    CSR Policy

The CSR PoLicy outLines the approach and guidance provided by the Board, basis recommendation of CSR Committee, for undertaking CSR Projects and Lays down the guiding principles for seLecting, implementing and monitoring CSR projects incLuding AnnuaL Action PLan. The PoLicy outLines CSR thrust areas, which aLign with the Mahindra group core purpose of driving positive change in the Lives of the communities. Company endeavors to create sociaL, economic and environmentaL change by investing in projects that promotes education, skiLL training, heaLth care, sanitation, environmentaL sustainabiLity, financiaL Literacy etc.

The CSR PoLicy incLuding a brief overview of the projects or programs undertaken by the Company can be accessed the same on the website of the Company at:

https: // www.mahindrafinance.com/ investor-reLations/poLicy-and-sharehoLder-information#mmfsL-poLicies

3.    CSR Initiatives

Key CSR Achievements for FY2025

(i) 'Dhan Samvaad'- CSR Flagship Program

Your Company has Launched CSR flagship program "Dhan Samvaad” which addresses a criticaL need among gig workers and nano, micro-enterprises, who often Lack access to formaL financiaL education and digitaL tooLs. By bridging this knowLedge gap, the initiative aims to foster financiaL incLusion and enhance the economic resiLience of this vitaL segment of the workforce.

The comprehensive program covers a wide range of topics, incLuding banking basics, savings strategies, e-waLLet usage, investment fundamentaLs, insurance principLes, and key government schemes. Through a combination of interactive workshops, onLine moduLes, and hands-on training, participants gained practicaL skiLLs to manage their finances effectiveLy in the digitaL era.

The program aLso focused on raising awareness as weLL as increased Linkages about reLevant centraL and state LeveL government schemes for amongst targeted beneficiaries whiLe providing information and hands-on support for using digitaL tooLs Like Digi Locker.

Dhan Samvaad is a significant effort to empower individuaLs and smaLL businesses with the financiaL knowLedge necessary for sustainabLe deveLopment. This program pLayed a cruciaL roLe in creating a more financiaLLy savvy and digitaLLy empowered community, uLtimateLy contributing to India's economic progress. Resources used during the program are aLigned with the Reserve Bank of India (RBI)'s FinanciaL IncLusion and DeveLopment program.

Major highLights of the Dhan Samvaad program incLudes,

¦    TotaL outreach - 2,07,700+ beneficiaries educated on financiaL and digitaL Literacy, boosting their digitaL and financiaL skiLLs

¦    77,800+ of the totaL outreach (37%) are Women Entrepreneurs: EnabLing Women Entrepreneurs

¦    1,57,000+ (76%) individuaLs enhanced digitaL identity by adopting the Digi Locker app.

¦    1,37,000+ (66%) individuaLs were Linked with different Government sociaL security schemes nameLy PMSBY, PMJJBY, E- Shram Card, Sukanya Samriddhi Yojna, Udyam Registration, AtaL Pension Yojana etc.

¦    Covered 40+ Districts, 7 States reaching diverse communities.

(ii) Saksham Scholarship Project

Saksham SchoLarship for underpriviLeged students is an initiative to provide financiaL assistance to underpriviLeged chiLdren to support them in continuing their education.

The project beLieves in empowering the academic and career goaLs of chiLdren by removing the financiaL barrier. The schoLarship is open for students from muLtipLe states across India. Students studying in CLasses 1 to 12, graduation, and post-graduation LeveLs are eLigibLe. In FY2025, your Company provided Saksham SchoLarship to around 2,960+ schoLars.

(iii)    E/Auto Rickshaw driving training for women

Your Company continued E/Auto Rickshaw driving training for women. Under this project, eLigibLe women were supported with skiLL training to drive an auto/ E auto/ UtiLity vehicLe and heLp them obtain LiveLihood opportunities. ALong with the vehicLe driving skiLLs, women were supported to obtain driving Licenses. SeLf-defence skiLLs, interpersonaL skiLLs and financiaL and digitaL skiLLs were aLso imparted as part of this project. Further women were encouraged to take to the jobs as chauffeurs and seLf-empLoyment.

In FY2025, your Company trained 550+ women through this project from Madhya Pradesh, TamiL Nadu and Puducherry. These women received permanent driving License aLong with LeveL 4 SkiLL India Certificate and pLacement Linkages.

(iv)    Employability skills training project

This project creates a cadre of workforce with essentiaL empLoyabiLity skiLLs incLuding domain knowLedge and soft skiLLs. Provided skiLL training to youth for BCBF (Business Correspondent & Business FaciLitator) and iTES-BPO (Information TechnoLogy EnabLed Services) and make them job ready and resiLient for the future and improve their LiveLihood.

In FY2025, your Company provided empLoyabiLity skiLLs training to 210+ candidates in Mumbai, Maharashtra aLong with pLacement Linkages to 170+ candidates.

(v)    Nanhi Kali

Project Nanhi KaLi provides skiLLs training to girLs studying in Grades 6 to 10 thereby heLping them to make a smoother transition from schooL to the workpLace.

The program focuses on honing essentiaL skiLLs, encompassing financiaL Literacy, digitaL skiLLs, soft skiLLs such as criticaL thinking and communication, and fostering an understanding of gender reLations. This wiLL be deLivered during schooL hours.

It aLso focuses on physicaL education moduLes wherein a professionaLLy designed sports education moduLe excLusiveLy for girLs gives them an opportunity to participate in reguLar fitness activities thereby promoting their weLLbeing. The program further heLps buiLd Leadership skiLLs and teamwork whiLe striving for exceLLence through sports.

Your Company supported the education of 14,630 Nanhi KaLis from Secondary schooL (CLass 6 to 10)

for the academic year 2024-25 across 12 districts from 5 states in India.

(vi)    Mahindra Pride Classroom (MPC)

Your Company continued its support to Mahindra Pride CLassroom (MPC) project to reach out to marginaLised women to create job opportunities in various sectors and enabLe women to become financiaLLy independent and participate activeLy in the workforce.

Under this program, we conducted minimum 40 hours training for 47,800+ finaL year femaLe students in cLassrooms across government/ government aided coLLeges, poLytechnics, industriaL training institutions, empLoyer premises etc. to enhance their empLoyabiLity prospects. The moduLar MPC training program focusses on Life, Language and aptitude skiLLs. To faciLitate students who have been trained in the MPC are pLaced with organizations working in their core trade/ domain an innovative, tech-enabLed job drive, known as 'Job Utsav' is conducted to bring together the best empLoyers and a great taLent pooL trained under the MPC program.

(vii)    Mahindra Pride Skill centers (MPSC)

You Company continued its support to MPSC which are specificaLLy designed to economicaLLy empower women through training in domain and empLoyabiLity skiLLs. The major trades covered are ITES, retaiL, hospitaLity, BFSI and other sectors. By addressing the unique requirements of the job market and emphasizing the deveLopment of both technicaL and soft skiLLs, the modeL aims to equip women with the knowLedge, skiLLs and confidence needed to succeed in their careers. As part of this initiative, 1,000 women were trained under IT / ITES, retaiL, coding, hospitaLity, TaLLy, IT & GST and 80% of the trained women supported in securing a gainfuL empLoyment.

(viii)    Project Hariyali

With an aim of sustainabLe environment, your Company promoted pLantation of trees which provides green cover as weLL source of LiveLihood to farmers/LocaL communities.

In FY2025, your Company pLanted 77,000 sampLings on around 570 farmer's Land from 30 viLLages in two districts in Gujarat. The pLantation incLudes a mix of native and fast-growing species Like Teak, Mahagony, Bamboo, Drumstick, AonaLa, Mango, Neem etc. which enhance carbon sequestration and improve LocaL biodiversity.

Additionally, it provides income sources for small and marginal, farmers through sustainable forestry. Further it engages communities in environmental stewardship and raises awareness about climate change.

Also, your Company supported the maintenance (nurturing and caring) and survival, of previously planted saplings in the Financial Year 2023-24 and 2022-23 as part of Project Hariyali in the Araku region, Andhra Pradesh.

(ix)    Water Conservation Project

As part of Environmental Sustainability, your Company has been championing the water conservation cause over 3 years in the remote tribal areas of Murbad and Shahapur blocks in Thane district, Maharashtra. Through these consistent efforts, over 8.7 crore litres of water have been conserved, ensuring access to water for household and agriculture purpose, enabling farmers to take multiple crops.

In FY2025, your Company made Investment in sustainable water resource management projects such as construction of 11 Rainwater Harvesting Structures in zilla parishad schools conserving over 0.46 crore Liters of water. Built/repaired 3 check dams and desilting of a Lake, creating potential to save over 2.45 crore liters of water in the surrounding areas. Through this project, we expect to consere 2.91 crore litres of rainwater for irrigation, ensuring water accessibility round the year for household and farming purpose, thus enabling farmers to take up 2-3 crops in a year and supporting 2,800 beneficiaries.

(x)    Project Sehat

In the area of healthcare, your Company organized nationwide blood donation drives in which 4,279+ Blood Units were collected, Pan India. Your Company also conducted 2 health camps, benefiting 300 individuals.

Employees Volunteering

Your Company has consistently fostered a culture of social responsibility by encouraging employees to actively participate in diverse CSR initiatives, driving meaningful change within the community. During the reporting period, over 23,250 employees—an impressive 91% of the workforce—dedicated more than 1,10,600 person-hours to numerous impactful virtual and physical CSR initiatives. These initiatives included life-saving Blood Donation drives, transformative Swachh Bharat campaigns, and empowering programs like Samantar, Sehat, and Gyandeep. Through these efforts, your

company has reaffirmed its unwavering commitment to creating a positive and lasting impact on society.

Stakeholder Engagement - In FY2025, your company organized the "Partner Meet” on 11^th February 2025, bringing together 28 representatives from 15 implementation partners for a day dedicated to collaboration, networking, and knowledge sharing. This impactful stakeholder engagement provided an invaluable opportunity to strengthen partnerships, interact with senior management, and exchange best practices among diverse implementation partners, fostering collective growth and innovation.

During the event, your Company celebrated excellence by honoring four of its partners (NGOs) with the prestigious title of "Best CSR Implementation Partners 2025,” while extending tokens of appreciation to the remaining partners, acknowledging their remarkable contributions. Furthermore, the meet featured a capacity-building workshop on "Appreciative Inquiry -A Tool for Personal and Organizational Effectiveness,” equipping attendees with transformative strategies to enhance their impact. This initiative underscores your company's unwavering commitment to driving meaningful collaboration and empowering its partners to achieve greater success in CSR implementation.

4.    CSR Spend

As per the provisions of Section 135 of the Companies Act, 2013 ("the Act”) read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules”), the mandatory CSR spend of the Company for FY2025 was ' 34.58 Crore against which your Company has spent ' 34.61 Crore during the year. Your Company has fully spent unspent CSR amount of FY 2024 towards ongoing program on Financial & Digital Literacy Project., details whereby are given in "Annexure I" of this report.

Further, in terms of the CSR Rules, the Chief Financial Officer of the Company has certified that the funds disbursed have utilised for the purpose and in the manner approved by the Board for FY2025.

5.    Annual Report on CSR Activities

The Annual Report on the CSR activities undertaken by your Company during the year under review, as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is set out in "Annexure I" of this Report.

6.    Impact Assessment of CSR Projects

In compliance with the provisions of Section 135 of the Companies Act 2013 read with sub-rule (3) of rule 8 of the Companies (Corporate Social Responsibility

Policy) Rules, 2014, impact assessment has been carried out for the following eligible projects:

CSR projects pertaining to FY2022 requiring Impact Assessment

¦    Nanhi Kali

¦    Mahindra Pride School & Classrooms

¦    Women economic empowerment

CSR projects pertaining to FY2023 requiring Impact Assessment

¦    Swabhimaan

Your Company had engaged independent agencies to carry out the impact assessment for the aforesaid projects. The Executive Summary of the Impact Assessment Reports, with respect to the abovementioned eligible CSR projects of FY2022 and FY2023, is annexed with "Annexure I" of this Report and the complete Impact Assessment Report of the applicable projects can be accessed at the web-link https://www.mahindrafinance.com/ together-we-rise#csr-reports.

Additionally, your Company has been proactively conducting an impact assessments of the selected CSR projects on a voluntary basis to evaluate the effectiveness. As a testament to its commitment to exemplary corporate governance, the Company also undertakes voluntary financial audits to ensure transparency and accountability.

The executive summary and web-links of impact assessment reports with respect to Company's CSR projects undertaken in FY2024 which meet the prescribed criteria, will be provided once the same are completed.

Cyber Security

Your Company has made significant strides in bolstering organization's cybersecurity framework to safeguard both internal and customer data. In an era where digital threats are increasingly sophisticated, we have prioritized the implementation of robust measures to ensure the integrity, confidentiality, and availability of critical information assets.

To enhance your organization's defence, we have deployed a suite of advanced cybersecurity tools tailored to address current and evolving risks. These include systems to prevent unauthorized data exfiltration, comprehensive threat detection and response mechanisms, real-time monitoring and analysis solutions, protective measures for our online assets, and solutions to secure our mobile endpoints. These tools collectively form a multi-layered shield around our digital infrastructure and processes.

In addition, your Company has established a 24/7 Security Operations Centre (SOC) dedicated to monitoring cybersecurity alerts and responding to incidents immediately to initiate remedial measures.

This ensures that potential threats are identified and mitigated swiftly, minimizing any risk to our operations or data.

Your Company has also significantly improved, organization's vulnerability management process by automating scanning and remediation efforts. By leveraging industry-leading scanning and patching tools, we have streamlined the identification and resolution of vulnerabilities, thereby enhancing our overall security posture.

To validate the effectiveness of these investments, management is also conducting Red Team assessment by an external certified entity. These proactive assessments test your organization's cyber defences under real-world conditions, ensuring that the tools and processes we have implemented deliver the expected resilience and protection.

These enhancements reflect our unwavering commitment to safeguarding the trust placed in us by our customers, partners, and you, our shareholders.

Annual Return

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with rule 11 and 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return in Form No. MGT-7, is available on the Company's website and can be accessed at the web-link https://www.mahindrafinance.com/investor-relations/financial-information#annual-reports .

Board & Its Committees Board

Your Company recognises and embraces the importance of a diverse Board in its success. The confluence of Directors on the Board with different knowledge and skills, perspective, regional and industry experience, cultural and geographical background ensures that your Company retains its competitive advantage.

As on 31^st March 2025, the Board of your Company consisted of 8 Directors comprising of a Non-Executive Chairperson, 1 Executive Director, 2 Non-Executive NonIndependent Directors and 4 Independent Directors, of whom 1 is a woman Director.

Committees constituted by the Board of Directors

The Board Committees are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

 

The details of the Board Committees aLong with their composition, powers, terms of reference, etc. are given in the Report on Corporate Governance, which forms part of this Annual Report.

Audit Committee

As on 31^st March 2025, the Audit Committee comprised of 3 Independent Directors and 1 Non-Executive NonIndependent Director:

Name	Category
Mr. Diwakar Gupta	Chairperson of the Committee (Independent Director)
Mr. MiLind Sarwate	Independent Director
Mr. Vijay Kumar Sharma	Independent Director
Mr. Amarjyoti Barua	Non-Executive Non- Independent Director

Changes in Audit Committee Members during FY2025:

¦    Mr. Dhananjay MungaLe, Mrs. Rama Bijapurkar ceased to be Member of the Committee effective 23^rd July 2024 and Mr. Chandrashekhar Bhave ceased to be Chairperson and Member(s) of the Committee effective 2^nd February 2025; upon completion of their 2^nd term as Independent Director(s) of the Company.

¦    Mr. Diwakar Gupta was appointed as Chairperson of the Committee w.e.f 3^rd February 2025.

The composition of Audit Committee is in compliance with the minimum requirement prescribed under the Act, Securities and Exchange board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended and the Master Direction - Reserve Bank of India (Non-Banking FinanciaL Company - ScaLe Based Regulation) Directions, 2023 of having a minimum of two-thirds of independent directors, incLuding the Chairperson. ALL members of the Committee are nonexecutive directors possessing financiaL Literacy, and expertise in accounting or financiaL management reLated matters.

During the year under review, 11 Audit Committee Meetings were heLd. Further, the terms of reference of the Audit Committee were enhanced during the year under review to specificaLLy incLude review of compLiances under RBI directions/ circuLars/ guideLines, review of POSH Report and its poLicy, information security audit/ poLicy etc. ALL the recommendations of the Audit Committee were approved and accepted by the Board during the year under review.

Meetings and Postal Ballot

The Board of Directors met 9 times during the year under review i.e., on 23^rd April 2024, 4^th May 2024, 7^th June 2024, 23^rd JuLy 2024, 13^th September 2024,

22^nd October 2024, 28^th January 2025, 13^th February 2025 and 24^th March 2025, as against the statutory requirement of at Least four meetings. The requisite quorum was present at aLL the Board Meetings. The maximum time gap between any two Meetings was not more than one hundred and twenty days. These Meetings were weLL attended. The 34^th AGM of the Company was heLd on 23^rd JuLy 2024 through Video Conference.

During the year under review, no Extraordinary GeneraL Meeting ("EGM") of the Members was heLd and no resoLution was passed by the Members through PostaL BaLLot.

DetaiLed information on the Meetings of the Board, its Committees, and the AGM is incLuded in the Report on Corporate Governance, which forms part of this AnnuaL Report.

A caLendar of aLL the meetings is prepared and circuLated weLL in advance to the Directors.

Meetings of Independent Directors

The Independent Directors met twice during the year under review, on 24^th September 2024 and 24^th March 2025. The Meetings were conducted without presence of the WhoLe-time Director(s), the NonExecutive Non-Independent Directors, Chief FinanciaL Officer or any other Management PersonneL to enabLe the Independent Directors to discuss matters pertaining to, inter-aLia, review of performance of NonIndependent Directors and the Board as a whoLe, review the performance of the Chairperson of the Company, assess the quaLity, quantity and timeLiness of flow of information between the Company Management & the Board and its Committees and free flow discussion on any matter that is necessary for the Board to effectiveLy and reasonabLy perform their duties.

Directors and Key Managerial Personnel

Appointment/Re-appointment of Directors during FY2025 and up to the date of this report

¦ Re-appointment of Mr. Milind Sarwate (DIN: 00109854) as an Independent Director

Basis approvaL /recommendation of the Nomination and Remuneration Committee ("NRC") and the Board, the members of the Company have at the AnnuaL GeneraL Meeting heLd on 28^th JuLy 2023, approved the re-appointment of MiLind Sarwate (DIN: 00109854) as Independent Director of the Company for a second term of five consecutive years each, commencing from 1^st April 2024 to 31^st March 2029 (both days incLusive) not LiabLe to retire by rotation.

¦    Appointment of Mr. Raul Rebello (DIN: 10052487) as the Managing Director & CEO

Basis recommendation/ approvaL of NRC and the Board of Directors, the Members of the Company had approved appointment of Mr. RauL RebeLLo (DIN: 10052487), as the WhoLe-time Director and KMP designated as Executive Director and MD & CEO-designate with effect from 1^st May 2023 to 29^th ApriL 2024 (both days incLusive) and as the Managing Director & CEO of your Company with effect from 30^th ApriL 2024 up to 30^th April 2028 (both days incLusive), LiabLe to retire by rotation.

Mr. RauL RebeLLo assumed the position of "Managing Director & CEO" of the Company w.e.f., 30^th April 2024, after superannuation of Mr. Ramesh Iyer, Vice-Chairman and Managing Director of the Company effective cLose of business hours of 29^th ApriL 2024.

¦    Appointment of Mr. Vijay Kumar Sharma (DIN: 02449088) as an Independent Director

Pursuant to the recommendation of the NRC and basis approvaL of the Board of Directors of the Company, the members of the Company have at the AnnuaL GeneraL Meeting heLd on 23^rd JuLy 2024, approved appointment of Mr. Vijay Kumar Sharma (DIN: 02449088) as an Independent Director for a term of 5 consecutive years with effect from 15^th May 2024 to 14^th May 2029 (both days incLusive), not LiabLe to retire by rotation.

Cessation of Directors

¦    Upon attaining superannuation, Mr. Ramesh Iyer (DIN: 00220759) ceased to be the Vice-Chairman & Managing Director of your Company effective cLose of business hours of 29^th ApriL 2024.

¦    Mr. Dhananjay MungaLe, (DIN: 00007563) and Mrs. Rama Bijapurkar (DIN: 00001835) ceased to be Independent Director(s) of your Company effective cLose of business hours of 23^rd JuLy

2024,    upon compLetion of their second term of 5 consecutive years each as Independent Director(s) of the Company.

¦    Mr. Chandrashekhar Bhave (DIN: 00059856) ceased to be the Independent Director of your Company effective cLose of business hours of 2^nd February

2025,    upon compLetion of his second term of 5 consecutive years each as an Independent Director of the Company.

The Board of Directors pLaces on record its deepest appreciation for the exempLary contribution, strategic foresight, innovative thinking, and steadfast commitment to exceLLence of Mr. Ramesh Iyer, which

propeLLed Mahindra Finance to great heights. The Board is confident that the Company wiLL continue its growth trajectory under the abLe Leadership of Mr. RauL RebeLLo, Managing Director & CEO.

The Board aLso pLaces on record its sincere appreciation to the vaLuabLe contribution made by Mr. Dhananjay MungaLe, Mrs. Rama Bijapurkar and Mr. Chandrashekhar Bhave during their association as Independent Directors.

During the year under review, no Independent Director of your Company resigned from the Company.

Retirement by Rotation

In terms of provisions of Section 152 of the Companies Act, 2013, Mr. Ashwani Ghai (DIN: 09733798), NonExecutive Non-Independent Director is LiabLe to retire by rotation and, being eLigibLe, has offered himseLf for re-appointment at the 35^th AnnuaL GeneraL Meeting of the Company scheduLed to be heLd on 22^nd JuLy 2025.

Re-appointment of Independent Directors

The first term of Dr. Rebecca Nugent (DIN: 09033085) as an Independent Director of the Company wiLL expire on 4^th March 2026. She is eLigibLe and has consented for re-appointment as an Independent Director for a second term of 5 consecutive years. Dr. Nugent has undertaken the onLine proficiency seLf-assessment test.

Basis the performance evaLuation report, skiLL sets, experience and substantiaL contribution made by Dr. Nugent during her 1^st term, the Board is of the opinion that Dr. Nugent hoLds high standards of integrity, expertise and experience (incLuding the proficiency). Basis recommendation of NRC, the Board of Directors have subject to approvaL of the members of the Company re-appointed Dr. Rebecca Nugent (DIN: 09033085), as an Independent Director of the Company for a second term of 5 consecutive years, w.e.f. 5^th March 2026 to 4^th March 2031 (both days incLusive), not LiabLe to retire by rotation. The necessary resoLution seeking approvaL of the members of the Company has been incorporated in the Notice of the 35^th AnnuaL GeneraL Meeting.

Fit and Proper and Non-Disqualification declaration by Directors

ALL the Directors of the Company have provided annuaL confirmation that they satisfy the "fit and proper" criteria as prescribed under Chapter XI of RBI Master Direction No. RBI/DoR/2023-24/106 DoR. FIN.REC. No.45/03.10.119/2023-24 dated 19^th October 2023, as amended, and that they are not disquaLified from being appointed/continuing as Directors in terms of Section 164 (1) and (2) of the Companies Act, 2013.

Declaration by Independent Directors

ALL the Independent Directors of your Company have given their declarations and confirmation that they fulfil the criteria of Independence as prescribed under Section 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their abiLity to discharge their duties with an objective independent judgment and without any external influence.

Further, the Board after taking these declarations/ disclosures on record and acknowledging the veracity of the same, concluded that the Independent Directors hold highest standards of integrity and possess the relevant proficiency, expertise and experience to quaLify and continue as Independent Directors of the Company and are Independent of the Management of the Company.

In terms of Section 150 of the Companies Act, 2013 read with RuLe 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by Indian Institute of Corporate Affairs, Manesar ('IICA') and the said registration is renewed and active as on the date of this report. Further, the said registration wiLL be renewed, before expiry as appLicabLe, and kept active by the Independent Directors.

The Independent Directors of the Company are either exempted from the requirement to undertake the onLine proficiency seLf-assessment test conducted by IICA or have cLeared the onLine proficiency seLf-assessment test as appLicabLe.

Key Managerial Personnel

The foLLowing persons were designated as the Key ManageriaL PersonneL ("KMP”) of your 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, as on 31^st March 2025:

1.    Mr. RauL RebeLLo, Managing Director & CEO

2.    Mr. Pradeep Kumar AgrawaL, Chief FinanciaL Officer

3.    Ms. BrijbaLa BatwaL, Company Secretary

Changes in Key Managerial Personnel

¦ Mr. Ramesh Iyer ceased to be the Vice-Chairman & Managing Director of your Company on attaining superannuation with effect from cLose of business hours of 29^th ApriL 2024.

 

Laws and that such systems were adequate and operating effectiveLy during the financiaL year ended 31^st March 2025;

Performance Evaluation of the Board

The Companies Act, 2013 ("Act”) and the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations”) stipuLate the evaLuation of the performance of the Board, its Committees, IndividuaL Directors and the Chairperson.

Your Company has formuLated a process for performance evaLuation of the Independent Directors,

 

¦    Mr. RauL RebeLLo ceased to be the Executive Director and MD & CEO Designate with effect from 29^th ApriL 2024 and assumed the office of Managing Director & CEO with effect from 30^th ApriL 2024.

¦    Mr. Vivek Karve resigned from the office of Chief FinanciaL Officer and Key ManageriaL PersonneL ("KMP”) of the Company with effect from cLose of business hours of 31^st October 2024 to pursue personaL, sociaL and professionaL interest beyond fuLL time empLoyment.

¦    In compLiance with ReguLation 26A(2) of the Listing ReguLations, Mr. Animesh Chatterjee was appointed as the Chief FinanciaL and KMP, for interim period i.e. from 29^th January 2025 tiLL 4^th March 2025.

¦    Mr. Pradeep Kumar AgrawaL was appointed as the Chief FinanciaL Officer of the Company effective 5^th March 2025.

Directors' Responsibility Statement

Pursuant to the provisions of Section 134(5) of the

Companies Act, 2013, ("the Act”) your Directors, based

on the representations received from the Operating

Management and after due enquiry, confirm that:

i.    In the preparation of the annuaL accounts for financiaL year ended 31^st March 2025, the appLicabLe accounting standards have been foLLowed and there are no materiaL departures in adoption of these standards;

ii.    They had in consultation with the Statutory Auditors seLected such accounting poLicies and appLied them consistentLy and made judgments and estimates that are reasonabLe and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March 2025 and of the profit of the Company for the year;

iii.    They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irreguLarities;

iv.    They have prepared the annuaL accounts for financiaL year ended 31^st March 2025 on a going concern basis;

v.    They have Laid down adequate internaL financiaL controLs to be foLLowed by the Company and that such internaL financiaL controLs were operating effectiveLy during the financiaL year ended 31^st March 2025;

vi.    They have devised proper systems to ensure compLiance with provisions of aLL appLicabLe

the Board, its Committees and other IndividuaL Directors which incLudes criteria for performance evaLuation of the Non-Executive Directors and Executive Directors.

An annuaL performance evaLuation exercise was carried out in compLiance with the appLicabLe provisions of the Act, Listing ReguLations, the Company's Code of Independent Directors and the criteria and methodoLogy of performance evaLuation approved by the Nomination and Remuneration Committee ("NRC") comprising of Mr. Diwakar Gupta as the Chairperson and Dr. Anish Shah, Mr. MiLind Sarwate and Mr. Vijay Kumar Sharma as its members:

The questionnaires for performance evaluation are comprehensive and in alignment with the guidance note on Board evaluation issued by the SEBI, vide its circular no. SEBI/HO/CFD/CMD/CIR/P/2017/004 dated 5^th January 2017 as amended and merged with SEBI Master Circular dated November 11, 2024 and are in line with the criteria and methodology of performance evaluation approved by the NRC.

Outcome and results of the performance evaluation

All the Directors of your Company as on 31^st March 2025 participated in the evaluation process. The Directors expressed their satisfaction with the Evaluation process. During the year under review, NRC ascertained and reconfirmed that the deployment of "questionnaire” as a methodology, is effective for evaluation of performance of Board and Committees and Individual Directors.

The evaluation outcomes for the year under review were deliberated upon at length with the Board members, Committee Chairpersons and Individual Directors. The results underscore a good level of engagement and diligence by the Board and its various committees, and by the senior leadership.

It was noted that the Board and Committee meetings are meticulously planned and conducted with efficiency, in terms of comprehensive pre-reads being sent well in advance, and constructive participation and deliberations at the meeting led by the Chair. This enabled the Board and Committees to discharge their role effectively and focus on governance and internal controls.

During the year under review, the terms of reference of the Board and Committees were revisited with a view to aligning the same with regulatory expectations, and best group and industry practices, so as to bring renewed focus on review matters.

Board members were appreciative that during the year under review, the Board and its Committees performed their role well, particularly in the areas of financial discipline, strategic direction, compliances, succession planning and performance review. Based on the outcome of the evaluation of the year under review, the Board has agreed to deepen its focus on ESG, risk management and oversight of subsidiaries, with continued focus on maintaining high standards of performance and governance, to enhance the value for all its stakeholders.

Familiarisation Programme for Directors

Your Company has adopted a structured programme for orientation of all Directors including the Independent Directors so as to familiarise them with the Company-its operations, business, industry, environment in which it

functions, Indian and global macro-economic front and the regulatory regime applicable to it. The Management updates the Board Members on a continuing basis of any significant changes therein and provides them an insight to their expected roles and responsibilities so as to be in a position to take well-informed and timely decisions and contribute significantly to the Company. The Directors are provided with all the documents to enable them to have a better understanding of the Company, its operations and the industry in which it operates.

The Independent Directors of your 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. The terms of reference of all the Committees with updations, if any, are shared with all the Board Members on a quarterly basis. Independent Directors meet the business and functional heads and provide their inputs and suggestions on strategic and operational matters at the quarterly Board/Committee Meetings.

Managing Director and Senior Management provide an overview of the operations and familiarise the Directors on matters related to the Company's values and commitments. They are also introduced to the organisation structure, constitution of various committees, board procedures, risk management strategies etc.

Strategic Presentations are made to the Board where Directors get an opportunity to interact with Senior Management. Directors are also informed of the various developments in the Company through Press Releases, emails, etc. Your Company has a secured Board portal which inter-alia provides a one stop and seamless solution for access to Board/Committee materials to all the Directors. The Board portal also contains Annual Report, Code of Conduct for Directors, terms of appointment, committee charters etc. for ease of access. This enables greater transparency to the Board processes.

Pursuant to the provisions of the Companies Act, 2013 and Regulation 25(7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations”), your Company has during the year conducted familiarization programmes through briefings at Board/ Committee meetings for all its Directors including Independent Directors.

Details of familiarization programs imparted to the Independent Directors during the financial year under review in accordance with the requirements of the Listing Regulations are available on the Company's website and can be accessed at the web-link: https://

www.mahindrafinance.com/investor-relations/policy-and-shareholder-information#familiari7ation-program and is also provided in the Corporate Governance Report forming part of this Annual Report.

Policies on Appointment of Directors and Senior Management and Remuneration of Directors, Key Managerial Personnel and Employees:

i)    Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management

In accordance with the provisions of Section 134(3)(e) of the Companies Act, 2013 ("the Act”) read with Section 178 of the Act and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations”), your Company has adopted a Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management, which, inter-alia, includes the criteria for determining qualifications, positive attributes and independence of Directors, succession planning for Directors and Senior Management, and the Talent Management framework of the Company.

During the year under review, the Policy was amended to, inter-alia align with the amendments in the Listing Regulations.

The said policy is available on the website of the Company and can be accessed at https://www. mahindrafinance.com/investor-relations/policy-and-shareholder-information#mmfsl-policies .

ii)    Policy on Remuneration of Directors and Remuneration Policy for Key Managerial Personnel, Senior Management and other Employees of the Company

Your Company has also adopted the Policy on Remuneration of Directors and the Policy on Remuneration of Key Managerial Personnel, Senior Management and other Employees of the Company in accordance with the provisions of sub-section (4) of Section 178 of the Act, Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 and Listing Regulations.

During the year under review the Policy on Remuneration of Directors of the Company was amended to, inter-alia, align with existing legal provisions, introduce certain standard clauses for better articulation.

The Remuneration Policy for Key Managerial Personnel, Senior Management and other employees was amended during the year under review to inter-alia, align with the amendments in the Listing Regulations, and provide flexibility in compensation structuring.

The said Policies are uploaded on the website of the Company and can be accessed at: https://www. mahindrafinance.com/investor-relations/policy-and-shareholder-information#mmfsl-policies

Adequacy of Internal Financial Controls with Reference to the Financial Statements

Your Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations.

Your Company uses various industry standard systems to enable, empower and engender businesses and also to maintain its Books of Accounts. The transactional controls built into these systems ensure appropriate segregation of duties, the appropriate level of approval mechanisms and maintenance of supporting records. The systems, Standard Operating Procedures and controls are reviewed by the Management.

Your Company's Internal Financial Controls are deployed through Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organisations of the Treadway Commission ("COSO”), that addresses material risks in your Company's operations and financial reporting objectives. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting ("ICFR”) issued by The Institute of Chartered Accountants of India. The risk control matrices are reviewed on a quarterly basis and control measures are tested and documented on a quarterly basis. The Company has IT systems in place making the ICFR process completely digital and strengthening the review and monitoring mechanism. Based on the assessments carried out by the Management during the year, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.

Your Company recognises that Internal Financial Controls cannot provide absolute assurance of achieving financial, operational and compliance reporting objectives because of its inherent limitations. Also, projections of any evaluation of the Internal Financial Controls to future periods are subject to the risk that the Internal Financial Control may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures

may deteriorate. Accordingly reguLar audits and review processes ensure that such systems are reinforced on an ongoing basis.

Joint Statutory Auditor's certification on internal financial controls

The Joint Statutory Auditors of your Company viz. M/s. M M Nissim & Co LLP, Chartered Accountants and M/s. M.P. ChitaLe & Co., Chartered Accountants have examined the internal financial controls of the Company and have submitted an unmodified opinion on the adequacy and operating effectiveness of the internal financial controls over financial reporting as at 31^st March 2025.

Internal Audit Framework

Your Company has in place an adequate internal audit framework to monitor the efficacy of the internal controls with the objective of providing to the Audit Committee and the Board of Directors, an independent, objective and reasonabLe assurance on the adequacy and effectiveness of the Company's processes. The internal audit approach verifies compliance with the operational and system related procedures and controls. The Internal Auditor reports to the Audit Committee of the Board.

Separate meetings between the Head of Internal Audit and the Audit Committee

Separate meetings between the Head of Internal Audit and the Audit Committee, without the presence of Management, were enabled to facilitate free and frank discussion amongst them. The meetings were held on 23^rd April 2024, 24^th September 2024 and 22^nd October 2024.

Risk Based Internal Audit ("RBIA") framework

In compliance with RBI circular dated 3^rd February 2021, the Company has in place an effective Risk Based Internal Audit ("RBIA”) Framework to review the efficacy of internaL controLs, processes, poLicies and compliance with Laws and regulations, with the objective of providing an independent and reasonabLe assurance on the adequacy and effectiveness of the organisation's internaL controL and governance processes. The framework is commensurate with the nature of the business, size, scaLe and compLexity of its operations.

The Audit Committee has approved a Risk Based InternaL Audit ("RBIA”) framework, aLong with appropriate processes and pLans for internaL audit of FY2025 and FY2026. The Risk Based InternaL Audit PLan is aLso being reviewed by the Statutory Auditors, Senior Leadership, Chief Risk Officer, Chief CompLiance Officer before being approved by the Audit Committee. The internaL audit pLan is deveLoped based on the risk profiLe of the

audit universe incLuding business activities, functions, branches, appLication systems of the organisation. The RBIA pLan incLudes process audits, branch audits and Information TechnoLogy (IT) & Information Security (IS) audits. InternaL audits are undertaken on a periodic basis to independentLy vaLidate the existing controLs.

Based on the reports of internaL audit, function/process owners undertake corrective action in their respective areas. Significant audit observations are presented to the Audit Committee aLong with agreed management action pLan. The status of the management actions and impLementation of the recommendations are tracked for aLL the observations and are presented to the Audit Committee on a reguLar basis.

Risk Management

Risk management forms an integraL part of the Company's business. Your Company has a comprehensive Risk Management PoLicy in pLace and has Laid down a weLL-defined risk management framework to identify, assess and monitor risks and strengthen controLs to mitigate risks. Your Company has estabLished procedures to periodicaLLy pLace before the Risk Management Committee and the Board of Directors, the risk assessment and minimisation procedures being foLLowed by the Company and steps taken by it to mitigate these risks.

The Risk Management PoLicy, inter-aLia, incLudes identification of eLements of Credit, OperationaL & Enterprise risk, incLuding Cyber Security and reLated risks as weLL as those risks which in the opinion of the Board may threaten the existence of the Company.

The Risk Management Committee ("RMC”) constituted by the Board manages the integrated risk and reviews periodicaLLy the Risk Management PoLicy and strategy foLLowed by the Company.

The 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. Your Company has a robust organisationaL structure for managing and reporting on risks. This risk management mechanism works at aLL the LeveLs, which acts as the strategic defence cover of the Company's risk management and is supported by reguLar review, controL, seLf-assessments and monitoring of key risk indicators.

Operational Risk Management: Your Company has impLemented an OperationaL Risk Management (ORM) PoLicy to proactiveLy manage operationaL risks. The poLicy has impLemented invoLves assessing and measuring risks, monitoring them cLoseLy, and impLementing

mitigating measures through a structured governance framework. ALL new products, processes, and changes as weLL as new financiaL outsourcing arrangements undergo thorough risk evaLuation by the OperationaL Risk team. In terms of the Latest ReguLatory guidance note on OperationaL Risk Management and OperationaL ResiLience, your Company is in compLiance with aLL the appLicabLe key themes specified.

Credit Risk Management: Your Company has successfuLLy impLemented a robust credit risk management framework, risk assessment modeLs to ensure proactive identification, mitigation, and monitoring of potentiaL credit exposures. This strategic approach enhances Company's abiLity to manage risk whiLe optimizing overaLL portfoLio performance.

In compLiance with Master Direction - Reserve Bank of India (Non-Banking FinanciaL Company - ScaLe Based ReguLation) Directions, 2023, the Company has in pLace ICAAP PoLicy and Framework with the objective of ensuring avaiLabiLity of adequate capitaL to support aLL risks in business as aLso enabLe effective risk management system in the Company.

The Chief Risk Officer ("CRO”) oversees and strengthens the risk management function of the Company. The CRO is invited to the Board, Audit Committee, Asset LiabiLity Committee and Risk Management Committee Meetings. The CRO aLong with members of the Senior Management apprises the Risk Management Committee and the Board on the risk assessment, process of identifying and evaLuating risks, major risks as weLL as the movement within the risk grades, the root cause of risks and their impact, key performance indicators, risk management measures and the steps taken to mitigate these risks.

Auditors and Audit ReportsJoint Statutory Auditors and their Reports

Basis the recommendation of the Audit Committee and the Board of Directors, the members of the Company had at the 34^th AnnuaL GeneraL Meeting heLd on 23^rd JuLy 2024, approved appointment of M/s. M M Nissim & Co LLP, Chartered Accountants (ICAI Firm Registration Number: 107122W/W100672) and M/s. M.P. ChitaLe & Co., Chartered Accountants (ICAI Firm Registration Number: 101851W) as the Joint Statutory Auditors of your Company for a term of 3 consecutive years to hoLd office from concLusion of 34^th AGM up to the concLusion of 37^th AGM to be heLd in the year 2027. The Joint Statutory Auditors hoLd vaLid peer review certificate as prescribed under the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations”).

The joint Statutory Auditors have given a confirmation on their eLigibiLity and non-disquaLification.

The joint Statutory Auditors of the Company have issued unmodified Audit Reports on the StandaLone and ConsoLidated FinanciaL Statements for the financiaL year ended 31^st March 2025. The report does not contain any quaLification, reservation or adverse remark or discLaimer.

Adoption of Policy for appointment of Statutory Auditors

In compLiance with the Reserve Bank of India GuideLines dated 27^th ApriL 2021 ("RBI GuideLines”), your Company has in pLace a PoLicy for appointment of Statutory Auditors of the Company. The said PoLicy was amended by the Board of Directors to specificaLLy cover independence of auditors and annuaL review of performance of statutory auditors in compLiance with the RBI GuideLines.

Secretarial Auditor and Audit Report

M/s. KSR & Co, Company Secretaries LLP ("KSR”), the SecretariaL Auditor appointed in accordance with the provisions of Section 204 of the Companies Act, 2013 ("Act”) read with the RuLes framed thereunder. KSR has issued the SecretariaL Audit Report for FY2025 which is appended to this Report as "Annexure II". The SecretariaL Audit Report does not contain any quaLification, reservation or adverse remark or discLaimer. KSR was present at the Last AGM of the Company heLd on 23^rd JuLy 2024.

Appointment of Secretarial Auditor

In compLiance with ReguLation 24(A) of Listing ReguLations as amended vide SEBI notification dated 12^th December 2024 and basis the recommendation of Audit Committee, the Board has approved the appointment of M/s. Makarand M. Joshi & Co. Company Secretaries ("MMJC"), as the SecretariaL Auditor of the Company for first term of 5 consecutive years, to conduct Secretarial Audit and provide other allied certification/permitted services for FY2025-2026 up to FY2029- 2030, subject to approvaL of sharehoLders of the Company at the ensuing AGM.

Consequent to the above, M/s. KSR and Co, Company Secretaries LLP ("KSR”), the current SecretariaL Auditor, has ceased to be the SecretariaL Auditor of the Company from 22^nd ApriL 2025.

MMJC have consented for their appointment as the SecretariaL Auditor and have given a confirmation to the effect that they are eLigibLe to be appointed and are not disquaLified from acting as the SecretariaL Auditor.

Members are requested to consider and approve appointment of MMJC as the SecretariaL Auditor of your Company to conduct SecretariaL Audit and provide other aLLied certification/permitted services for FY 2025-2026 up to FY 2029-2030. Necessary

Particulars of Contracts or Arrangements with Related Parties

Your Company has in pLace a robust process for approvaL of ReLated Party Transactions and on DeaLing with ReLated Parties.

ALL contracts/arrangements/transactions entered into by the Company during the FinanciaL Year with reLated parties were in the ordinary course of business and on an arm's Length basis.

Omnibus approvaL of Audit Committee is obtained for ReLated Party Transactions which are of repetitive nature, which are reviewed on quarterLy basis by the Audit Committee as per ReguLation 23 of the Listing ReguLations and Section 177 of the Companies Act, 2013.

ALL ReLated Party Transactions and subsequent materiaL modifications, if any, were pLaced before the Audit Committee for review and approvaL. Necessary detaiLs for each of the ReLated Party Transactions as appLicabLe aLong with the justification are provided to the Audit Committee in terms of the Company's PoLicy on MateriaLity of and DeaLing with ReLated Party Transactions and as required under SEBI Master CircuLar SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024.

The MateriaL ReLated Party Transactions approved by the Members of the Company are aLso reviewed / monitored on quarterLy basis by the Audit Committee of the Company as per ReguLation 23 of the Listing ReguLations and Section 177 of the Companies Act, 2013.

The Company has not entered into MateriaL ReLated Party Transactions as per the provisions of the Companies Act, 2013 and a confirmation to this effect as required under Section 134(3)(h) of the Companies Act 2013 is given in form AOC-2 as "Annexure III", which forms part of this AnnuaL Report.

In accordance with the appLicabLe provisions of the Master Direction issued by the Reserve Bank of India and the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations”), the 'PoLicy on MateriaLity of and DeaLing with ReLated Party Transactions', is avaiLabLe on the Company's website: https://www.mahindrafinance.com/investor-reLations/ poLicy-and-sharehoLder-information#mmfsL-poLicies .

The transactions of the Company with any person/ entity beLonging to the promoter/promoter group which hoLds 10% or more sharehoLding in the Company as required pursuant to Para A of ScheduLe V of the Listing ReguLations is discLosed separateLy in the financiaL statements of the Company. Members of the Company had approved entering into MateriaL ReLated Party transaction with Mahindra & Mahindra Limited, (Promoter/ HoLding Company and a ReLated party) under ReguLation 23 of the Listing ReguLations. During

 

resolution seeking approval, of members for appointment of MMJC as the Secretarial Auditor has been incorporated in the Notice of 35^th Annual. General. Meeting.

Secretarial Audit of Material Subsidiary

There is no Material. UnListed Indian Subsidiary of the Company as on 31^st March 2025 and the requirement under Regulation 24(A) of the Listing Regulations regarding the Secretarial Audit of MateriaL UnListed Indian Subsidiary is not appLicabLe to the Company for the FinanciaL Year 2024-25.

Annual Secretarial Compliance Report with additional confirmations on compliances

In compLiance with ReguLation 24(A) of Listing ReguLations, your Company has undertaken an audit for FY2025 for aLL the appLicabLe compLiances as per Listing ReguLations, 2015 and CircuLars/ GuideLines issued thereunder.

The AnnuaL SecretariaL CompLiance Report ("ASCR”) issued by M/s. KSR & Co, Company Secretaries LLP, SecretariaL Auditor and a Peer Reviewed Firm, with confirmations with confirmations on compLiances by the Company with respect to Insider Trading ReguLations, ReLated Party Transactions, updation of PoLicies, discLosure of materiaL events to Stock Exchanges etc., has been fiLed with BSE and NSE in the prescribed format and the same can be accessed on the website of the Company at https://www.mahindrafinance. com/investor-reLations/reguLatory-fiLings#secretariaL-compHance-report

The Annual Secretarial Compliance Report does not contain any qualification, reservation or adverse remark.

Cost Records and Cost Audit

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148 of the Companies Act, 2013 are not appLicabLe in respect of the business activities carried out by your Company and hence such accounts and records were not required to be maintained by the Company.

Fraud Reporting

During the year under review, the Joint Statutory Auditors and the SecretariaL Auditor have not reported any instance of fraud committed in the Company by its officers or empLoyees, invoLving an amount of Less than ' 1 crore to the Audit Committee under section 143(12) of the Companies Act, 2013, the detaiLs of which need to be mentioned in this Report.

The Company is reinforcing its commitment to trust, integrity and transparency through enhanced measures for compLiance, risk management, and governance.

the year under review, the aggregate vaLue of the transactions entered with Mahindra & Mahindra Limited did not exceed the materiaLity threshoLd as prescribed under ReguLation 23 of the Listing ReguLations. The Company intends to enter into new MateriaL ReLated Party Transaction with Life Insurance Corporation of India for which the approvaL of Members is being sought. Further detaiLs on the transactions with reLated parties are provided in the accompanying financiaL statements.

Whistle Blower Policy/ Vigil Mechanism

Your Company promotes ethicaL behaviour in aLL its business activities and has estabLished a vigiL mechanism for its Directors, EmpLoyees, and StakehoLders associated with the Company to report their genuine concerns. The VigiL Mechanism as envisaged in the Companies Act, 2013 and the RuLes prescribed thereunder and the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 is impLemented through the WhistLe BLower PoLicy, to provide for adequate safeguards against victimization of persons who use such mechanism and make provision for direct access to the Chairperson of the Audit Committee.

As per the WhistLe BLower PoLicy impLemented by the Company, the EmpLoyees, Directors or any StakehoLders associated with the Company are free to report iLLegaL or unethicaL behaviour, actuaL or suspected fraud, or vioLation of the Company's Code(s) of Conduct or Corporate Governance PoLicies or any improper activity, through the channeLs provided beLow.

The WhistLe BLower PoLicy provides for protected discLosure and protection for the WhistLe BLower. Under the WhistLe BLower PoLicy, the confidentiaLity of those reporting vioLation(s) is protected and they are not subject to any discriminatory practices. The WhistLebLower can make a Protected DiscLosure by using any of the foLLowing channeLs for reporting:

1.    Independent third party Ethics HeLpLine Service PortaL: https://ethics.mahindra.com

2.    ToLL free No: 000 800 100 4175

3.    Chairperson of the Audit Committee

The WhistLe BLower PoLicy has been wideLy disseminated within the Company. The PoLicy is avaiLabLe on the website of the Company at the web-Link https://www. mahindrafinance.com/investor-reLations/poLicy-and-shareholder-information#mmfsl-polic.ies .

During the year, the Company received 9 whistLe bLower compLaints. ALL the cases were investigated and appropriate actions were taken, wherever necessary basis investigation reports.

The Audit Committee is apprised of the vigiL mechanism on a periodic basis. During the year, no person was denied access to the Chairperson of the Audit Committee. A

quarterLy report on the whistLe bLower compLaints is pLaced before the Audit Committee for its review.

Particulars of Employees and Related Disclosures

DetaiLs of empLoyees who were in receipt of remuneration of not Less than ' 1,02,00,000 during the year ended 31^st March 2025 or not less than ' 8,50,000 per month during any part of the year, as required under provisions of Section 197(12) of the Companies Act, 2013 read with RuLe 5(2) and 5(3) of Companies (Appointment and Remuneration of ManageriaL PersonneL) RuLes, 2014 wiLL be made avaiLabLe during 21 days before the AnnuaL GeneraL Meeting in eLectronic mode to any SharehoLder upon request sent at the EmaiL ID: companv.secretarv@ mahindrafinance.com.

DiscLosures with respect to the remuneration of Directors, Key ManageriaL PersonneL and EmpLoyees as required under Section 197(12) of the Companies Act, 2013 and RuLe 5(1) of Companies (Appointment and Remuneration of ManageriaL PersonneL) RuLes, 2014, is given in "Annexure IV"

Disclosure in respect of remuneration/ commission drawn by the Managing Director/ Whole-time Director from Holding or Subsidiary Company

Mr. Ramesh Iyer former Vice-Chairman & Managing Director (up to 29^th ApriL 2024) did not receive any remuneration or commission from HoLding/Subsidiaries of the Company during FY2025.

Mr. RauL RebeLLo, Managing Director & CEO effective 30^th ApriL 2024 (Mr. RauL RebeLLo served as Executive Director and MD & CEO Designate up to 29^th ApriL 2024) did not receive any remuneration or commission from HoLding/ Subsidiaries of the Company during FY2025.

Disclosure Under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act")

Your Company is an equaL opportunity empLoyer and is committed to ensuring that the work environment at aLL its Locations is conducive to fair, safe and harmonious reLations between empLoyees. It strongLy beLieves in uphoLding the dignity of aLL its empLoyees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictLy prohibited.

Your Company has in pLace a comprehensive PoLicy in accordance with the provisions of POSH Act and RuLes made thereunder.

ALL empLoyees (permanent, contractuaL, temporary and trainees) are covered under this PoLicy. The PoLicy has been wideLy communicated internaLLy and is pLaced on

the Company's intranet portal The Company has zero tolerance towards sexuaL harassment.

The POSH Policy is available on the website of the Company and can be accessed at the web-link: https:// www.mahindrafinance.com/investor-reLations/poLicy-and-sharehoLder-information#mmfsL-poLicies.

Your Company has complied with the provisions relating to the constitution of the Internal Complaints Committee ("ICC”) under the POSH Act to redress complaints received regarding sexuaL harassment.

To ensure that aLL the empLoyees are sensitized regarding issues of sexuaL harassment, the Company creates awareness by imparting necessary trainings.

The foLLowing is a summary of SexuaL Harassment compLaint(s) received and disposed of during the FY2025, pursuant to the POSH Act and RuLes framed thereunder:

a)    Number of compLaint(s) of SexuaL Harassment received during FY2025 - 3

b)    Number of compLaint(s) disposed of during FY2025 - 3

c)    Number of cases pending for more than 90 days (which is stipuLated timeLine for compLetion of an inquiry into a compLiant of sexuaL harassment under POSH Act) - NiL

d)    Number of cases pending as on 31^st March 2025 - NiL

Number of workshops/awareness programs on the subject carried out during the year under review were as under:

¦    An onLine e-Learning moduLe for empLoyees on Prevention of SexuaL Harassment covering topics on SexuaL Harassment, the process of fiLing compLaints, deaLing with sexuaL harassment, etc. is deveLoped for training. 99.5% of the empLoyees have compLeted this training.

¦    One Training program on ICC was conducted for aLL ICC members.

¦    One Training program on POSH sensitization was conducted for the HR team.

Disclosure of Maternity Benefit Compliance

Your Company is in compLiance of Maternity Benefit Act, 1961 for the year under review.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information in respect of conservation of energy, technoLogy absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with RuLe 8(3) of the Companies (Accounts) RuLes, 2014 is attached as 'Annexure V’ to the Board's Report.

Policies

The detaiLs of the Key PoLicies adopted by your Company and changes made therein, if any, during the year under review are mentioned at "Annexure VI" to the Board's Report.

Compliance with the Provisions of Secretarial Standard - 1 and Secretarial Standard - 2

The Directors have devised proper systems to ensure compLiance with the provisions of the SecretariaL Standards, i.e., SS-1 and SS-2, reLating to 'Meetings of the Board of Directors' and 'GeneraL Meetings', respectiveLy, issued by the Institute of Company Secretaries of India ("ICSI”) and such systems are adequate and operating effectiveLy

Voluntary adherence of Secretarial Standards to all Board Committees

Although, SS-1 compLiance is required onLy for Board and its Committees mandatoriLy required to be constituted under the Companies Act, 2013 ("the Act”), the Company adheres and compLies with most of the good practices enunciated in the said SecretariaL Standards for aLL its mandatory and non-mandatory Board LeveL Committees.

Your Company has duLy compLied with appLicabLe SS-1 and SS-2, during the year under review.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operations in future.

There were no significant and materiaL orders passed by the reguLators or courts or tribunaLs during the year impacting the going concern status of the Company and its future operations.

Disclosure pertaining to Insolvency & Bankruptcy Code

There were neither any appLications fiLed by or against the Company nor any proceedings were pending under the InsoLvency and Bankruptcy Code, 2016 ("IBC”) during the year under review.

Disclosure on One-Time Settlement

During the year, the Company has not made any onetime settLement for Loans taken from the Banks or FinanciaL Institutions and hence the detaiLs of difference between amount of the vaLuation done at the time of one-time settLement and the vaLuation done whiLe taking Loan from the Banks or FinanciaL Institutions aLong with the reasons thereof is not appLicabLe.

General Disclosures

The Directors further state that no discLosure or reporting is required in respect of the foLLowing items, as there were no transactions/events reLated to these items during the financiaL year under review:

¦    There was no issue of equity shares with differentiaL rights as to dividend, voting or otherwise;

¦    There was no issue of shares (incLuding sweat equity shares) to the empLoyees of the Company under any scheme, save and except EmpLoyee Stock Option schemes referred to in this Report;

¦    During the year under review, Board of Directors at its meeting heLd on 13^th February 2025 had approved raising of funds by way issue of equity shares on rights basis to the eLigibLe sharehoLders for an amount not exceeding ' 3000 Crore, subject to receipt of reguLatory/ necessary approvaLs, as may be required.

¦    There was no buy-back of the equity shares during the year under review;

¦    There were no voting rights which are not directLy exercised by the empLoyees in respect of equity shares for the subscription/ purchase for which Loan was given by the Company (as there is no scheme pursuant to which such persons can beneficiaLLy hoLd

shares as envisaged under Section 67(3)(c) of the Companies Act, 2013 ("the Act");

¦    There was no suspension of trading of securities of the Company on account of corporate action or otherwise;

¦    There was no revision made in FinanciaL Statements or the Board's Report of the Company;

¦    The Company being an NBFC, the provisions reLating to Chapter V of the Act, i.e., acceptance of deposit, are not appLicabLe. DiscLosures as per NBFC reguLations have been made in this AnnuaL Report.

Acknowledgments

The Board conveys its deep gratitude and appreciation to aLL the empLoyees of the Company for their tremendous efforts as weLL as their exempLary dedication and contribution to the Company's performance.

The Directors wouLd aLso Like to thank its sharehoLders, customers, vendors, business partners, bankers, government and aLL other business associates for their continued support to the Company and the Management.

---

Mar 31, 2025

Your Directors are pLeased to present their Thirty-Fifth Report together with the audited financial, statements of your Company for the FinanciaL Year ended 31^st March 2025 ("FY2025”).

Financial Summary and Operational Highlights

 

(' in crore)
Particulars	Consolidated		%	Standalone		%
	FY2025	FY2024	Change	FY2025	FY2024	Change
Total Income	18,530.46	15,970.32	16.03	16,074.69	13,562.42	18.52
Less: Finance Costs	8,415.43	6,959.20	Â	7,898.30	6,426.94	Â
Expenditure	6,832.14	6,204.20	Â	4,755.70	4,551.30	Â
Depreciation, Amortization and Impairment	321.21	274.85	Â	273.42	228.71	Â
Total Expenses	15,568.78	13,438.25	15.85	12.927.42	11,206.95	15.35
Profit before exceptional items and taxes	2,961.68	2,532.07	Â	3,147.27	2,355.47	Â
Share of profit of Associates & Joint Ventures	65.23	56.11	Â	-	Â	-
ExceptionaL items	-	-	-	-	-	-
Profit Before Tax	3,026.91	2,588.18	16.95	3,147.27	2,355.47	33.62
Less: Provision For Tax	Â			Â
Current Tax	820.93	716.10	Â	779.45	664.93	Â
Deferred Tax	(54.89)	(70.97)	Â	22.78	(69.08)	Â
Profit After Tax	2,260.87	1,943.05	16.36	2,345.04	1,759.62	33.27
Less: Profit for the year attributabLe to NoncontroLLing interests	(1)	10.36	Â	-	Â	-
Profit attributable to owners of the Company	2,261.87	1,932.69	17.03	2,345.04	1,759.62	33.27
BaLance of profit brought forward from earLier years	8,364.29	7,417.35	Â	7037.93	6,376.60	Â
Add: Other Comprehensive income /(Loss)	(5.71)	(6.71)	Â	(7.49)	(4.97)	Â
BaLance avaiLabLe for appropriation	10,620.45	9,343.33	Â	9,375.48	8,131.25	Â
Less: Appropriations	Â			Â
Dividend paid on Equity Shares	777.78	740.23	Â	778.38	741.32	Â
Transfer to Statutory Reserves	469.13	352.94	Â	469.00	352.00	Â
Add/Less: Other Adjustments:	Â			Â
Changes in Group's Interest	(0.65)	114.13	Â	-
BaLance carried forward to baLance sheet	9,372.89	8,364.29	Â	8,128.10	7,037.93	15.49
Net worth	21,529.46	19,933.25	8.01	19,812.23	18,157.49	9.11

Consolidated Performance Highlights

¦    TotaL Income increased by 16.03% to ' 18,530.46 crore for FY2025 as compared to ' 15,970.32 crore in FY2024.

¦    Profit Before Tax ("PBT") increased by 16.95% to ' 3,026.91 crore for FY2025 as compared to ' 2,588.18 crore in FY2024.

¦    Profit After Tax ("PAT”) (Net of non-controLLing interest) increased by 17.03% to ' 2,261.87 crore for FY2025 as compared to ' 1,932.69 crore in FY2024.

Standalone Performance Highlights

¦    During the year under review, the Company has disbursed Loans of ' 57,899.69 crore as against ' 56,208.22 crore during the previous year, an increase of 3% over the same period in previous year.

¦    TotaL Income increased by 18.52% to ' 16,074.69 crore for the year ended 31^st March 2025 as compared to ' 13,562.42 crore for the previous year.

¦    PBT increased by 33.62% to ' 3,147.27 crore as compared to ' 2,355.47 crore for the previous year.

¦    PAT increased by 33.27% to ' 2,345.04 crore as compared to ' 1,759.62 crore in the previous year.

¦    The Assets Under Management ("AUM”) registered a growth of 17% and stood at ' 1,19,673.02 crore as at 31^st March 2025 as against ' 1,02,596.77 crore as at 31^st March 2024.

The Gross Stage 3 Loan assets stood at ' 4,413.94 crore as on 31^st March 2025 as compared to ' 3,490.90 crore as on 31^st March 2024. The Gross Stage 3 as a percentage to Business Assets increased to 3.7% as on 31^st March 2025 as against 3.4% as on 31^st March 2024.

During the year, the Company's asset quaLity remained within a comfortabLe range, with Gross Stage 3 sLightLy higher at 3.7% of Business assets and as targeted, the Company has been abLe to maintain the aggregate LeveL of Gross Stage 2 + Gross Stage 3 beLow 10% (actuaL at 9.1%) of business assets as on 31^st March 2025. WhiLe the credit cost for the year was at 1.3% underscoring prudent risk management. The Company continued to maintain underwriting discipLine and a proactive approach to restrict earLy-stage deLinquencies.

Material changes from the end of the financial year till the date of this report

No materiaL changes and commitments have occurred after the cLosure of the FinanciaL Year 2024-25 tiLL the date of this Report, which wouLd affect the financiaL position of your Company.

ECL and other updates

The Company estimates impairment on financiaL instruments as per Expected Credit Loss ("ECL”) approach prescribed under Ind AS 109 'FinanciaL Instruments' and in accordance with the Board approved ECL PoLicy.

In estimation of Expected Credit Loss (ECL) provisions, the Company has been using the updated ECL modeL in which muLti-factor macro-economic variabLes and product cLassification of vehicLe Loan portfoLios are buiLt-in and the Company has been updating the ECL modeL with the Latest set of data inputs at reasonabLe periodic intervaLs to capture the expected significant changes in macro-economic growth prospects and shifts in market drivers and changes in risk profiLe of customer credit exposures. During the current financiaL year, as part of annuaL refresh, aLong with updation of Latest macro-economic growth estimates and other reLevant input parameters for computation of ECL provisions for Loan portfoLios, the Company has aLso caLibrated the ECL modeL for SmaLL and Medium Enterprise (SME) portfoLio and Trade advance portfoLio. The Company had estimated the ECL provision for year ended 31^st March 2025 in accordance with the updated ECL modeL. The Company hoLds provision towards expected credit Loss as at 31^st March 2025 aggregating to ' 3,459 crore (as at 31^st March 2024: ' 3,401.59 crore).

The Company's net Stage-3 assets ratio stood at 1.84% as at 31^st March 2025 as against 1.28 % as at 31^st March 2024.

Transfer to Reserves

The Company has transferred an amount of ' 469 crore to the Statutory Reserves, in compLiance with section 45-IC of the Reserve Bank of India ("RBI”) Act, 1934. Further, the Board of your Company has decided not to transfer any amount to the GeneraL Reserve for the year under review. An amount of ' 8,128.10 crore is proposed to be retained in the Profit and Loss Account of the Company.

The Company maintains sufficient Liquidity buffer to fuLfiL its obLigations arising out of issue of debentures. The Company being an NBFC, is exempt from transferring any amount to debenture redemption reserve in respect of privateLy pLaced or pubLic issue of debentures, as per the provisions of section 71 of the Companies Act, 2013 read with RuLe 18 of the Companies (Share CapitaL and Debentures) RuLes, 2014, read with appLicabLe Ministry of Corporate Affairs circuLar. In respect of secured Listed non-convertibLe debt securities, the Company maintains 100% security cover or higher security cover as per the terms of Information Memorandum, GeneraL Information Document ("GID”), Key Information Document ("KID”), as the case may be and/or Debenture Trust Deed, sufficient to discharge the LiabiLity towards principaL amount and interest thereon.

Dividend

Considering good performance and strong cash flows, your Directors are pLeased to recommend a dividend of ' 6.50 per equity share (325%) on the face vaLue of ' 2 each, for FY2025 vis-a-vis 315% dividend in FY2024. Dividend is subject to approvaL of the Members at the ensuing AnnuaL GeneraL Meeting.

The Company has not paid any Interim Dividend during the financiaL year under review.

The dividend recommended is in accordance with the Company's Dividend Distribution PoLicy, within the ceiLing and in compLiance with the framework prescribed in RBI Master Directions (formerLy known as RBI guideLines on DecLaration of Dividend by NBFCs).

Tax on Dividend

In terms of the provisions of the Income-tax Act, 1961, the Company wiLL make payment of dividend after deduction of tax at source ("TDS”) as per the prescribed rates, to those sharehoLders whose names appear as beneficiaL owner/ member in the List of beneficiaL owners to be furnished by NationaL Securities Depository Limited/ CentraL Depository Services (India) Limited in case of shares heLd in demateriaLised form, or in the Register of Members in case of shares heLd in physicaL

 

fund distribution (through its joint venture Mahindra Manulife Investment Management Private Limited), and fixed deposit schemes. Additionally, your Company continued to penetrate into leasing and loan against property business. In FY2025, the focus has been on building cross sell engine by entering into Insurance Corporate Agency and growing its co-lending and coorigination partnerships with fintechs, NBFCs, Banks and MSME platforms. In addition, your Company has decided to foray into mortgage space.

In the core vehicle finance business, your Company has strengthened its capabilities by designing flexible financial products aligned with customers' cash flow patterns. It has also built heft around underwriting, risk management and has set up a fraud control unit. As a result, it has solidified its dominance in financing Mahindra's vehicles and tractors and is actively pursuing partnerships with prominent Original Equipment Manufacturers ("OEMs”) to expand its market presence. It continues to strengthen its position in the pre-owned vehicle and tractor space.

Pillars of Progress: Growth, Efficiency, and Customer-Centricity

A.    Expanding On-the-Ground Presence

As of 31^st March 2025, MMFSL's network encompasses 1,365 offices and branches across 27 States and 7 Union Territories, reinforcing its nationwide reach. This expansive infrastructure reduces reliance on any single region, mitigating risks posed by localized climatic or economic fluctuations, such as excessive rainfall or drought. Each branch serves as a hub for organic growth, leveraging local relationships to deliver a suite of financial services, including vehicle loans, SME funding, insurance solutions, and more. Centralized oversight ensures consistent asset quality, while the Company's deep penetration into rural and semi-urban markets positions it to address the evolving financial demands and ambitions of India's diverse population.

Your Company's enhanced branch structure facilitates better opportunity to cater to customers' needs and assist us in better customer servicing and improved regulatory compliance.

B.    Strengthening Digital Engagement

Your Company is deepening its reach in rural and semi-urban India through end-to-end digital loan journeys, automated credit assessments, and faster turnaround times.

The redesigned Mahindra Finance Customer App offers customers a seamless experience for EMI payments, loan management, Fixed Deposit booking, and BBPS-enabled utility payments.

 

form, as at the close of business hours on Tuesday, 15^th July 2025 (Record date for the purpose of Dividend).

Unclaimed dividend transferred to Investor Education and Protection Fund

In terms of the provisions of Sections 124 and 125 of the Companies Act, 2013 ("the Act”) read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, during the year under review, the Company has transferred an amount of ' 5,34,873.60 being the unclaimed dividend for FY 2016-17 to the Investor Education and Protection Fund ("IEPF”). The details of total, amount(s) Lying in unpaid dividend account of the Company for last seven years and due to be transferred to IEPF, is mentioned in the Report on Corporate Governance, forming part of this Annual Report.

Dividend Distribution Policy

In compliance with the provisions of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated Dividend Distribution Policy, setting out criteria and circumstances to be considered by the Board while recommending dividend to the shareholders. The Dividend Distribution Policy provides for eligibility criteria, aspects to be considered by the Board while recommending dividend, ceiling on dividend payout ratio etc., in accordance with the Master Direction -Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 dated 19^th October 2023.

As set out in Dividend Distribution Policy, the Company's dividend payout is determined based on available financial resources, investment requirements and optimal shareholder return.

Within these parameters, the Company endeavours to maintain a total dividend payout ratio in the range of 20% to 30% of the annual standalone Profit after Tax ("PAT”) of the Company.

The Dividend Distribution Policy can also be accessed on the Company's website at the web-link: https://www. mahindrafinance.com/investor-relations/policy-and-sharehoLder-information#mmfsL-poLicies .

Operations

Your Company remains dedicated to fueling the aspirations of the customers by providing financing solutions for automobiles and tractors, primarily catering to those who rely on these assets for their livelihoods and personal mobility. Beyond this core offering, your Company has broadened its scope to include preowned vehicle loans, support for small and medium enterprises (SMEs), insurance brokerage services (via its subsidiary Mahindra Insurance Brokers Limited), mutual

The app is available in 12 languages and has over 4.5 lakh+ App sign-ups since launch of revamped version in Dec 2024.

An AI-powered Chatbot launched in 2024, provides multilingual support (in 4 languages) via app and web.

Over 35 lakh+ messages have been exchanged.

UDAAN - Your Company's transformation initiative assists in elevating digital capabilities across the value chain, offering assisted journeys backed by analytics, alternate data, and fraud prevention tools, thereby leading to improved sales and operations productivity, reduced turnaround times, and enhanced financial discipline. The assisted end-to-end digital loan process, enhanced by advanced analytics, alternative data sources, account aggregators (AA), bank statement analysis (BSA), improved fraud prevention measures, credit assessments, digital KYC, e-stamping, e-sign, and e-mandates have led to significantly reduced turnaround times. Additionally, it has streamlined documentation through automation and enhanced transparency throughout the lending process, underscoring our commitment to providing innovative and customer-focused financial solutions.

Our newly launched digital collections application offers a 360-degree view of the customer, featuring a performance and activity dashboard, loan information, payment history, and additional functionalities. By leveraging automated reminders and digital payment platforms, we ensure prompt collections while minimizing operational expenses and reducing delinquencies. Additionally, employees are equipped with nudges to assist customers in navigating repayment options (UPI, QR codes, debit card, internet banking, etc.), addressing any concerns, recording minutes of meetings (MOMs), and providing customized solutions. This initiative has enhanced our portfolio's health, improved customer convenience and experience, and promoted financial discipline within an increasingly digital landscape.

C. Harnessing Technological Innovation

Your Company is leveraging AI, ML, and advanced analytics to optimize underwriting, collections, and decision-making. AI-powered scorecards now segment customers by risk, allowing for smarter approvals and reduced delinquencies. Our GenAI-powered chat interface provides senior management with instant data insights, while a Data Lakehouse enables real-time dashboards and performance tracking.

A next-gen AI collections strategy has reduced EMI bounce rates by 20-25% in early buckets, improving asset quality. AI-ML tools are also being used to enhance the pre-approved and pre-qualified loan offer base by 8x.

Cloud infrastructure has been strengthened through a multi-cloud agnostic strategy, achieving cost efficiencies, better scalability, and improved data security. We have implemented cybersecurity upgrades including DLP, XDR, SIEM, WAF, and MDM tools, along with a 24/7 Security Operations Centre and third-party Red Team assessments to safeguard critical assets.

In line with RBI's IT governance directions, we've built a centralized tech asset inventory, enhanced IT service management workflows, and established robust frameworks for business continuity, risk assessment, and IT outsourcing - reinforcing operational resilience and regulatory compliance.

D.    Data as a Strategic Edge

Your Company has built a centralized Data Lakehouse architecture, empowering real-time access to performance dashboards, KPIs, and crossfunctional business insights. This is strengthening our ability to make data-driven decisions and customize offerings across customer segments.

Advanced analytics are embedded across functions—improving lead conversion, channel productivity, and collections forecasting. These insights are also enhancing financial discipline and regulatory preparedness.

E.    Improved Insurance Coverage of MMFSL assets

Your Company received its corporate agency license from IRDAI in May 2024 and since then Company has partnered with various insurance companies for offering a comprehensive range of insurance products to meet diverse customer needs. Your Company has introduced exclusive group insurance products tailored for its existing customers. Your Company also offers retail insurance solutions in Motor, Health & Life insurance for both new and existing customers.

Your Company leverages its Pan-India branch network of 1365 branches and trained, certified personnel with a strong understanding of customer needs. Your Company has also tied-up with 10 insurance companies - 4 Life, 2 Health and 4 General Insurance companies to provide adequate choice to its customers.

This has resulted in improved insurance penetration and enhanced service delivery through an in-house cLaims team, resulting in better cLaims experience. Continuous employee training and better insurance penetration have further reinforced the model's success, positioning insurance as a strategic lever for risk management. AH these efforts led to an effective insurance coverage of your Company's assets, lives and health of customers.

The distribution network is driven by a dedicated team of employees (Specified Persons) and PoSP (Point of Sales Persons), positioned across ~1200 + locations to ensure widespread reach and seamless customer service.

Additionally, your Company also plans to expand its distribution channel by introducing digital and telemarketing platforms to serve broader customer base across India more efficiently.

F. Future Growth Enablers

MMFSL's vision is to be a leading and responsible financial solution partner of choice for emerging India. This commitment reflects a dual focus on responsible customer service and sustainable profitability, extending beyond traditional lending to a holistic suite of solutions. The emphasis on digital innovation and product diversification is central to this vision.

Your Company targets a sustainable growth trajectory and maintaining stable asset quality. Strategic efforts are focused on deepening penetration in pre-owned car, used tractor, and SME financing, tapping into untapped demand within these segments. To broaden its service offerings, MMFSL has forged new alliances for colending and co-origination. These collaborations enhance outreach, improve credit access, and offer competitive rates to underserved communities. The AUM from these partnerships have gone up significantly in the current financial year as compared to the previous financial year. The Company remains committed to refining its risk management, underwriting frameworks to sustain top-tier asset quality and strengthening its partnerships with fintechs, NBFCs, banks & MSME platforms. Moving forward, the growth strategy will be centred around leveraging digital platforms to enhance service delivery through customer acquisition, establishing strategic alliances and exclusive partnerships with fintech firms and next-generation technology distributors, strengthening

digital capabilities to ensure seamless accessibility and an optimized customer experience and utilizing digital platforms to identify cross-sell and up-sell opportunities while enhancing overall customer service.

Other Developments¦    Mortgage Business

The Board of your Company has approved expansion into Mortgage business which would include providing Housing Finance, Top-up loans, Lease rental discounting, home improvement and home extension loans, balance transfer loans, construction finance etc. Your Company intends to leverage its strong geographical presence in the retail lending space to exploit the mortgage lending opportunity for its existing customers as well as new customers. Your Company would also participate in affordable housing loan schemes of government. This expansion would leverage your Company's established presence in the financial services sector and its deep understanding of the customer needs resulting in increase in the mortgage lending opportunity to its existing customers as well as new customers.

Your Company is in the process of building its mortgage capabilities and is in investment mode with focus on recruitment, infrastructure build out, and technology setup towards building up its capabilities.

¦    Rights Issue of Equity Shares

The Board of Directors of the Company ("Board”) at their meeting held on 13^th February 2025, had inter-alia considered and approved the fund raising by way of offer and issuance of fully paid-up equity shares of the Company for an amount not exceeding ' 3,000 Crore by way of a rights issue ("Rights Issue”) to the eligible equity shareholders of the Company, to primarily maintain a strong capital adequacy ratio keeping in mind Company's growth plans to augment its Assets Under Management ("AUM"). Till the date of this report the Company has not made any public announcement and has not undertaken further action or decision in relation to the Rights Issue including setting a Record date or ratio or pricing. Necessary intimations/ announcements to the shareholders, stock exchanges etc., on the above would be made in due course.

Change in Nature of Business

There has been no change in the nature of business and operations of the Company during the year under review.

RBI Compliances

Your Company has been categorised as an NBFC- Upper Layer vide press release dated 30^th September 2022, issued by RBI. Your Company has always endeavored to maintain the highest standards of compliance within the organisation and shall continue to do so going ahead. The Company continues to comply with all the applicable laws, regulations, guidelines etc. prescribed by the RBI, from time to time including the norms pertaining to capital adequacy, non- performing assets etc.

Your Company's asset liability management is reviewed on quarterly basis by a focused Board level committee viz. Asset Liability Committee. Your Company's liquidity coverage ratio ("LCR”) was 277% as on 31^st March 2025 against the mandatory requirement of 100%.

Your Company has adopted all the mandatory applicable policies under Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 like Large Exposure Policy, Internal Capital Adequacy Assessment Policy (ICAAP), Compliance Policy etc.

Compliance Risk Assessment Framework and Compliance Testing ("CRAFT")

Your Company has also put in place Compliance Risk Assessment Framework and Compliance Testing in compliance with RBI circular dated 11^th April 2022.

Business Continuity Policy

In order to have robust framework & process for Business continuity, your Company has implemented Business Continuity Management Policy which inter-alia includes identification, monitoring, reporting, responding and managing the risks including mitigating risks of a significant / prolonged business disruption in order to protect the interests of the Company's customers, employees and stakeholders.

Your Company continues to invest in talent, systems and processes to further strengthen the control, compliance, risk management and governance standards in the organisation.

Internal Ombudsman

Your Company has appointed an Internal Ombudsman ("IO”) in compliance with the Master Direction - Reserve Bank of India (Internal Ombudsman for Regulated Entities) Directions, 2023 dated 29^th December 2023, ("Master Directions”).

In compliance with Master Directions, Mr. Alok Kumar Sharma has been appointed and is currently serving as the 'IO' of the Company, contact details of IO are available on the website and can be accessed on the website at https://www.mahindrafinance.com/customer-service/nbfc-ombudsman-scheme/contact-details

The Board of Directors at the quarterly Board meetings review number of complaints escalated to IO and status of disposal of such complaints in compliance with the said RBI circular. Report on number of complaints escalated to IO and status of disposal of such complaints is reproduced hereunder:

No of complaints outstanding at the beginning of the year	404
No of complaints received during the year	43,174
Of the complaints received, number of complaints referred to IO during the year, which were rejected by the Company	2,757
Of the complaints referred to IO how many complaints were agreed by IO	2,749
Of the complaints referred to IO how many complaints were disagreed by IO	8
Total complaints pending with IO at the end of the year	74

Macro factors and sourcing of funds:

During the year under review, Reserve Bank of India ("RBI”) focused mainly on neutral monetary policy to ensure that inflation durably aligns with the target, while supporting growth. During Q4 FY2025 with inflation on a decreasing trend and increasing global uncertainties, RBI reduced the REPO Rate by 25bps to 6.25%. Liquidity conditions remained tight with the banking sector liquidity remaining largely negative in FY2025.

Inflation in India has remained majorly below 6% (RBI upper tolerance limit) throughout the year. Consumer Price Index ("CPI”) inflation was 3.34% in March 2025. Globally, inflation showed a downward trajectory and seems to be moderating paving the way for a growth revival. However, this comes with a caution as successive shocks like the Russian-Ukraine war, Israel-Hamas-Iran conflict, significant US policy changes by new administration in 4 distinct areas viz: trade, immigration, fiscal policy and regulation which is expected lead to global uncertainty and economic slowdown. The rupee has remained under pressure throughout FY2025 against the US dollar. During Q4 FY2025, it remained volatile primarily on account of proposed US policy changes, however it recovered and ended at ' 85/$ mark.

The 10 Year G Sec curve has been following a reducing trend from around 7.1% to 6.5% during the financial year. During the year, interest cost on borrowed funds remained at 7.64% (interest cost to average borrowing) for the Company.

During the year under review, your Company continued with its diverse methods of sourcing funds incLuding borrowing through Secured and Unsecured Debentures, Term Loans, External Commercial Borrowings, Securitisation, Fixed Deposits, Commercial Papers, Inter Corporate Deposit etc., and maintained prudential Asset Liability match throughout the year. Your Company sourced long-term debentures and loans from banks and other institutions at attractive rates. Your Company continues to expand its borrowing profile by tapping new lenders and geographies.

Securitisation

During the year, your Company successfully completed Securitization/Direct Assignment transactions aggregating to ' 6,530 crore.

Non-Convertible Debentures

During the year under review, your Company raised an aggregate of ' 7,255 crore through issuance of Nonconvertible ("NCDs") debentures private placement basis as mentioned hereunder:

1.    ' 5,755 crore, raised though issuance of Secured Redeemable Non-Convertible Debentures.

2.    ' 1,500 crore raised through issuance of Unsecured Redeemable Non-Convertible Subordinated Debentures eLigibLe for Tier II CapitaL.

As specified in the respective offer documents, the funds raised from issuance of NCDs were utiLised for various financing activities, onward lending, repaying the existing indebtedness, working capital and for general corporate purposes of the Company. Details of the end-use of funds were furnished to the Audit Committee on a quarterly basis. The NCDs are listed on the debt market segment of BSE Limited. As on 31^st March 2025 there are no unlisted NCDs.

During the year, your Company has redeemed NCDs worth ' 4,645 crore and subordinated debt worth ' 215 crore on private placement basis.

Your Company is in compliance with the applicable guidelines issued by Securities and Exchange Board of India and other applicable regulators in this regard.

There has been no default in making payments of principal and interest on aLL the NCDs issued by the Company on a private pLacement basis and through pubLic issue. Further, there was no deviation/variation in use of proceeds raised from the object stated in the offer document. As on 31^st March 2025, there was no unpaid/uncLaimed interest on NCDs issued on a private pLacement basis. With respect to the three pubLic issuances of NCDs made by the Company, aggregate PrincipaL payment of ' 5,93,000 /- and Interest of ' 40,38,064 /- was uncLaimed by the investors as on 31^st March 2025. Reminders have been sent to the NCD hoLders to cLaim the same.

Commercial Paper

As on 31^st March 2025, the Company had CommerciaL Paper ("CPs”) with an outstanding amount (face vaLue) of ' 2,153 crore. CPs constituted approximateLy 2.09% of the outstanding borrowings as on 31^st March 2025. The CPs of the Company are Listed on the debt market segment of the NationaL Stock Exchange of India Limited.

Borrowings

In order to expand the business of the Company and to cater the enhanced budgeted disbursements, the Board of Directors of the Company have subject to the approvaL of the sharehoLders of the Company, approved increase in the overaLL borrowing Limit from ' 1,30,000 crore to ' 1,50,000 crore.

Credit Ratings

Your Company enjoys highest rating for its Long-term and short-term borrowing programmes from aLL the credit rating agencies that it works with. Your Company has been rated by CRISIL Ratings Limited ("CRISIL”) & India Ratings and Research Private Limited ("India Ratings”) for its NonConvertibLe Debentures program, CommerciaL Papers, Banking FaciLities & Fixed Deposits. Further, CARE Ratings Limited ("CARE”) and Brickwork Ratings India Pvt. Ltd. ("BWR”) has rated your Company for the Non-ConvertibLe Debentures program. These rating agencies have reaffirmed the highest credit rating for your Company's short-term & Long-term borrowing instruments. Your Company beLieves that its credit ratings and strong brand equity enabLes it to borrow funds at competitive rates. The details of ratings are given in the Corporate Governance Report, forming part of this AnnuaL Report.

Capital Adequacy

As on 31^st March 2025, the CapitaL to Risk Assets Ratio ("CRAR”) of your Company was 18.33% which is weLL above the minimum requirement of 15% CRAR prescribed by the Reserve Bank of India.

Out of the above, Tier I capitaL adequacy ratio stood at 15.25% and Tier II capitaL adequacy ratio stood at 3.08% respectiveLy.

Share Capital

The issued, subscribed and paid-up Equity Share CapitaL as on 31^st March 2025 was ' 247.1 crore, consisting of 123,55,29,920 Equity Shares of the face vaLue of ' 2 each, fuLLy paid-up.

There was no change in the issued, subscribed and paid-up share capitaL during the year under review.

As on 31^st March 2025, none of the Directors of the Company hoLd instruments convertibLe into equity shares of the Company. DetaiLs of Restricted Stock units ("RSUs") granted to Executive Directors are given in the Corporate Governance Report forming part of this AnnuaL Report.

Economy Global Economy

As per the InternationaL Monetary Fund, the gLobaL economy in CY 2024 navigated a compLex Landscape shaped by geopoLiticaL shifts, trade fluctuations, and inflationary trends. The EL Nino phenomenon significantLy impacted economic stabiLity, causing droughts, floods, and disruptions to marine ecosystems, affecting

agricuLture, infrastructure, and the fishing industry whiLe increasing inflationary pressures. OiL prices remained voLatiLe, initiaLLy rising due to geopoLiticaL tensions and positive macroeconomic trends but Later decLining amid bearish sentiment, economic concerns, and easing supply risks. Moreover, gLobaL trade faced disruptions as Red Sea attacks reduced Suez CanaL traffic, whiLe Panama CanaL drought-driven restrictions sLowed shipments across the worLd. GLobaL growth is expected moderate from 3.3% in 2024 to 2.8% in 2025, and projected to stabiLise at 3.0% in 2026. SuppLy chain vuLnerabiLities prompted businesses and governments to reassess trade dependencies and impLement strategic measures. Inflation is expected to ease from 5.7% in 2024 to 4.3% in 2025 and 3.6% in 2026, remained a concern, influencing cautious monetary poLicies. Rising trade tensions, incLuding new tariffs and retaLiatory actions, couLd introduce uncertainties, impacting inflation and economic momentum. However, economies are expected to Leverage innovation, sustainabiLity efforts, and poLicy interventions to maintain Long-term stabiLity in future.

Domestic Economy

India remained one of the fastest-growing major economies as strong domestic demand, structuraL reforms, and supportive poLicies drove its expansion. The country surpassed the UK to become the worLd's fifth-Largest economy, with steady growth supported by manufacturing expansion, a robust services sector, and increased infrastructure investments. Government initiatives, such as digitaL transformation and financiaL incLusion, strengthened domestic manufacturing and attracted foreign direct investment. Despite gLobaL uncertainties, geopoLiticaL tensions, and inflationary pressures sLowing growth in FY2025, the economy is expected to reach 6.5% in FY2026 as per the RBI Monetary PoLicy Report (ApriL-2025). However, with the inflationary pressures easing, the Reserve Bank of India reduced the repo rate to 6.00% in ApriL 2025. WhiLe gLobaL risks persist, India's economic outLook remains strong, reinforcing its position as a Leading gLobaL economic powerhouse.

Management Discussion and Analysis

In accordance with the appLicabLe provisions of the Master Direction- Reserve Bank of India (Non-Banking FinanciaL Company - ScaLe Based ReguLation) Directions, 2023 and the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015, a detaiLed anaLysis of the Company's performance is discussed in the Management Discussion and AnaLysis Report, which forms part of this Report.

Corporate Governance

Your Company practices a culture that is built on core values and ethical governance practices. Your Company is committed to Integrity and transparency in all its dealings and pLaces high emphasis on business ethics. The Board of your Company exercises its fiduciary responsibilities in the widest sense of term and endeavours to enhance long-term shareholder value. Company's disclosure regime is aimed at achieving best practices, gLobaLLy

A Report on Corporate Governance along with a Certificate from M/s. KSR & Co, Company Secretaries LLP, Secretarial Auditor, certifying compliance with the conditions of Corporate Governance forms part of this Report.

Ethics Framework

The Ethics & Corporate Governance framework is anchored by dearly defined policies and procedures, covering areas such as Anti-Bribery and Anti-Corruption Policy ("ABAC”), Policy on Gifts & Entertainment ("G&E"), PoLicy on Prevention of SexuaL Harassment at WorkpLace ("POSH"), WhistLe-BLower PoLicy ("WB") to ensure robust Corporate Governance.

New joiners are mandatoriLy required to undertake e-Learning moduLes on the Company's Code of Conduct ("COC"), POSH and ABAC. In addition to this, an AnnuaL CompLiance DecLaration ModuLe on COC is mandated for aLL the empLoyees.

The Code of Conduct and aLL the Company's poLicies are accessibLe on the Company's website; in the Governance section at the web-Link: https://www.mahindrafinance. com/investor-reLations/poLicy-and-sharehoLder-information#mmfsL-poLicies .

The Code of Conduct Committee and the Audit Committee ensures that the areas of Ethics & Governance framework are executed effectiveLy and the decisions on substantiated cases are taken in a fair, just and consistent manner across business.

Investor Relations

During the current year, your Company has met muLtipLe investors and anaLysts-both domestic and international These sessions were undertaken through a mix of one-on-one or group meetings. Your Company aLso participated in muLtipLe domestic conferences organised by reputed broking houses, in addition to accessing overseas investors through Non-DeaL Roadshows ("NDRs"). Having meetings in virtuaL format (through conference caLLs and video conferencing) enabLed accessing a Larger investor base.

Your Company hoLds quarterLy and annuaL earnings caLLs through structured conference caLLs and/or web-Links, detaiLs of which are made avaiLabLe to pubLic through the Company's website and stock exchange(s).

During these meetings/ earnings caLLs, the interactions are based on generaLLy avaiLabLe information accessibLe to the pubLic in a non-discriminatory manner. No unpubLished price sensitive information is shared during such meetings. Your Company beLieves in transparent communication and have been voLuntariLy discLosing criticaL information regarding Company's performance through monthLy/quarterLy updates.

Silent period

As a good governance practice, your Company voLuntariLy observes a 'SiLent / Quiet period' starting from 1^st day of the start of the month after the end of the quarter for which the financiaL results are to be announced tiLL the time of announcement of said resuLts. During this period, no meetings with investors/anaLysts/funds are heLd to discuss unpubLished financiaL performance of the Company to ensure protection of the Company's UnpubLished Price Sensitive Information ("UPSI").

Consolidated Financial Statements

The ConsoLidated FinanciaL Statements of your Company, its subsidiaries, associate/joint venture for FY2025, prepared in accordance with the reLevant provisions of the Companies Act, 2013 ("the Act") and appLicabLe Indian Accounting Standards aLong with aLL reLevant documents and the Auditors' Report form part of this AnnuaL Report.

Pursuant to the provisions of Section 136 of the Act, the StandaLone and ConsoLidated FinanciaL Statements of the Company, aLong with reLevant documents and financiaL statement of each of the subsidiaries of the Company are avaiLabLe on the website of the Company and can be accessed at the web-Link: https://www. mahindrafinanc.e.c.om/investor-relations/financ.ial-information .

Subsidiaries, Joint Venture(s) and Associate(s)

A report on the performance and financiaL position of each of the Company's subsidiaries, associate/ joint venture is incLuded in the ConsoLidated FinanciaL Statements and the saLient features of their financiaL statements and their contribution to overaLL performance of the Company as required under Section 129(3) of the Companies Act, 2013 ("the Act") read with RuLe 8(1) of the Companies (Accounts) RuLes, 2014, is provided in Form AOC-1, annexed as 'Annexure A’ to the ConsoLidated FinanciaL Statements and forms part of this AnnuaL Report.

Material Subsidiary

ReguLation 16 of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations") defines a "materiaL subsidiary" to mean a subsidiary, whose turnover or net worth exceeds ten percent of the consoLidated turnover or net worth respectiveLy, of the Listed entity and its subsidiaries in the immediateLy preceding accounting year.

Mahindra RuraL Housing Finance Limited ("MRHFL") which was a materiaL subsidiary of the Company up to year ended 31^st March 2024, did not meet the criteria for materiaL subsidiary as stated in reguLation 16(1)(c) of the Listing ReguLations for FY2025 and accordingLy MRHFL ceased to be a MateriaL subsidiary of the Company for FY2025.

Your Company does not have any MateriaL Subsidiary for the FinanciaL year ended 31^st March 2025.

Operational and performance highlights of the Company’s Subsidiary/Joint venture Companies for FY2025 are given hereunder:Mahindra Rural Housing Finance Limited

Mahindra RuraL Housing Finance Limited ("MRHFL"), the Company's subsidiary, engaged in the business of providing Loans for purchase, renovation and construction of homes to individuaLs in the Low and middLe income category of the country, registered a totaL income of ' 1,196.70 crore as compared to ' 1,294.44 crore for the previous year, decrease of 7.55 % over the previous financiaL year. Loss Before Tax stood at ' 304.58 crore as compared to profit before tax of ' 4.84 crore for the previous year. Loss After Tax stood at ' 227.94 crore as compared to profit after tax of ' 3.60 crore in the previous year. Company is making strategic efforts to drive enhanced operationaL efficiencies.

During the year under review, MRHFL disbursed Loans aggregating to ' 2,023 crore serving more than 12,600 househoLds as against ' 2,071 crore in the previous year. MRHFL is expanding its footprint in affordabLe housing.

Mahindra Insurance Brokers Limited

Mahindra Insurance Brokers Limited ("MIBL"), whoLLy owned subsidiary of the Company (effective 22^nd September 2023) is engaged in the business of Direct and Re-insurance Broking.

During the year under review, there was growth of 4.03% in Gross Premium faciLitated for the Corporate and RetaiL business Lines, increasing from ' 4,555.86 crore in FY2024 to ' 4,739.27 crore in FY2025. The TotaL Income increased by 13.21% from ' 1,094.95 crore in FY2024 to ' 1,239.59 crore in the FY2025. The Profit Before Tax decreased by 26.02% from

' 167.50 crore to ' 123.92 crore and the Profit After Tax decreased by 28.12% from ' 123.52 crore to ' 88.78 crore during the same period.

Mahindra Manulife Investment Management Private Limited

Mahindra ManuLife Investment Management Private Limited ("MMIMPL") acts as an Investment Manager for the schemes of Mahindra ManuLife MutuaL Fund ("MutuaL Fund"). As on 31^st March 2025, MMIMPL was acting as the investment manager to 24 schemes of the MutuaL Fund. The average Assets Under Management in these 24 schemes rose to ' 27,090 crore as on 31^st March 2025 as compared to ' 19,659 crore as on 31^st March 2024, deLivering a growth of 38% in assets. Of these assets, ' 24,441 crore were in equity and hybrid schemes in March 2025, as compared to ' 17,613 crore in March 2024, a growth of 38.77%. MMIMPL has empaneLed 34,439 distributors and now has 14,06,485 investor accounts in these 24 schemes.

During the year under review, the totaL income of MMIMPL was ' 87.71 crore as compared to ' 63.54 crore for the previous year. The operations for the year under consideration have resuLted in a Loss of ' 10.06 crore as against a Loss of ' 27.27 crore during the previous year. MMIMPL pLans to reduce Losses through focus on consistent fund performance, saLes strategy aimed to buiLd market share with key distributors, and prudent cost management. AdditionaLLy, MMIMPL pLans to enhance product suite by Launching 2-3 new funds during FY2026 to enabLe soLutions across the risk reward spectrum.

Mahindra Manulife Trustee Private Limited

Mahindra ManuLife Trustee Private Limited ("MMTPL") acts as the Trustee to Mahindra ManuLife MutuaL Fund ("MutuaL Fund").

During the year, MMTPL earned trusteeship fees of ' 99.14 Lakhs and other income of ' 14.62 Lakhs as compared to ' 107.03 Lakhs and ' 10.29 Lakhs, respectiveLy, for the previous year. MMTPL recorded a profit of ' 61.82 Lakhs for the year under review as compared to profit of ' 59.72 Lakhs in the previous year.

Mahindra Ideal Finance Limited (Sri Lanka)

Your Company hoLds a 58.2% stake in Mahindra IdeaL Finance Ltd (Sri Lanka) {"MIFL"] with a totaL investment of ' 77.97 crore. Leveraging Mahindra Finance's expertise of over 30 years in the financiaL services sector and the LocaL management's expertise of the domestic market, MIFL is poised to buiLd a Leading financiaL services business in Sri Lanka.

Transfer of Unclaimed amounts pertaining to Fixed Deposits to IEPF:

Pursuant to Section 125 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) RuLes, 2016 ("the IEPF RuLes") as amended from time to time, matured Deposits remaining uncLaimed for a period of seven years from the date they became due for payment are required to be transferred to the Investor Education and Protection Fund ("IEPF") estabLished by the CentraL Government. Further, interest accrued on the deposits which remain uncLaimed for a period of seven years from the date of payment are aLso required to be transferred to the IEPF under Section 125(2)(k) of the Companies Act, 2013.

The Company, during FY2025 has transferred to the IEPF an amount of ' 0.35 crore being the uncLaimed amount of matured fixed deposits and ' 0.05 crore towards uncLaimed/unpaid interest accrued on the Deposits. The concerned depositor can cLaim the Deposit and/or interest from the IEPF by foLLowing the procedure Laid down in the IEPF RuLes.

Loans and Advances

During the year under review, the Company has not given any Loans and advances in the nature of Loans to its Directors or subsidiaries or associate or to firms/ companies in which Directors are interested and no such transactions were outstanding during the year.

DiscLosure on transaction with Mahindra and Mahindra Limited (Promoter) hoLding 52.16% in the Company, as on 31^st March 2025, and other Promoter Group Companies, is provided in note no. 51 of Audited StandaLone FinanciaL Statements for year ended 31^st March 2025.

AccordingLy, the discLosure of particuLars of Loans/ advances, etc., as required to be furnished in the AnnuaL Accounts of the Company pursuant to ReguLation 34[3] and 53(1)(f) read with paragraph A of ScheduLe V of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 is not appLicabLe to the Company.

Particulars of Loans, Guarantees or Investments in Securities

Your Company, being an NBFC registered with RBI and engaged in the business of giving Loans in ordinary course of its business, is exempt from compLying with the provisions of Section 186 of the Companies Act, 2013 ("the Act") with respect to Loans.

 

With improving economic and business environment witnessed in Sri Lanka, MIFL recorded significant rebound in its business activities. The disbursement in vehicLe Lending business in FY2025 was LKR 8.8 Bn, a growth of 212% over FY2024. The Gold loan disbursements docked 20.1 Bn, an increase of 82% over FY2024.

As at 31^st March 2025, the Company's GS3 LeveL dropped to 1.86%, which is industry Leading in the context of the Sri Lankan market. The Company achieved year-round coLLection efficiency of more than 100% in FY2025.

MIFL's totaL income for the FY25 was SriLankan rupee ("LKR") 2,741 Mn vs LKR 2,309 Mn of FY2024. Profit Before Tax (PBT) in FY2025 was LKR 434 Mn, an increase of 30% over FY2024 PBT of LKR 334 Mn. and Profit After Tax (PAT) in FY2025 was LKR 146 Mn, a growth 42% over FY2024 PAT of LKR 103 Mn. MIFL continued investments in increasing its reach to grow the business. The branch network grew to 35 branches, an addition of 5 branches in FY2025, covering the Length and breadth of the country. Investments were made in IT aLso to enhance the customer and user experience.

Mahindra Finance CSR Foundation

Mahindra Finance CSR Foundation was incorporated on 2^nd ApriL 2019 as a whoLLy owned subsidiary of Company registered under Section 8 of the Companies Act, 2013 to promote and support CSR projects and activities of the Company and its group Companies.

The foundation has obtained Registration under Section 12AA and Section 80G of the Income Tax Act, 1961 and CSR Registration Number.

Joint Venture/AssociateMahindra Finance USA LLC ["MFUSA"]

MFUSA's retaiL and deaLer disbursement registered a decrease of 12.39% to USD 803.93 miLLion for the year ended 31^st March 2025 as compared to USD 917.58 miLLion for the previous year.

TotaL Income increased by 5.55% to USD 82.16 miLLion for the year ended 31^st March 2025 as compared to USD 77.84 miLLion for the previous year. Profit before tax was reLativeLy flat at USD 22.67 miLLion as compared to USD 22.86 miLLion for the previous year. Profit after tax decreased by 1.61% to USD 16.93 miLLion as compared to USD 17.21 miLLion in the previous year.

Changes in Subsidiaries, Joint Venture or Associate Companies during the year

During the year under review, there were no changes in the Company's Subsidiaries, Joint Venture/ Associate Companies.

Fixed Deposits and Loans/ Advances

Your Company offers a wide range of Fixed Deposit schemes that cater to the investment needs of various cLasses of investors. These Deposits carry attractive interest rates with superior service enabLed by robust processes and technoLogy. In order to tap ruraL and semi-urban savings, your Company continues to expand its network and make its presence feLt in the most remote areas of the country.

During the year, CRISIL and India Care Ratings Private Limited (FITCH) have reaffirmed a rating of 'CRISIL AAA/StabLe' and 'IND AAA/StabLe' respectiveLy. your Company's Fixed Deposit program which represents highest degree of safety and security of principaL as weLL as timeLy payment of interest. Your Company's Deposits continue to be a preferred investment avenue amongst the investors.

Mahindra Finance accepts deposits from both retaiL and corporate investors. During the year, your Company has mobiLized funds to the tune of ' 6,620.13 Crore from fixed deposits. The consoLidated deposit book of Mahindra Finance stood at ' 10,926.45 Crore as on 31^st March 2025, with an investor base of over 1,01,324 investors.

Digital initiatives

Your Company continues to take rapid strides in improving its digitaL footprint and enabLing an end-to-end paperLess process. Your Company has Launched Mahindra Finance Customer App enabLing customer to enjoy muLtipLe services and products from Mahindra Finance under one pLatform.

Your Company continues to serve the investors by introducing severaL customer centric measures on an ongoing basis to further strengthen its processes in sync with the requirements of the Fixed Deposit ("FD") hoLders. Your Company periodicaLLy sends various intimations via SMS, e-maiLs, post, courier etc., to its investors as weLL as sends reminder emails to cLients whose TDS is LiabLe to be deducted before any payout/accruaL. Your Company aLso provides a digitaL pLatform for onLine appLication/ renewaL of deposits, onLine generation of TDS certificates from customer/ broker portaL and seamLess investment process for its empLoyees.

Your Company has roLLed out severaL customer centric and technoLogicaL initiatives aimed at offering a superior experience to fixed deposit hoLders. Some key ones incLude:

¦    Empowering customers to on board and avaiL servicing through Mahindra Finance Customer App.

¦    Improved customer experience by introducing Digi-Locker based KYC verification to increase coverage of digitaL on boarding.

¦    Introduced partiaL renewaL of FD to reduce the hassLe of rebooking for our customers.

¦    DeveLoped and integrated UPI intent flow to reduce the chances for payment faiLures.

With respect to Fixed Deposits accepted by the Company there has been no default in repayment of principaL or interest on fixed deposit during the year under review.

Your Company being a Non-Banking FinanciaL Company the discLosures required as per RuLe 8(5)(v) and (vi) of the Companies (Accounts) RuLes, 2014 read with Sections 73 and 74 of the Companies Act, 2013, are not appLicabLe to it.

The information pursuant to CLause 35(1) of Master Direction DNBR.PD.002/03.10.119/2016-17 dated 25^th August 2016 issued by the Reserve Bank of India on Non-Banking FinanciaL Companies Acceptance of PubLic Deposits (Reserve Bank) Directions, 2016 ("NBFC ReguLations"), regarding unpaid/uncLaimed pubLic deposits as on 31^st March 2025, is furnished beLow:

i.    TotaL number of accounts of PubLic Deposits of the Company which have not been cLaimed by the depositors after the date on which the deposit became due for repayment: 3434.

ii.    TotaL amounts due under such accounts remaining uncLaimed beyond the dates referred to in cLause (i) as aforesaid: ' 3.81 crore.

Reminders are being sent to the Depositors to cLaim their uncLaimed amounts. Measures taken by the Company to reduce uncLaimed amount incLude penny drop testing, reaching out investors through SMS/ CaLLs/ EmaiL/PhysicaL Letters, assisting nominees, LegaL heir on cLaim settLement process. Company is continuousLy improving and evoLving its operationaL practices to reduce the uncLaimed amounts pertaining to Fixed Deposits.

Pursuant to the provisions of Section 186(4) of the Act, details with regard to the investments made by the Company, as appLicabLe, are given in Note no. 51 (iv) o1 the Standalone financial statements, forming part o1 this Annual Report.

Achievements

Awards/Recognitions received by your Company

during the year are enumerated hereunder:

CSR

¦    Honoured with the Best CSR Initiative & Best Financial Inclusion Initiative Award at the prestigious DNA Awards 2024.

¦    Mahindra Finance's 'Swabhimaan' initiative was honoured with the CSR Project of the Year Award 2023-24 at the India CSR Summit & Awards.

Human Resources

¦    Awarded for its 'Transformational Leadership Development Program' in the category of 'Best Learning & Development Program of the Year- NBFC/HFC/MFI' at the ETBFSI ExceLLer Awards 2024.

¦    Recognised as one of the best workplaces in the categories of 'Top rated Large Company' & 'Top rated financiaL services Company' at the AmbitionBox EmpLoyee Choice Awards 2024.

¦    Awarded "Bombay's WOW WorkpLace Award 2025” for out commitment to buiLding an inspiring, empLoyee-first workpLace.

¦    Recognised as the 'Best NBFC in TaLent & Workforce' at the 29^th Edition of Best Banks and NBFCs Awards organised by Business Today.

Marketing

¦    Awarded for content fiLm 'Main SambhaaL Lungi' in the category of Community Connect at the e4m Do Good Awards.

¦    Won the 'Location-Based Marketing Campaign of the Year' award at the e4m Indian DigitaL Marketing Awards 2024.

Sustainability

¦    Ranked 1^st at BW Business WorLd India's Most SustainabLe Companies 2024 in the FinanciaL Services and Insurance Sector.

¦    Won the GoLd Award for Education and SkiLLs DeveLopment and won the Bronze Award for EnvironmentaL SustainabiLity' at the ACEF Asian Business Leaders Awards 2024.

¦    Mahindra Finance has increased its Dow Jones SustainabiLity Index (DJSI) score to '50' becoming best-in-cLass for Listed NBFCs in India.

Employee Stock Option Scheme- 2010 and Restricted Stock Unit Plan- 2023

With a view to continue the practice of rewarding performance of the empLoyees, creating ownership culture and to retain, motivate and attract taLent in Light of growing business your Company has adopted Restricted Stock Unit PLan nameLy 'Mahindra and Mahindra FinanciaL Services Limited-Restricted Stock Unit PLan 2023' ("MMFSL RSU PLan-2023”) and Mahindra & Mahindra FinanciaL Services Limited EmpLoyees' Stock Option Scheme-2010 ("2010 Scheme”).

During the year under review, your Company granted 6,49,326 Restricted Stock Units ("RSU's”) to the eLigibLe empLoyees under MMFSL- RSU PLan 2023. No options were granted under the Mahindra & Mahindra FinanciaL Services Limited EmpLoyees' Stock Option Scheme-2010 ("2010 Scheme”).

The Company does not have any scheme to fund its empLoyees to purchase the shares of the Company.

The 2010 Scheme and the MMFSL RSU PLan - 2023 of the Company is in compLiance with the Securities and Exchange Board of India (Share Based EmpLoyee Benefits and Sweat Equity) ReguLations, 2021 ("SBEBSE ReguLations”) and there were no amendments to the aforesaid Scheme and PLan during FY2025. A Certificate from M/s. KSR & Co, Company Secretaries, LLP, SecretariaL Auditor of the Company for FY2025, certifying that the Company's above-mentioned Scheme and PLan have been impLemented in accordance with the SBEBSE ReguLations and the resoLution passed by the Members, wouLd be made avaiLabLe for inspection by the Members through eLectronic mode at the AnnuaL GeneraL Meeting ("AGM”) scheduLed to be heLd on 22^nd JuLy 2025.

The appLicabLe discLosures as stipuLated under SBEBSE ReguLations for the year ended 31^st March 2025, with regards to the 2010 Scheme, MMFSL RSU PLan 2023 and Company's stock option trust is upLoaded on the Company's website and can be accessed at the web-Link: https://www.mahindrafinance.com/investor-reLations/ financiaL-information#annuaL-reports .

In terms of reguLation 46(2)(za) of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015, the Company has upLoaded 2010 Scheme and MMFSL RSU PLan-2023 on its website and the same can be accessed at https://www.mahindrafinance.com/ investor-reLations/discLosures-under-reguLation-46-and-62-of-sebi-Lodr

Environment, Social and Governance Sustainability Vision

Mahindra Finance has estabLished its sustainabiLity mission through a board-approved sustainabiLity poLicy that buiLds on the Mahindra Rise principLes of 'Rise for a More Equal World', 'Rise to Be Future Ready' and 'Rise to Create VaLue'. The focus of FY2025 was to Lay the brickwork for Long-term initiatives aLigned to the above three principLes whiLe buiLding capacity of internaL stakehoLders to integrate sustainabiLity practices into the business operations. The priority areas for sustainabiLity integration into the business ethos was cLimate change, innovative energy transition, incLusive poLicies, and stakehoLder engagement.

Climate Change

CLimate change management at Mahindra Finance has a two-pronged approach - (1) protection of Mahindra Finance assets and offices from increased probabiLity of extreme cLimate events and (2) reduction of the carbon footprint across the vaLue chain.

1)    Mahindra Finance undertook a cLimate change scenario anaLysis for the 1350+ offices of the company to understand impact from extreme cLimate events (fLood, drought and cycLonic events) in a worst-case scenario. The resuLts of the scenario anaLysis were pubLished in the previous Integrated Report and a comprehensive cLimate action pLan was deveLoped in-house for offices in highLy prone areas. The action pLan defines processes for stabiLizing existing office structures, creating earLy warning systems for cLimate hazards, estabLishing disaster management infrastructure and integrating cLimate hazard risk in the audit checkLists for new faciLities and periodic audits.

Mahindra Finance has aLso initiated a study to map the existing vehicLe and tractor financing portfoLio with cLimate hazard prone areas. The piLot study wiLL be integrated into the FY2026 cLimate strategy to de-risk the company from increased cases of defauLt and non-performing assets due to extreme cLimate events. The piLot study wiLL then be roLLed out for other business verticaLs of Mahindra Finance.

2)    The Long-term targets for reduction of the carbon footprint across the vaLue chain was decLared through Science Based Targets Initiative (SBTi) in FY2023 and defined in the previous Integrated Report. The targets focus on a 50.4% reduction in direct emissions (Scope 1) and indirect emissions (Scope 2) as of FY2032 compared to the baseLine vaLues determined in FY2023. The targets aLso incLude a 58.1% reduction in indirect emissions (Scope 3) across the same timeLine for specific activities in the vaLue chain - purchased goods

and services, business traveL, empLoyee commute, waste generation, and purchased capitaL goods. SustainabiLity initiatives in FY2025 focused primariLy on waste reduction through 100% recycLing of waste streams and energy transition that has resuLted in a ~20% reduction of energy usage compared to FY2023 baseLine vaLues. The efforts have resuLted in a net reduction of absoLute scope emissions (scope 1-3) by 11,300+ tonnes CO₂ compared to previous year.

Innovative Energy Transition

Mahindra Finance has buiLt on the energy reduction initiatives that had been commissioned in FY2023 incLuding 100% conversion to Light emitting diodes (L.E.D.), procurement of 5* energy saving air conditioners, soLar-powered air conditioners, and instaLLation of brushLess DC motor (BLDC) fans. A piLot program for the purchase of green energy at the Mahindra Finance corporate office in KurLa, Mumbai was initiated in November 2024 with intentions to expand across other Mahindra Finance offices in Locations where the reguLatory Landscape permits the purchase of green tariffs. The above energy initiatives have contributed to reduced energy costs, reduced emissions from purchase of grid-based energy (Scope 2) and use of newer safer technoLogy in active office buiLdings.

Inclusive Policies

Mahindra Finance announced its membership to the United Nations GLobaL Compact (UNGC) in FY2024 to show its commitment to human rights, good working conditions and ethicaL practices in the workpLace. In FY2025, a Human Rights Due DiLigence (HRDD) study was commissioned to evaLuate the human rights poLicies and procedures, conduct consuLtations with empLoyees across LeveLs to determine on-ground impLementation of these procedures, review efficacy of data privacy programs and extension of the above to major suppLiers in the vaLue chain. The resuLts of the study wiLL be impLemented in FY2026 to strengthen the human rights process across the Mahindra Finance vaLue chain.

Training programs on the human rights topics was expanded to the entire workforce in FY2025 incLuding the incorporation of these topics in the empLoyee induction and refresher programs. Diversity, equity & incLusion (DE&I) programs were expanded in FY2025 to incLude impactfuL gender representation initiatives, LocaLized EmpLoyee Resource Groups (ERGs), progressive poLicies fostering workpLace equity, and focused empLoyee sensitization efforts to promote an incLusive cuLture.

Looking Forward to FY2026 on Sustainability

The focus of FY2026 is to buiLd on sustain ability initiatives that have commissioned in FY2025 and to better integrate sustainabiLity into the business operations. A dedicated sustainability department has been created in FY2025 to ensure adequate allocation of resources for the long-term sustainability vision and to increase senior management oversight on the topic. The mandate of the CSR board sub-committee has been expanded in the latter half of FY2025 to incorporate updates on the sustainability performance of the company and to approve sustainability policies and procedures. Operational committees with key departments including HR, risk and finance are being formulated in FY2026 to ensure integration of sustainability topics in day-to-day management. The process of integrating Environment, Social and Governance (ESG) risk management into the business loan cycle is being developed to align with global expectations on a sustainable investment strategy.

A big focus of the next financial year is to align with the Mahindra Rise commitment of "Making Sustainability Personal” by creating training and capacity building programs for internal and external stakeholders to better understand and integrate sustainability in business as usual. Standard Operating Procedures ('SOPs') and digital tools are being evaluated to standardize sustainability reporting methodologies and ease the process of data gathering and reporting. Training programs are being developed in parallel for department heads to understand global trends in sustainability and to be able to efficiently integrate the topic in their functional responsibilities on a day-today basis.

Social Initiatives - Diversity, Equity, and Inclusion ("DE&I")

Diversity, Equity, and Inclusion (DE&I) remain central to Mahindra Finance's vision of fostering a workplace that values and empowers every individual. In FY2025, focused efforts were made to address gender gaps, promote equity, and embed inclusive practices across the organization, with a commitment to continued progress in the years ahead.

¦ Empowering Women:

Initiatives like Prarambh provided specialized training to women from Tier III and Tier IV cities, resulting in over 150 hires in frontline roles. The SOAR Program enabled women professionals to return to impactful roles after career breaks with support enabled through carefully crafted mechanisms. Focused recruitment drives across

50+ locations introduced diverse talent into key positions across branches.

¦    Progressive Policies:

Policies such as maternity transition support, IVF reimbursement, menstrual wellness, caregiving assistance, and gig working opportunities were enhanced to create equitable opportunities and address the evolving needs of the workforce.

¦    Fostering inclusion:

Inclusion-focused programs like MWoW (Mahindra Finance World of Women) established 7 regional ERGs to address hyper-local challenges and create platforms for growth and engagement. Initiatives like Perspective Building, Spectrum'24 - Inclusion Week, which engaged over 5,000 employees, and sensitization workshops such as Beat the Bias, Leading as an Ally, drove awareness and allyship across teams.

¦    Recognition and Future focus:

Mahindra Finance was awarded the Mahindra Group Rise Award for its DE&I efforts. Participation in forums and thought leadership platforms reinforced the organization's commitment to driving systemic change and fostering inclusive growth.

Looking ahead, DE&I will continue to be a key focus area, with plans to scale initiatives, deepen impact, and build a workplace that reflects Mahindra Finance's purpose-driven approach to empowering lives and communities.

Stakeholder Engagement

A stakeholder engagement program has been defined and disclosed in the previous Integrated Reports. During FY2025, the stakeholder engagement program focused on two stakeholder groups namely, local communities and customer interface teams.

Mahindra Finance understands the importance of effectively managing the customers and provide a seamless experience. To address this the Company has undertaken strong steps in call centre management, which is now available 365 days (except national holidays) and serves 10 different languages. Your Company has also undertaken skill upgradation training programs for customer facing staffs to help address queries seamlessly. A dedicated centralised resolution team has also been created to provide bureau related concerns with less turnaround time. Through these initiatives, your Company aims to increase the customer satisfaction index and address customer queries in a shorter period of time.

Business Responsibility and Sustainability Report

Your Company continued to uphold a high standard of regulatory compliance and transparency through disclosure of sustainability initiatives in the public domain. In compliance with Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has disclosed its Business Responsibility and Sustainability Report ("BRSR”) for the previous two financial years as part of its Integrated Report ("IR”). Your Company has increasingly disclosed data on 'leadership indicators' in BRSR over the last three years and is currently reporting on all leadership parameters defined in the nine principles of 'BRSR Section C Principle Wise Performance Disclosure.'

Your Company subscribes to the Dow Jones Sustainability Index ("DJSI”) program where it has achieved a score of '50' in FY2024 that is best-in-class when compared to other listed NBFCs in India.

Governance

Your Company's sustainability team has foflowed two environmental and social (E&S) scorecard methodologies in FY2025 - risk management and outcome-based performance matrices. The E&S risk management scorecard has been integrated into the Internal Capacity Adequacy Assessment Process (ICAAP) with modules related to ESG policy, sustainability roadmap, exclusion list principles, carbon reduction, energy transition, climate transition risk management and audit scope parameters. Additionally, a business scorecard is developed for the sustainability team that focuses on scope emission reduction targets, supply chain engagement and Mahindra Group collaboration. The score from the above processes is also integrated into the CXO compensation matrix for the financial year to ensure senior management oversight on sustainability issues.

Your Company engages with the larger Mahindra Group resources through a quarterly 'Sustainability Council' where challenges and opportunities across the group are discussed and commonalities are jointly addressed. The Sustainability Council also provides an opportunity for cross-training of sustainability personnel and sharing of case studies. An independent agency within Mahindra Group - Mahindra Institute of Quality (MIQ), independently reviews the performance of Mahindra Finance sustainability policies and procedures.

Integrated Reporting

Your Company is pleased to present its holistic performance for FY2025, in the Integrated Report of the Company. This report includes details such as

the organisation's strategy, governance framework, performance and prospects of value creation based on the six capitals- Financial, Manufactured, Intellectual, Human, Social & Relationship and Natural capital.

Corporate Social Responsibility (CSR)

Established in 1991, Mahindra Finance, a leading NBFC is a proud partner of India's growth, taking financial services to the farthest corners of the country. We are continually adapting to the evolving needs of our customers, leveraging technology and our strategic partnerships to widen the ambit of and access to financial services while remaining committed to our social responsibility. Led by our #TogetherWeRise ethos, we build abiding relationships of trust with our communities and strives to become an asset in the communities where we operate. Your Company's Corporate Social Responsibility (CSR) initiatives focus on areas, namely Education & Livelihood, Healthcare and Environment. We believe in providing opportunities to the underprivileged communities to enable them to rise by designing the areas of interventions that are aligned with the Company's purpose to drive positive change in the lives of our communities. Together, we are paving the way for a brighter tomorrow for all.

1. CSR Committee

Your Company has duly constituted a CSR Committee in accordance with Section 135 of the Companies Act, 2013 to assist the Board and the Company in fulfilling the corporate social responsibility objectives of the Company. The Committee presently comprises of the following Directors as on 31^st March 2025:

Name	Category
Mr. Diwakar Gupta (Chairperson)*	Independent Director
Mr. Vijay Kumar Sharma**	Independent Director
Mr. Raul Rebello***	Managing Director & CEO

* Mr. Dhananjay Mungale ceased to be member and the Chairperson of the CSR Committee with effect from 23^rd July 2024. Mr. Diwakar Gupta was appointed as the member and the Chairperson of the Committee with effect from 24^th July 2024.

** Mrs. Rama Bijapurkar ceased to be member of the CSR Committee with effect from 23^rd July 2024. Mr. Vijay Kumar Sharma was appointed as the member of the Committee with effect from 24^th July 2024.

*** Mr. Ramesh Iyer ceased to be member of the Committee upon superannuation with effect from 29^th April 2024. Mr. Raul Rebello was inducted as the member of the Committee with effect from 30^th April 2024.

• During the year under review, 3 CSR Committee Meetings were heLd, details of which are provided in the Corporate Governance Report. The CSR Committee inter-aLia, reviews and monitors the CSR as weLL as BRSR activities. During the year under review, the terms of reference of CSR Committee were enhanced to specificaLLy include enhanced review of Environment, Social and Governance aspects ("ESG”).

2.    CSR Policy

The CSR PoLicy outLines the approach and guidance provided by the Board, basis recommendation of CSR Committee, for undertaking CSR Projects and Lays down the guiding principles for seLecting, implementing and monitoring CSR projects incLuding AnnuaL Action PLan. The PoLicy outLines CSR thrust areas, which aLign with the Mahindra group core purpose of driving positive change in the Lives of the communities. Company endeavors to create sociaL, economic and environmentaL change by investing in projects that promotes education, skiLL training, heaLth care, sanitation, environmentaL sustainabiLity, financiaL Literacy etc.

The CSR PoLicy incLuding a brief overview of the projects or programs undertaken by the Company can be accessed the same on the website of the Company at:

https: // www.mahindrafinance.com/ investor-reLations/poLicy-and-sharehoLder-information#mmfsL-poLicies

3.    CSR Initiatives

Key CSR Achievements for FY2025

(i) 'Dhan Samvaad'- CSR Flagship Program

Your Company has Launched CSR flagship program "Dhan Samvaad” which addresses a criticaL need among gig workers and nano, micro-enterprises, who often Lack access to formaL financiaL education and digitaL tooLs. By bridging this knowLedge gap, the initiative aims to foster financiaL incLusion and enhance the economic resiLience of this vitaL segment of the workforce.

The comprehensive program covers a wide range of topics, incLuding banking basics, savings strategies, e-waLLet usage, investment fundamentaLs, insurance principLes, and key government schemes. Through a combination of interactive workshops, onLine moduLes, and hands-on training, participants gained practicaL skiLLs to manage their finances effectiveLy in the digitaL era.

The program aLso focused on raising awareness as weLL as increased Linkages about reLevant centraL and state LeveL government schemes for amongst targeted beneficiaries whiLe providing information and hands-on support for using digitaL tooLs Like Digi Locker.

Dhan Samvaad is a significant effort to empower individuaLs and smaLL businesses with the financiaL knowLedge necessary for sustainabLe deveLopment. This program pLayed a cruciaL roLe in creating a more financiaLLy savvy and digitaLLy empowered community, uLtimateLy contributing to India's economic progress. Resources used during the program are aLigned with the Reserve Bank of India (RBI)'s FinanciaL IncLusion and DeveLopment program.

Major highLights of the Dhan Samvaad program incLudes,

¦    TotaL outreach - 2,07,700+ beneficiaries educated on financiaL and digitaL Literacy, boosting their digitaL and financiaL skiLLs

¦    77,800+ of the totaL outreach (37%) are Women Entrepreneurs: EnabLing Women Entrepreneurs

¦    1,57,000+ (76%) individuaLs enhanced digitaL identity by adopting the Digi Locker app.

¦    1,37,000+ (66%) individuaLs were Linked with different Government sociaL security schemes nameLy PMSBY, PMJJBY, E- Shram Card, Sukanya Samriddhi Yojna, Udyam Registration, AtaL Pension Yojana etc.

¦    Covered 40+ Districts, 7 States reaching diverse communities.

(ii) Saksham Scholarship Project

Saksham SchoLarship for underpriviLeged students is an initiative to provide financiaL assistance to underpriviLeged chiLdren to support them in continuing their education.

The project beLieves in empowering the academic and career goaLs of chiLdren by removing the financiaL barrier. The schoLarship is open for students from muLtipLe states across India. Students studying in CLasses 1 to 12, graduation, and post-graduation LeveLs are eLigibLe. In FY2025, your Company provided Saksham SchoLarship to around 2,960+ schoLars.

(iii)    E/Auto Rickshaw driving training for women

Your Company continued E/Auto Rickshaw driving training for women. Under this project, eLigibLe women were supported with skiLL training to drive an auto/ E auto/ UtiLity vehicLe and heLp them obtain LiveLihood opportunities. ALong with the vehicLe driving skiLLs, women were supported to obtain driving Licenses. SeLf-defence skiLLs, interpersonaL skiLLs and financiaL and digitaL skiLLs were aLso imparted as part of this project. Further women were encouraged to take to the jobs as chauffeurs and seLf-empLoyment.

In FY2025, your Company trained 550+ women through this project from Madhya Pradesh, TamiL Nadu and Puducherry. These women received permanent driving License aLong with LeveL 4 SkiLL India Certificate and pLacement Linkages.

(iv)    Employability skills training project

This project creates a cadre of workforce with essentiaL empLoyabiLity skiLLs incLuding domain knowLedge and soft skiLLs. Provided skiLL training to youth for BCBF (Business Correspondent & Business FaciLitator) and iTES-BPO (Information TechnoLogy EnabLed Services) and make them job ready and resiLient for the future and improve their LiveLihood.

In FY2025, your Company provided empLoyabiLity skiLLs training to 210+ candidates in Mumbai, Maharashtra aLong with pLacement Linkages to 170+ candidates.

(v)    Nanhi Kali

Project Nanhi KaLi provides skiLLs training to girLs studying in Grades 6 to 10 thereby heLping them to make a smoother transition from schooL to the workpLace.

The program focuses on honing essentiaL skiLLs, encompassing financiaL Literacy, digitaL skiLLs, soft skiLLs such as criticaL thinking and communication, and fostering an understanding of gender reLations. This wiLL be deLivered during schooL hours.

It aLso focuses on physicaL education moduLes wherein a professionaLLy designed sports education moduLe excLusiveLy for girLs gives them an opportunity to participate in reguLar fitness activities thereby promoting their weLLbeing. The program further heLps buiLd Leadership skiLLs and teamwork whiLe striving for exceLLence through sports.

Your Company supported the education of 14,630 Nanhi KaLis from Secondary schooL (CLass 6 to 10)

for the academic year 2024-25 across 12 districts from 5 states in India.

(vi)    Mahindra Pride Classroom (MPC)

Your Company continued its support to Mahindra Pride CLassroom (MPC) project to reach out to marginaLised women to create job opportunities in various sectors and enabLe women to become financiaLLy independent and participate activeLy in the workforce.

Under this program, we conducted minimum 40 hours training for 47,800+ finaL year femaLe students in cLassrooms across government/ government aided coLLeges, poLytechnics, industriaL training institutions, empLoyer premises etc. to enhance their empLoyabiLity prospects. The moduLar MPC training program focusses on Life, Language and aptitude skiLLs. To faciLitate students who have been trained in the MPC are pLaced with organizations working in their core trade/ domain an innovative, tech-enabLed job drive, known as 'Job Utsav' is conducted to bring together the best empLoyers and a great taLent pooL trained under the MPC program.

(vii)    Mahindra Pride Skill centers (MPSC)

You Company continued its support to MPSC which are specificaLLy designed to economicaLLy empower women through training in domain and empLoyabiLity skiLLs. The major trades covered are ITES, retaiL, hospitaLity, BFSI and other sectors. By addressing the unique requirements of the job market and emphasizing the deveLopment of both technicaL and soft skiLLs, the modeL aims to equip women with the knowLedge, skiLLs and confidence needed to succeed in their careers. As part of this initiative, 1,000 women were trained under IT / ITES, retaiL, coding, hospitaLity, TaLLy, IT & GST and 80% of the trained women supported in securing a gainfuL empLoyment.

(viii)    Project Hariyali

With an aim of sustainabLe environment, your Company promoted pLantation of trees which provides green cover as weLL source of LiveLihood to farmers/LocaL communities.

In FY2025, your Company pLanted 77,000 sampLings on around 570 farmer's Land from 30 viLLages in two districts in Gujarat. The pLantation incLudes a mix of native and fast-growing species Like Teak, Mahagony, Bamboo, Drumstick, AonaLa, Mango, Neem etc. which enhance carbon sequestration and improve LocaL biodiversity.

Additionally, it provides income sources for small and marginal, farmers through sustainable forestry. Further it engages communities in environmental stewardship and raises awareness about climate change.

Also, your Company supported the maintenance (nurturing and caring) and survival, of previously planted saplings in the Financial Year 2023-24 and 2022-23 as part of Project Hariyali in the Araku region, Andhra Pradesh.

(ix)    Water Conservation Project

As part of Environmental Sustainability, your Company has been championing the water conservation cause over 3 years in the remote tribal areas of Murbad and Shahapur blocks in Thane district, Maharashtra. Through these consistent efforts, over 8.7 crore litres of water have been conserved, ensuring access to water for household and agriculture purpose, enabling farmers to take multiple crops.

In FY2025, your Company made Investment in sustainable water resource management projects such as construction of 11 Rainwater Harvesting Structures in zilla parishad schools conserving over 0.46 crore Liters of water. Built/repaired 3 check dams and desilting of a Lake, creating potential to save over 2.45 crore liters of water in the surrounding areas. Through this project, we expect to consere 2.91 crore litres of rainwater for irrigation, ensuring water accessibility round the year for household and farming purpose, thus enabling farmers to take up 2-3 crops in a year and supporting 2,800 beneficiaries.

(x)    Project Sehat

In the area of healthcare, your Company organized nationwide blood donation drives in which 4,279+ Blood Units were collected, Pan India. Your Company also conducted 2 health camps, benefiting 300 individuals.

Employees Volunteering

Your Company has consistently fostered a culture of social responsibility by encouraging employees to actively participate in diverse CSR initiatives, driving meaningful change within the community. During the reporting period, over 23,250 employees—an impressive 91% of the workforce—dedicated more than 1,10,600 person-hours to numerous impactful virtual and physical CSR initiatives. These initiatives included life-saving Blood Donation drives, transformative Swachh Bharat campaigns, and empowering programs like Samantar, Sehat, and Gyandeep. Through these efforts, your

company has reaffirmed its unwavering commitment to creating a positive and lasting impact on society.

Stakeholder Engagement - In FY2025, your company organized the "Partner Meet” on 11^th February 2025, bringing together 28 representatives from 15 implementation partners for a day dedicated to collaboration, networking, and knowledge sharing. This impactful stakeholder engagement provided an invaluable opportunity to strengthen partnerships, interact with senior management, and exchange best practices among diverse implementation partners, fostering collective growth and innovation.

During the event, your Company celebrated excellence by honoring four of its partners (NGOs) with the prestigious title of "Best CSR Implementation Partners 2025,” while extending tokens of appreciation to the remaining partners, acknowledging their remarkable contributions. Furthermore, the meet featured a capacity-building workshop on "Appreciative Inquiry -A Tool for Personal and Organizational Effectiveness,” equipping attendees with transformative strategies to enhance their impact. This initiative underscores your company's unwavering commitment to driving meaningful collaboration and empowering its partners to achieve greater success in CSR implementation.

4.    CSR Spend

As per the provisions of Section 135 of the Companies Act, 2013 ("the Act”) read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules”), the mandatory CSR spend of the Company for FY2025 was ' 34.58 Crore against which your Company has spent ' 34.61 Crore during the year. Your Company has fully spent unspent CSR amount of FY 2024 towards ongoing program on Financial & Digital Literacy Project., details whereby are given in "Annexure I" of this report.

Further, in terms of the CSR Rules, the Chief Financial Officer of the Company has certified that the funds disbursed have utilised for the purpose and in the manner approved by the Board for FY2025.

5.    Annual Report on CSR Activities

The Annual Report on the CSR activities undertaken by your Company during the year under review, as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is set out in "Annexure I" of this Report.

6.    Impact Assessment of CSR Projects

In compliance with the provisions of Section 135 of the Companies Act 2013 read with sub-rule (3) of rule 8 of the Companies (Corporate Social Responsibility

Policy) Rules, 2014, impact assessment has been carried out for the following eligible projects:

CSR projects pertaining to FY2022 requiring Impact Assessment

¦    Nanhi Kali

¦    Mahindra Pride School & Classrooms

¦    Women economic empowerment

CSR projects pertaining to FY2023 requiring Impact Assessment

¦    Swabhimaan

Your Company had engaged independent agencies to carry out the impact assessment for the aforesaid projects. The Executive Summary of the Impact Assessment Reports, with respect to the abovementioned eligible CSR projects of FY2022 and FY2023, is annexed with "Annexure I" of this Report and the complete Impact Assessment Report of the applicable projects can be accessed at the web-link https://www.mahindrafinance.com/ together-we-rise#csr-reports.

Additionally, your Company has been proactively conducting an impact assessments of the selected CSR projects on a voluntary basis to evaluate the effectiveness. As a testament to its commitment to exemplary corporate governance, the Company also undertakes voluntary financial audits to ensure transparency and accountability.

The executive summary and web-links of impact assessment reports with respect to Company's CSR projects undertaken in FY2024 which meet the prescribed criteria, will be provided once the same are completed.

Cyber Security

Your Company has made significant strides in bolstering organization's cybersecurity framework to safeguard both internal and customer data. In an era where digital threats are increasingly sophisticated, we have prioritized the implementation of robust measures to ensure the integrity, confidentiality, and availability of critical information assets.

To enhance your organization's defence, we have deployed a suite of advanced cybersecurity tools tailored to address current and evolving risks. These include systems to prevent unauthorized data exfiltration, comprehensive threat detection and response mechanisms, real-time monitoring and analysis solutions, protective measures for our online assets, and solutions to secure our mobile endpoints. These tools collectively form a multi-layered shield around our digital infrastructure and processes.

In addition, your Company has established a 24/7 Security Operations Centre (SOC) dedicated to monitoring cybersecurity alerts and responding to incidents immediately to initiate remedial measures.

This ensures that potential threats are identified and mitigated swiftly, minimizing any risk to our operations or data.

Your Company has also significantly improved, organization's vulnerability management process by automating scanning and remediation efforts. By leveraging industry-leading scanning and patching tools, we have streamlined the identification and resolution of vulnerabilities, thereby enhancing our overall security posture.

To validate the effectiveness of these investments, management is also conducting Red Team assessment by an external certified entity. These proactive assessments test your organization's cyber defences under real-world conditions, ensuring that the tools and processes we have implemented deliver the expected resilience and protection.

These enhancements reflect our unwavering commitment to safeguarding the trust placed in us by our customers, partners, and you, our shareholders.

Annual Return

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with rule 11 and 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return in Form No. MGT-7, is available on the Company's website and can be accessed at the web-link https://www.mahindrafinance.com/investor-relations/financial-information#annual-reports .

Board & Its Committees Board

Your Company recognises and embraces the importance of a diverse Board in its success. The confluence of Directors on the Board with different knowledge and skills, perspective, regional and industry experience, cultural and geographical background ensures that your Company retains its competitive advantage.

As on 31^st March 2025, the Board of your Company consisted of 8 Directors comprising of a Non-Executive Chairperson, 1 Executive Director, 2 Non-Executive NonIndependent Directors and 4 Independent Directors, of whom 1 is a woman Director.

Committees constituted by the Board of Directors

The Board Committees are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

 

The details of the Board Committees aLong with their composition, powers, terms of reference, etc. are given in the Report on Corporate Governance, which forms part of this Annual Report.

Audit Committee

As on 31^st March 2025, the Audit Committee comprised of 3 Independent Directors and 1 Non-Executive NonIndependent Director:

Name	Category
Mr. Diwakar Gupta	Chairperson of the Committee (Independent Director)
Mr. MiLind Sarwate	Independent Director
Mr. Vijay Kumar Sharma	Independent Director
Mr. Amarjyoti Barua	Non-Executive Non- Independent Director

Changes in Audit Committee Members during FY2025:

¦    Mr. Dhananjay MungaLe, Mrs. Rama Bijapurkar ceased to be Member of the Committee effective 23^rd July 2024 and Mr. Chandrashekhar Bhave ceased to be Chairperson and Member(s) of the Committee effective 2^nd February 2025; upon completion of their 2^nd term as Independent Director(s) of the Company.

¦    Mr. Diwakar Gupta was appointed as Chairperson of the Committee w.e.f 3^rd February 2025.

The composition of Audit Committee is in compliance with the minimum requirement prescribed under the Act, Securities and Exchange board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended and the Master Direction - Reserve Bank of India (Non-Banking FinanciaL Company - ScaLe Based Regulation) Directions, 2023 of having a minimum of two-thirds of independent directors, incLuding the Chairperson. ALL members of the Committee are nonexecutive directors possessing financiaL Literacy, and expertise in accounting or financiaL management reLated matters.

During the year under review, 11 Audit Committee Meetings were heLd. Further, the terms of reference of the Audit Committee were enhanced during the year under review to specificaLLy incLude review of compLiances under RBI directions/ circuLars/ guideLines, review of POSH Report and its poLicy, information security audit/ poLicy etc. ALL the recommendations of the Audit Committee were approved and accepted by the Board during the year under review.

Meetings and Postal Ballot

The Board of Directors met 9 times during the year under review i.e., on 23^rd April 2024, 4^th May 2024, 7^th June 2024, 23^rd JuLy 2024, 13^th September 2024,

22^nd October 2024, 28^th January 2025, 13^th February 2025 and 24^th March 2025, as against the statutory requirement of at Least four meetings. The requisite quorum was present at aLL the Board Meetings. The maximum time gap between any two Meetings was not more than one hundred and twenty days. These Meetings were weLL attended. The 34^th AGM of the Company was heLd on 23^rd JuLy 2024 through Video Conference.

During the year under review, no Extraordinary GeneraL Meeting ("EGM") of the Members was heLd and no resoLution was passed by the Members through PostaL BaLLot.

DetaiLed information on the Meetings of the Board, its Committees, and the AGM is incLuded in the Report on Corporate Governance, which forms part of this AnnuaL Report.

A caLendar of aLL the meetings is prepared and circuLated weLL in advance to the Directors.

Meetings of Independent Directors

The Independent Directors met twice during the year under review, on 24^th September 2024 and 24^th March 2025. The Meetings were conducted without presence of the WhoLe-time Director(s), the NonExecutive Non-Independent Directors, Chief FinanciaL Officer or any other Management PersonneL to enabLe the Independent Directors to discuss matters pertaining to, inter-aLia, review of performance of NonIndependent Directors and the Board as a whoLe, review the performance of the Chairperson of the Company, assess the quaLity, quantity and timeLiness of flow of information between the Company Management & the Board and its Committees and free flow discussion on any matter that is necessary for the Board to effectiveLy and reasonabLy perform their duties.

Directors and Key Managerial Personnel

Appointment/Re-appointment of Directors during FY2025 and up to the date of this report

¦ Re-appointment of Mr. Milind Sarwate (DIN: 00109854) as an Independent Director

Basis approvaL /recommendation of the Nomination and Remuneration Committee ("NRC") and the Board, the members of the Company have at the AnnuaL GeneraL Meeting heLd on 28^th JuLy 2023, approved the re-appointment of MiLind Sarwate (DIN: 00109854) as Independent Director of the Company for a second term of five consecutive years each, commencing from 1^st April 2024 to 31^st March 2029 (both days incLusive) not LiabLe to retire by rotation.

¦    Appointment of Mr. Raul Rebello (DIN: 10052487) as the Managing Director & CEO

Basis recommendation/ approvaL of NRC and the Board of Directors, the Members of the Company had approved appointment of Mr. RauL RebeLLo (DIN: 10052487), as the WhoLe-time Director and KMP designated as Executive Director and MD & CEO-designate with effect from 1^st May 2023 to 29^th ApriL 2024 (both days incLusive) and as the Managing Director & CEO of your Company with effect from 30^th ApriL 2024 up to 30^th April 2028 (both days incLusive), LiabLe to retire by rotation.

Mr. RauL RebeLLo assumed the position of "Managing Director & CEO" of the Company w.e.f., 30^th April 2024, after superannuation of Mr. Ramesh Iyer, Vice-Chairman and Managing Director of the Company effective cLose of business hours of 29^th ApriL 2024.

¦    Appointment of Mr. Vijay Kumar Sharma (DIN: 02449088) as an Independent Director

Pursuant to the recommendation of the NRC and basis approvaL of the Board of Directors of the Company, the members of the Company have at the AnnuaL GeneraL Meeting heLd on 23^rd JuLy 2024, approved appointment of Mr. Vijay Kumar Sharma (DIN: 02449088) as an Independent Director for a term of 5 consecutive years with effect from 15^th May 2024 to 14^th May 2029 (both days incLusive), not LiabLe to retire by rotation.

Cessation of Directors

¦    Upon attaining superannuation, Mr. Ramesh Iyer (DIN: 00220759) ceased to be the Vice-Chairman & Managing Director of your Company effective cLose of business hours of 29^th ApriL 2024.

¦    Mr. Dhananjay MungaLe, (DIN: 00007563) and Mrs. Rama Bijapurkar (DIN: 00001835) ceased to be Independent Director(s) of your Company effective cLose of business hours of 23^rd JuLy

2024,    upon compLetion of their second term of 5 consecutive years each as Independent Director(s) of the Company.

¦    Mr. Chandrashekhar Bhave (DIN: 00059856) ceased to be the Independent Director of your Company effective cLose of business hours of 2^nd February

2025,    upon compLetion of his second term of 5 consecutive years each as an Independent Director of the Company.

The Board of Directors pLaces on record its deepest appreciation for the exempLary contribution, strategic foresight, innovative thinking, and steadfast commitment to exceLLence of Mr. Ramesh Iyer, which

propeLLed Mahindra Finance to great heights. The Board is confident that the Company wiLL continue its growth trajectory under the abLe Leadership of Mr. RauL RebeLLo, Managing Director & CEO.

The Board aLso pLaces on record its sincere appreciation to the vaLuabLe contribution made by Mr. Dhananjay MungaLe, Mrs. Rama Bijapurkar and Mr. Chandrashekhar Bhave during their association as Independent Directors.

During the year under review, no Independent Director of your Company resigned from the Company.

Retirement by Rotation

In terms of provisions of Section 152 of the Companies Act, 2013, Mr. Ashwani Ghai (DIN: 09733798), NonExecutive Non-Independent Director is LiabLe to retire by rotation and, being eLigibLe, has offered himseLf for re-appointment at the 35^th AnnuaL GeneraL Meeting of the Company scheduLed to be heLd on 22^nd JuLy 2025.

Re-appointment of Independent Directors

The first term of Dr. Rebecca Nugent (DIN: 09033085) as an Independent Director of the Company wiLL expire on 4^th March 2026. She is eLigibLe and has consented for re-appointment as an Independent Director for a second term of 5 consecutive years. Dr. Nugent has undertaken the onLine proficiency seLf-assessment test.

Basis the performance evaLuation report, skiLL sets, experience and substantiaL contribution made by Dr. Nugent during her 1^st term, the Board is of the opinion that Dr. Nugent hoLds high standards of integrity, expertise and experience (incLuding the proficiency). Basis recommendation of NRC, the Board of Directors have subject to approvaL of the members of the Company re-appointed Dr. Rebecca Nugent (DIN: 09033085), as an Independent Director of the Company for a second term of 5 consecutive years, w.e.f. 5^th March 2026 to 4^th March 2031 (both days incLusive), not LiabLe to retire by rotation. The necessary resoLution seeking approvaL of the members of the Company has been incorporated in the Notice of the 35^th AnnuaL GeneraL Meeting.

Fit and Proper and Non-Disqualification declaration by Directors

ALL the Directors of the Company have provided annuaL confirmation that they satisfy the "fit and proper" criteria as prescribed under Chapter XI of RBI Master Direction No. RBI/DoR/2023-24/106 DoR. FIN.REC. No.45/03.10.119/2023-24 dated 19^th October 2023, as amended, and that they are not disquaLified from being appointed/continuing as Directors in terms of Section 164 (1) and (2) of the Companies Act, 2013.

Declaration by Independent Directors

ALL the Independent Directors of your Company have given their declarations and confirmation that they fulfil the criteria of Independence as prescribed under Section 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their abiLity to discharge their duties with an objective independent judgment and without any external influence.

Further, the Board after taking these declarations/ disclosures on record and acknowledging the veracity of the same, concluded that the Independent Directors hold highest standards of integrity and possess the relevant proficiency, expertise and experience to quaLify and continue as Independent Directors of the Company and are Independent of the Management of the Company.

In terms of Section 150 of the Companies Act, 2013 read with RuLe 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by Indian Institute of Corporate Affairs, Manesar ('IICA') and the said registration is renewed and active as on the date of this report. Further, the said registration wiLL be renewed, before expiry as appLicabLe, and kept active by the Independent Directors.

The Independent Directors of the Company are either exempted from the requirement to undertake the onLine proficiency seLf-assessment test conducted by IICA or have cLeared the onLine proficiency seLf-assessment test as appLicabLe.

Key Managerial Personnel

The foLLowing persons were designated as the Key ManageriaL PersonneL ("KMP”) of your 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, as on 31^st March 2025:

1.    Mr. RauL RebeLLo, Managing Director & CEO

2.    Mr. Pradeep Kumar AgrawaL, Chief FinanciaL Officer

3.    Ms. BrijbaLa BatwaL, Company Secretary

Changes in Key Managerial Personnel

¦ Mr. Ramesh Iyer ceased to be the Vice-Chairman & Managing Director of your Company on attaining superannuation with effect from cLose of business hours of 29^th ApriL 2024.

 

Laws and that such systems were adequate and operating effectiveLy during the financiaL year ended 31^st March 2025;

Performance Evaluation of the Board

The Companies Act, 2013 ("Act”) and the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations”) stipuLate the evaLuation of the performance of the Board, its Committees, IndividuaL Directors and the Chairperson.

Your Company has formuLated a process for performance evaLuation of the Independent Directors,

 

¦    Mr. RauL RebeLLo ceased to be the Executive Director and MD & CEO Designate with effect from 29^th ApriL 2024 and assumed the office of Managing Director & CEO with effect from 30^th ApriL 2024.

¦    Mr. Vivek Karve resigned from the office of Chief FinanciaL Officer and Key ManageriaL PersonneL ("KMP”) of the Company with effect from cLose of business hours of 31^st October 2024 to pursue personaL, sociaL and professionaL interest beyond fuLL time empLoyment.

¦    In compLiance with ReguLation 26A(2) of the Listing ReguLations, Mr. Animesh Chatterjee was appointed as the Chief FinanciaL and KMP, for interim period i.e. from 29^th January 2025 tiLL 4^th March 2025.

¦    Mr. Pradeep Kumar AgrawaL was appointed as the Chief FinanciaL Officer of the Company effective 5^th March 2025.

Directors' Responsibility Statement

Pursuant to the provisions of Section 134(5) of the

Companies Act, 2013, ("the Act”) your Directors, based

on the representations received from the Operating

Management and after due enquiry, confirm that:

i.    In the preparation of the annuaL accounts for financiaL year ended 31^st March 2025, the appLicabLe accounting standards have been foLLowed and there are no materiaL departures in adoption of these standards;

ii.    They had in consultation with the Statutory Auditors seLected such accounting poLicies and appLied them consistentLy and made judgments and estimates that are reasonabLe and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March 2025 and of the profit of the Company for the year;

iii.    They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irreguLarities;

iv.    They have prepared the annuaL accounts for financiaL year ended 31^st March 2025 on a going concern basis;

v.    They have Laid down adequate internaL financiaL controLs to be foLLowed by the Company and that such internaL financiaL controLs were operating effectiveLy during the financiaL year ended 31^st March 2025;

vi.    They have devised proper systems to ensure compLiance with provisions of aLL appLicabLe

the Board, its Committees and other IndividuaL Directors which incLudes criteria for performance evaLuation of the Non-Executive Directors and Executive Directors.

An annuaL performance evaLuation exercise was carried out in compLiance with the appLicabLe provisions of the Act, Listing ReguLations, the Company's Code of Independent Directors and the criteria and methodoLogy of performance evaLuation approved by the Nomination and Remuneration Committee ("NRC") comprising of Mr. Diwakar Gupta as the Chairperson and Dr. Anish Shah, Mr. MiLind Sarwate and Mr. Vijay Kumar Sharma as its members:

The questionnaires for performance evaluation are comprehensive and in alignment with the guidance note on Board evaluation issued by the SEBI, vide its circular no. SEBI/HO/CFD/CMD/CIR/P/2017/004 dated 5^th January 2017 as amended and merged with SEBI Master Circular dated November 11, 2024 and are in line with the criteria and methodology of performance evaluation approved by the NRC.

Outcome and results of the performance evaluation

All the Directors of your Company as on 31^st March 2025 participated in the evaluation process. The Directors expressed their satisfaction with the Evaluation process. During the year under review, NRC ascertained and reconfirmed that the deployment of "questionnaire” as a methodology, is effective for evaluation of performance of Board and Committees and Individual Directors.

The evaluation outcomes for the year under review were deliberated upon at length with the Board members, Committee Chairpersons and Individual Directors. The results underscore a good level of engagement and diligence by the Board and its various committees, and by the senior leadership.

It was noted that the Board and Committee meetings are meticulously planned and conducted with efficiency, in terms of comprehensive pre-reads being sent well in advance, and constructive participation and deliberations at the meeting led by the Chair. This enabled the Board and Committees to discharge their role effectively and focus on governance and internal controls.

During the year under review, the terms of reference of the Board and Committees were revisited with a view to aligning the same with regulatory expectations, and best group and industry practices, so as to bring renewed focus on review matters.

Board members were appreciative that during the year under review, the Board and its Committees performed their role well, particularly in the areas of financial discipline, strategic direction, compliances, succession planning and performance review. Based on the outcome of the evaluation of the year under review, the Board has agreed to deepen its focus on ESG, risk management and oversight of subsidiaries, with continued focus on maintaining high standards of performance and governance, to enhance the value for all its stakeholders.

Familiarisation Programme for Directors

Your Company has adopted a structured programme for orientation of all Directors including the Independent Directors so as to familiarise them with the Company-its operations, business, industry, environment in which it

functions, Indian and global macro-economic front and the regulatory regime applicable to it. The Management updates the Board Members on a continuing basis of any significant changes therein and provides them an insight to their expected roles and responsibilities so as to be in a position to take well-informed and timely decisions and contribute significantly to the Company. The Directors are provided with all the documents to enable them to have a better understanding of the Company, its operations and the industry in which it operates.

The Independent Directors of your 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. The terms of reference of all the Committees with updations, if any, are shared with all the Board Members on a quarterly basis. Independent Directors meet the business and functional heads and provide their inputs and suggestions on strategic and operational matters at the quarterly Board/Committee Meetings.

Managing Director and Senior Management provide an overview of the operations and familiarise the Directors on matters related to the Company's values and commitments. They are also introduced to the organisation structure, constitution of various committees, board procedures, risk management strategies etc.

Strategic Presentations are made to the Board where Directors get an opportunity to interact with Senior Management. Directors are also informed of the various developments in the Company through Press Releases, emails, etc. Your Company has a secured Board portal which inter-alia provides a one stop and seamless solution for access to Board/Committee materials to all the Directors. The Board portal also contains Annual Report, Code of Conduct for Directors, terms of appointment, committee charters etc. for ease of access. This enables greater transparency to the Board processes.

Pursuant to the provisions of the Companies Act, 2013 and Regulation 25(7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations”), your Company has during the year conducted familiarization programmes through briefings at Board/ Committee meetings for all its Directors including Independent Directors.

Details of familiarization programs imparted to the Independent Directors during the financial year under review in accordance with the requirements of the Listing Regulations are available on the Company's website and can be accessed at the web-link: https://

www.mahindrafinance.com/investor-relations/policy-and-shareholder-information#familiari7ation-program and is also provided in the Corporate Governance Report forming part of this Annual Report.

Policies on Appointment of Directors and Senior Management and Remuneration of Directors, Key Managerial Personnel and Employees:

i)    Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management

In accordance with the provisions of Section 134(3)(e) of the Companies Act, 2013 ("the Act”) read with Section 178 of the Act and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations”), your Company has adopted a Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management, which, inter-alia, includes the criteria for determining qualifications, positive attributes and independence of Directors, succession planning for Directors and Senior Management, and the Talent Management framework of the Company.

During the year under review, the Policy was amended to, inter-alia align with the amendments in the Listing Regulations.

The said policy is available on the website of the Company and can be accessed at https://www. mahindrafinance.com/investor-relations/policy-and-shareholder-information#mmfsl-policies .

ii)    Policy on Remuneration of Directors and Remuneration Policy for Key Managerial Personnel, Senior Management and other Employees of the Company

Your Company has also adopted the Policy on Remuneration of Directors and the Policy on Remuneration of Key Managerial Personnel, Senior Management and other Employees of the Company in accordance with the provisions of sub-section (4) of Section 178 of the Act, Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 and Listing Regulations.

During the year under review the Policy on Remuneration of Directors of the Company was amended to, inter-alia, align with existing legal provisions, introduce certain standard clauses for better articulation.

The Remuneration Policy for Key Managerial Personnel, Senior Management and other employees was amended during the year under review to inter-alia, align with the amendments in the Listing Regulations, and provide flexibility in compensation structuring.

The said Policies are uploaded on the website of the Company and can be accessed at: https://www. mahindrafinance.com/investor-relations/policy-and-shareholder-information#mmfsl-policies

Adequacy of Internal Financial Controls with Reference to the Financial Statements

Your Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations.

Your Company uses various industry standard systems to enable, empower and engender businesses and also to maintain its Books of Accounts. The transactional controls built into these systems ensure appropriate segregation of duties, the appropriate level of approval mechanisms and maintenance of supporting records. The systems, Standard Operating Procedures and controls are reviewed by the Management.

Your Company's Internal Financial Controls are deployed through Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organisations of the Treadway Commission ("COSO”), that addresses material risks in your Company's operations and financial reporting objectives. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting ("ICFR”) issued by The Institute of Chartered Accountants of India. The risk control matrices are reviewed on a quarterly basis and control measures are tested and documented on a quarterly basis. The Company has IT systems in place making the ICFR process completely digital and strengthening the review and monitoring mechanism. Based on the assessments carried out by the Management during the year, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.

Your Company recognises that Internal Financial Controls cannot provide absolute assurance of achieving financial, operational and compliance reporting objectives because of its inherent limitations. Also, projections of any evaluation of the Internal Financial Controls to future periods are subject to the risk that the Internal Financial Control may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures

may deteriorate. Accordingly reguLar audits and review processes ensure that such systems are reinforced on an ongoing basis.

Joint Statutory Auditor's certification on internal financial controls

The Joint Statutory Auditors of your Company viz. M/s. M M Nissim & Co LLP, Chartered Accountants and M/s. M.P. ChitaLe & Co., Chartered Accountants have examined the internal financial controls of the Company and have submitted an unmodified opinion on the adequacy and operating effectiveness of the internal financial controls over financial reporting as at 31^st March 2025.

Internal Audit Framework

Your Company has in place an adequate internal audit framework to monitor the efficacy of the internal controls with the objective of providing to the Audit Committee and the Board of Directors, an independent, objective and reasonabLe assurance on the adequacy and effectiveness of the Company's processes. The internal audit approach verifies compliance with the operational and system related procedures and controls. The Internal Auditor reports to the Audit Committee of the Board.

Separate meetings between the Head of Internal Audit and the Audit Committee

Separate meetings between the Head of Internal Audit and the Audit Committee, without the presence of Management, were enabled to facilitate free and frank discussion amongst them. The meetings were held on 23^rd April 2024, 24^th September 2024 and 22^nd October 2024.

Risk Based Internal Audit ("RBIA") framework

In compliance with RBI circular dated 3^rd February 2021, the Company has in place an effective Risk Based Internal Audit ("RBIA”) Framework to review the efficacy of internaL controLs, processes, poLicies and compliance with Laws and regulations, with the objective of providing an independent and reasonabLe assurance on the adequacy and effectiveness of the organisation's internaL controL and governance processes. The framework is commensurate with the nature of the business, size, scaLe and compLexity of its operations.

The Audit Committee has approved a Risk Based InternaL Audit ("RBIA”) framework, aLong with appropriate processes and pLans for internaL audit of FY2025 and FY2026. The Risk Based InternaL Audit PLan is aLso being reviewed by the Statutory Auditors, Senior Leadership, Chief Risk Officer, Chief CompLiance Officer before being approved by the Audit Committee. The internaL audit pLan is deveLoped based on the risk profiLe of the

audit universe incLuding business activities, functions, branches, appLication systems of the organisation. The RBIA pLan incLudes process audits, branch audits and Information TechnoLogy (IT) & Information Security (IS) audits. InternaL audits are undertaken on a periodic basis to independentLy vaLidate the existing controLs.

Based on the reports of internaL audit, function/process owners undertake corrective action in their respective areas. Significant audit observations are presented to the Audit Committee aLong with agreed management action pLan. The status of the management actions and impLementation of the recommendations are tracked for aLL the observations and are presented to the Audit Committee on a reguLar basis.

Risk Management

Risk management forms an integraL part of the Company's business. Your Company has a comprehensive Risk Management PoLicy in pLace and has Laid down a weLL-defined risk management framework to identify, assess and monitor risks and strengthen controLs to mitigate risks. Your Company has estabLished procedures to periodicaLLy pLace before the Risk Management Committee and the Board of Directors, the risk assessment and minimisation procedures being foLLowed by the Company and steps taken by it to mitigate these risks.

The Risk Management PoLicy, inter-aLia, incLudes identification of eLements of Credit, OperationaL & Enterprise risk, incLuding Cyber Security and reLated risks as weLL as those risks which in the opinion of the Board may threaten the existence of the Company.

The Risk Management Committee ("RMC”) constituted by the Board manages the integrated risk and reviews periodicaLLy the Risk Management PoLicy and strategy foLLowed by the Company.

The 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. Your Company has a robust organisationaL structure for managing and reporting on risks. This risk management mechanism works at aLL the LeveLs, which acts as the strategic defence cover of the Company's risk management and is supported by reguLar review, controL, seLf-assessments and monitoring of key risk indicators.

Operational Risk Management: Your Company has impLemented an OperationaL Risk Management (ORM) PoLicy to proactiveLy manage operationaL risks. The poLicy has impLemented invoLves assessing and measuring risks, monitoring them cLoseLy, and impLementing

mitigating measures through a structured governance framework. ALL new products, processes, and changes as weLL as new financiaL outsourcing arrangements undergo thorough risk evaLuation by the OperationaL Risk team. In terms of the Latest ReguLatory guidance note on OperationaL Risk Management and OperationaL ResiLience, your Company is in compLiance with aLL the appLicabLe key themes specified.

Credit Risk Management: Your Company has successfuLLy impLemented a robust credit risk management framework, risk assessment modeLs to ensure proactive identification, mitigation, and monitoring of potentiaL credit exposures. This strategic approach enhances Company's abiLity to manage risk whiLe optimizing overaLL portfoLio performance.

In compLiance with Master Direction - Reserve Bank of India (Non-Banking FinanciaL Company - ScaLe Based ReguLation) Directions, 2023, the Company has in pLace ICAAP PoLicy and Framework with the objective of ensuring avaiLabiLity of adequate capitaL to support aLL risks in business as aLso enabLe effective risk management system in the Company.

The Chief Risk Officer ("CRO”) oversees and strengthens the risk management function of the Company. The CRO is invited to the Board, Audit Committee, Asset LiabiLity Committee and Risk Management Committee Meetings. The CRO aLong with members of the Senior Management apprises the Risk Management Committee and the Board on the risk assessment, process of identifying and evaLuating risks, major risks as weLL as the movement within the risk grades, the root cause of risks and their impact, key performance indicators, risk management measures and the steps taken to mitigate these risks.

Auditors and Audit ReportsJoint Statutory Auditors and their Reports

Basis the recommendation of the Audit Committee and the Board of Directors, the members of the Company had at the 34^th AnnuaL GeneraL Meeting heLd on 23^rd JuLy 2024, approved appointment of M/s. M M Nissim & Co LLP, Chartered Accountants (ICAI Firm Registration Number: 107122W/W100672) and M/s. M.P. ChitaLe & Co., Chartered Accountants (ICAI Firm Registration Number: 101851W) as the Joint Statutory Auditors of your Company for a term of 3 consecutive years to hoLd office from concLusion of 34^th AGM up to the concLusion of 37^th AGM to be heLd in the year 2027. The Joint Statutory Auditors hoLd vaLid peer review certificate as prescribed under the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations”).

The joint Statutory Auditors have given a confirmation on their eLigibiLity and non-disquaLification.

The joint Statutory Auditors of the Company have issued unmodified Audit Reports on the StandaLone and ConsoLidated FinanciaL Statements for the financiaL year ended 31^st March 2025. The report does not contain any quaLification, reservation or adverse remark or discLaimer.

Adoption of Policy for appointment of Statutory Auditors

In compLiance with the Reserve Bank of India GuideLines dated 27^th ApriL 2021 ("RBI GuideLines”), your Company has in pLace a PoLicy for appointment of Statutory Auditors of the Company. The said PoLicy was amended by the Board of Directors to specificaLLy cover independence of auditors and annuaL review of performance of statutory auditors in compLiance with the RBI GuideLines.

Secretarial Auditor and Audit Report

M/s. KSR & Co, Company Secretaries LLP ("KSR”), the SecretariaL Auditor appointed in accordance with the provisions of Section 204 of the Companies Act, 2013 ("Act”) read with the RuLes framed thereunder. KSR has issued the SecretariaL Audit Report for FY2025 which is appended to this Report as "Annexure II". The SecretariaL Audit Report does not contain any quaLification, reservation or adverse remark or discLaimer. KSR was present at the Last AGM of the Company heLd on 23^rd JuLy 2024.

Appointment of Secretarial Auditor

In compLiance with ReguLation 24(A) of Listing ReguLations as amended vide SEBI notification dated 12^th December 2024 and basis the recommendation of Audit Committee, the Board has approved the appointment of M/s. Makarand M. Joshi & Co. Company Secretaries ("MMJC"), as the SecretariaL Auditor of the Company for first term of 5 consecutive years, to conduct Secretarial Audit and provide other allied certification/permitted services for FY2025-2026 up to FY2029- 2030, subject to approvaL of sharehoLders of the Company at the ensuing AGM.

Consequent to the above, M/s. KSR and Co, Company Secretaries LLP ("KSR”), the current SecretariaL Auditor, has ceased to be the SecretariaL Auditor of the Company from 22^nd ApriL 2025.

MMJC have consented for their appointment as the SecretariaL Auditor and have given a confirmation to the effect that they are eLigibLe to be appointed and are not disquaLified from acting as the SecretariaL Auditor.

Members are requested to consider and approve appointment of MMJC as the SecretariaL Auditor of your Company to conduct SecretariaL Audit and provide other aLLied certification/permitted services for FY 2025-2026 up to FY 2029-2030. Necessary

Particulars of Contracts or Arrangements with Related Parties

Your Company has in pLace a robust process for approvaL of ReLated Party Transactions and on DeaLing with ReLated Parties.

ALL contracts/arrangements/transactions entered into by the Company during the FinanciaL Year with reLated parties were in the ordinary course of business and on an arm's Length basis.

Omnibus approvaL of Audit Committee is obtained for ReLated Party Transactions which are of repetitive nature, which are reviewed on quarterLy basis by the Audit Committee as per ReguLation 23 of the Listing ReguLations and Section 177 of the Companies Act, 2013.

ALL ReLated Party Transactions and subsequent materiaL modifications, if any, were pLaced before the Audit Committee for review and approvaL. Necessary detaiLs for each of the ReLated Party Transactions as appLicabLe aLong with the justification are provided to the Audit Committee in terms of the Company's PoLicy on MateriaLity of and DeaLing with ReLated Party Transactions and as required under SEBI Master CircuLar SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024.

The MateriaL ReLated Party Transactions approved by the Members of the Company are aLso reviewed / monitored on quarterLy basis by the Audit Committee of the Company as per ReguLation 23 of the Listing ReguLations and Section 177 of the Companies Act, 2013.

The Company has not entered into MateriaL ReLated Party Transactions as per the provisions of the Companies Act, 2013 and a confirmation to this effect as required under Section 134(3)(h) of the Companies Act 2013 is given in form AOC-2 as "Annexure III", which forms part of this AnnuaL Report.

In accordance with the appLicabLe provisions of the Master Direction issued by the Reserve Bank of India and the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations”), the 'PoLicy on MateriaLity of and DeaLing with ReLated Party Transactions', is avaiLabLe on the Company's website: https://www.mahindrafinance.com/investor-reLations/ poLicy-and-sharehoLder-information#mmfsL-poLicies .

The transactions of the Company with any person/ entity beLonging to the promoter/promoter group which hoLds 10% or more sharehoLding in the Company as required pursuant to Para A of ScheduLe V of the Listing ReguLations is discLosed separateLy in the financiaL statements of the Company. Members of the Company had approved entering into MateriaL ReLated Party transaction with Mahindra & Mahindra Limited, (Promoter/ HoLding Company and a ReLated party) under ReguLation 23 of the Listing ReguLations. During

 

resolution seeking approval, of members for appointment of MMJC as the Secretarial Auditor has been incorporated in the Notice of 35^th Annual. General. Meeting.

Secretarial Audit of Material Subsidiary

There is no Material. UnListed Indian Subsidiary of the Company as on 31^st March 2025 and the requirement under Regulation 24(A) of the Listing Regulations regarding the Secretarial Audit of MateriaL UnListed Indian Subsidiary is not appLicabLe to the Company for the FinanciaL Year 2024-25.

Annual Secretarial Compliance Report with additional confirmations on compliances

In compLiance with ReguLation 24(A) of Listing ReguLations, your Company has undertaken an audit for FY2025 for aLL the appLicabLe compLiances as per Listing ReguLations, 2015 and CircuLars/ GuideLines issued thereunder.

The AnnuaL SecretariaL CompLiance Report ("ASCR”) issued by M/s. KSR & Co, Company Secretaries LLP, SecretariaL Auditor and a Peer Reviewed Firm, with confirmations with confirmations on compLiances by the Company with respect to Insider Trading ReguLations, ReLated Party Transactions, updation of PoLicies, discLosure of materiaL events to Stock Exchanges etc., has been fiLed with BSE and NSE in the prescribed format and the same can be accessed on the website of the Company at https://www.mahindrafinance. com/investor-reLations/reguLatory-fiLings#secretariaL-compHance-report

The Annual Secretarial Compliance Report does not contain any qualification, reservation or adverse remark.

Cost Records and Cost Audit

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148 of the Companies Act, 2013 are not appLicabLe in respect of the business activities carried out by your Company and hence such accounts and records were not required to be maintained by the Company.

Fraud Reporting

During the year under review, the Joint Statutory Auditors and the SecretariaL Auditor have not reported any instance of fraud committed in the Company by its officers or empLoyees, invoLving an amount of Less than ' 1 crore to the Audit Committee under section 143(12) of the Companies Act, 2013, the detaiLs of which need to be mentioned in this Report.

The Company is reinforcing its commitment to trust, integrity and transparency through enhanced measures for compLiance, risk management, and governance.

the year under review, the aggregate vaLue of the transactions entered with Mahindra & Mahindra Limited did not exceed the materiaLity threshoLd as prescribed under ReguLation 23 of the Listing ReguLations. The Company intends to enter into new MateriaL ReLated Party Transaction with Life Insurance Corporation of India for which the approvaL of Members is being sought. Further detaiLs on the transactions with reLated parties are provided in the accompanying financiaL statements.

Whistle Blower Policy/ Vigil Mechanism

Your Company promotes ethicaL behaviour in aLL its business activities and has estabLished a vigiL mechanism for its Directors, EmpLoyees, and StakehoLders associated with the Company to report their genuine concerns. The VigiL Mechanism as envisaged in the Companies Act, 2013 and the RuLes prescribed thereunder and the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 is impLemented through the WhistLe BLower PoLicy, to provide for adequate safeguards against victimization of persons who use such mechanism and make provision for direct access to the Chairperson of the Audit Committee.

As per the WhistLe BLower PoLicy impLemented by the Company, the EmpLoyees, Directors or any StakehoLders associated with the Company are free to report iLLegaL or unethicaL behaviour, actuaL or suspected fraud, or vioLation of the Company's Code(s) of Conduct or Corporate Governance PoLicies or any improper activity, through the channeLs provided beLow.

The WhistLe BLower PoLicy provides for protected discLosure and protection for the WhistLe BLower. Under the WhistLe BLower PoLicy, the confidentiaLity of those reporting vioLation(s) is protected and they are not subject to any discriminatory practices. The WhistLebLower can make a Protected DiscLosure by using any of the foLLowing channeLs for reporting:

1.    Independent third party Ethics HeLpLine Service PortaL: https://ethics.mahindra.com

2.    ToLL free No: 000 800 100 4175

3.    Chairperson of the Audit Committee

The WhistLe BLower PoLicy has been wideLy disseminated within the Company. The PoLicy is avaiLabLe on the website of the Company at the web-Link https://www. mahindrafinance.com/investor-reLations/poLicy-and-shareholder-information#mmfsl-polic.ies .

During the year, the Company received 9 whistLe bLower compLaints. ALL the cases were investigated and appropriate actions were taken, wherever necessary basis investigation reports.

The Audit Committee is apprised of the vigiL mechanism on a periodic basis. During the year, no person was denied access to the Chairperson of the Audit Committee. A

quarterLy report on the whistLe bLower compLaints is pLaced before the Audit Committee for its review.

Particulars of Employees and Related Disclosures

DetaiLs of empLoyees who were in receipt of remuneration of not Less than ' 1,02,00,000 during the year ended 31^st March 2025 or not less than ' 8,50,000 per month during any part of the year, as required under provisions of Section 197(12) of the Companies Act, 2013 read with RuLe 5(2) and 5(3) of Companies (Appointment and Remuneration of ManageriaL PersonneL) RuLes, 2014 wiLL be made avaiLabLe during 21 days before the AnnuaL GeneraL Meeting in eLectronic mode to any SharehoLder upon request sent at the EmaiL ID: companv.secretarv@ mahindrafinance.com.

DiscLosures with respect to the remuneration of Directors, Key ManageriaL PersonneL and EmpLoyees as required under Section 197(12) of the Companies Act, 2013 and RuLe 5(1) of Companies (Appointment and Remuneration of ManageriaL PersonneL) RuLes, 2014, is given in "Annexure IV"

Disclosure in respect of remuneration/ commission drawn by the Managing Director/ Whole-time Director from Holding or Subsidiary Company

Mr. Ramesh Iyer former Vice-Chairman & Managing Director (up to 29^th ApriL 2024) did not receive any remuneration or commission from HoLding/Subsidiaries of the Company during FY2025.

Mr. RauL RebeLLo, Managing Director & CEO effective 30^th ApriL 2024 (Mr. RauL RebeLLo served as Executive Director and MD & CEO Designate up to 29^th ApriL 2024) did not receive any remuneration or commission from HoLding/ Subsidiaries of the Company during FY2025.

Disclosure Under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act")

Your Company is an equaL opportunity empLoyer and is committed to ensuring that the work environment at aLL its Locations is conducive to fair, safe and harmonious reLations between empLoyees. It strongLy beLieves in uphoLding the dignity of aLL its empLoyees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictLy prohibited.

Your Company has in pLace a comprehensive PoLicy in accordance with the provisions of POSH Act and RuLes made thereunder.

ALL empLoyees (permanent, contractuaL, temporary and trainees) are covered under this PoLicy. The PoLicy has been wideLy communicated internaLLy and is pLaced on

the Company's intranet portal The Company has zero tolerance towards sexuaL harassment.

The POSH Policy is available on the website of the Company and can be accessed at the web-link: https:// www.mahindrafinance.com/investor-reLations/poLicy-and-sharehoLder-information#mmfsL-poLicies.

Your Company has complied with the provisions relating to the constitution of the Internal Complaints Committee ("ICC”) under the POSH Act to redress complaints received regarding sexuaL harassment.

To ensure that aLL the empLoyees are sensitized regarding issues of sexuaL harassment, the Company creates awareness by imparting necessary trainings.

The foLLowing is a summary of SexuaL Harassment compLaint(s) received and disposed of during the FY2025, pursuant to the POSH Act and RuLes framed thereunder:

a)    Number of compLaint(s) of SexuaL Harassment received during FY2025 - 3

b)    Number of compLaint(s) disposed of during FY2025 - 3

c)    Number of cases pending for more than 90 days (which is stipuLated timeLine for compLetion of an inquiry into a compLiant of sexuaL harassment under POSH Act) - NiL

d)    Number of cases pending as on 31^st March 2025 - NiL

Number of workshops/awareness programs on the subject carried out during the year under review were as under:

¦    An onLine e-Learning moduLe for empLoyees on Prevention of SexuaL Harassment covering topics on SexuaL Harassment, the process of fiLing compLaints, deaLing with sexuaL harassment, etc. is deveLoped for training. 99.5% of the empLoyees have compLeted this training.

¦    One Training program on ICC was conducted for aLL ICC members.

¦    One Training program on POSH sensitization was conducted for the HR team.

Disclosure of Maternity Benefit Compliance

Your Company is in compLiance of Maternity Benefit Act, 1961 for the year under review.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information in respect of conservation of energy, technoLogy absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with RuLe 8(3) of the Companies (Accounts) RuLes, 2014 is attached as 'Annexure V’ to the Board's Report.

Policies

The detaiLs of the Key PoLicies adopted by your Company and changes made therein, if any, during the year under review are mentioned at "Annexure VI" to the Board's Report.

Compliance with the Provisions of Secretarial Standard - 1 and Secretarial Standard - 2

The Directors have devised proper systems to ensure compLiance with the provisions of the SecretariaL Standards, i.e., SS-1 and SS-2, reLating to 'Meetings of the Board of Directors' and 'GeneraL Meetings', respectiveLy, issued by the Institute of Company Secretaries of India ("ICSI”) and such systems are adequate and operating effectiveLy

Voluntary adherence of Secretarial Standards to all Board Committees

Although, SS-1 compLiance is required onLy for Board and its Committees mandatoriLy required to be constituted under the Companies Act, 2013 ("the Act”), the Company adheres and compLies with most of the good practices enunciated in the said SecretariaL Standards for aLL its mandatory and non-mandatory Board LeveL Committees.

Your Company has duLy compLied with appLicabLe SS-1 and SS-2, during the year under review.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operations in future.

There were no significant and materiaL orders passed by the reguLators or courts or tribunaLs during the year impacting the going concern status of the Company and its future operations.

Disclosure pertaining to Insolvency & Bankruptcy Code

There were neither any appLications fiLed by or against the Company nor any proceedings were pending under the InsoLvency and Bankruptcy Code, 2016 ("IBC”) during the year under review.

Disclosure on One-Time Settlement

During the year, the Company has not made any onetime settLement for Loans taken from the Banks or FinanciaL Institutions and hence the detaiLs of difference between amount of the vaLuation done at the time of one-time settLement and the vaLuation done whiLe taking Loan from the Banks or FinanciaL Institutions aLong with the reasons thereof is not appLicabLe.

General Disclosures

The Directors further state that no discLosure or reporting is required in respect of the foLLowing items, as there were no transactions/events reLated to these items during the financiaL year under review:

¦    There was no issue of equity shares with differentiaL rights as to dividend, voting or otherwise;

¦    There was no issue of shares (incLuding sweat equity shares) to the empLoyees of the Company under any scheme, save and except EmpLoyee Stock Option schemes referred to in this Report;

¦    During the year under review, Board of Directors at its meeting heLd on 13^th February 2025 had approved raising of funds by way issue of equity shares on rights basis to the eLigibLe sharehoLders for an amount not exceeding ' 3000 Crore, subject to receipt of reguLatory/ necessary approvaLs, as may be required.

¦    There was no buy-back of the equity shares during the year under review;

¦    There were no voting rights which are not directLy exercised by the empLoyees in respect of equity shares for the subscription/ purchase for which Loan was given by the Company (as there is no scheme pursuant to which such persons can beneficiaLLy hoLd

shares as envisaged under Section 67(3)(c) of the Companies Act, 2013 ("the Act");

¦    There was no suspension of trading of securities of the Company on account of corporate action or otherwise;

¦    There was no revision made in FinanciaL Statements or the Board's Report of the Company;

¦    The Company being an NBFC, the provisions reLating to Chapter V of the Act, i.e., acceptance of deposit, are not appLicabLe. DiscLosures as per NBFC reguLations have been made in this AnnuaL Report.

Acknowledgments

The Board conveys its deep gratitude and appreciation to aLL the empLoyees of the Company for their tremendous efforts as weLL as their exempLary dedication and contribution to the Company's performance.

The Directors wouLd aLso Like to thank its sharehoLders, customers, vendors, business partners, bankers, government and aLL other business associates for their continued support to the Company and the Management.

---

Mar 31, 2025

Your Directors present their Report together with the Audited Financial Statements of your Company for the year ended 31^st March, 2025.

A. FINANCIAL AND OPERATIONAL HIGHLIGHTS

(Rs. in crores)
Â	Standalone		Consolidated
Particulars	2025	2024	2025	2024
Revenue from Operations...........	1,16,483.68	99,097.68	1,58,749.75	1,38,279.30
Income from investment related to subsidiaries, associates and joint ventures...	2,140.85	2,238.09	461.07	798.97
Income from operations...............	1,18,624.53	1,01,335.77	1,59,210.82	1,39,078.27
Other income.......................................	1,711.87	1,956.08	2,181.05	2,176.42
Total income.........................................	1,20,336.40	1,03,291.85	1,61,391.87	1,41,254.69
Profit before Depreciation, Finance Costs, share of profit of associates and joint venture and taxation..........................................	20,127.37	17,086.27	32,699.24	27,068.35
Less: Depreciation, Amortisation and Impairment Expenses...........	4,226.78	3,488.01	6,073.65	4,723.78
Profit before Finance Costs, Share of profit of associates and joint venture and Taxation	15,900.59	13,598.26	26,625.59	22,344.57
Less: Finance Costs........................	250.47	140.48	9,083.39	7,488.21
Profit before Share of profit of associates and joint venture and Taxation.........................................	15,650.12	13,457.78	17,542.20	14,856.36
Add: Share of profit of associates and joint venture .....	-	Â	1,537.42	1,121.43
Profit before Taxation....................	15,650.12	13,457.78	19,079.62	15,977.79
Less: Tax Expense.............................	3,795.16	2,815.49	5,006.45	3,707.97
Profit for the year............................	11,854.96	10,642.29	14,073.17	12,269.82
Profit/(Loss) for the year attributable to :	Â	Â	Â	Â
- Owners of the Company.........	11,854.96	10,642.29	12,929.10	11,268.64
- Non-Controlling Interest............	-	Â	1,144.07	1,001.18
Balance of profit for earlier years...........................................................	46,400.46	37,644.47	57,717.86	48,187.61
Profits available for appropriation........................................	58,255.42	48,286.76	70,646.96	59,456.25
Less: Dividend Paid on Equity Shares........................................................	(2,623.85)	(2,020.94)	(2,352.78)	(1,810.14)
Add/(Less): Other adjustment to retained earnings $....................	(62.20)	134.64	(286.29)	71.75
Balance carried forward...............	55,569.37	46,400.46	68,007.89	57,717.86
$ For details refer to 'Statement of Changes in Equity' in the Standalone Financial Statements and 'Consolidated Statement of Changes in Equity' in the Consolidated Financial Statements respectively forming part of the Annual Report.

FY25 has been an eventful year that witnessed nearly half of global population being part of electoral activity amidst adverse geopolitical scenarios and global financial markets subject to increased volatility driven by regional instability, geopolitical risks and policy uncertainty.

Nonetheless, global economic growth has remained moderate with 2024 growth projected at 3.2% by the International Monetary Fund ("IMF"). Easing of inflationary pressures and service sector growth have been key contributors towards a steady performance. Growth has been varied across different economies with US witnessing solid domestic demand growth while major economies in Europe (France, Germany, etc.) facing contraction. Ongoing geopolitical conflicts and trade policy risks are likely to pose challenges to economic stability and growth.

Compared to the global context, India's economic growth has remained robust with first advance estimates of national accounts projecting 6.4% real GDP growth in FY25. Strong agricultural output and a resilient services sector have been key contributors to India's growth. PFCE (Private Final Consumption Expenditure) is expected to grow at 8.3% in FY25 and thereby account for 61.8% of FY25 GDP, its highest share since FY03. This has been driven by rural demand supported by a good Kharif harvest and favourable agricultural conditions. Nearly 80% of rural households reported an increase in their consumption expenditure. Robust sales of 2-wheelers and 3-wheelers, along with tractors, are further indicators of a rise in rural consumption. Urban demand, which slowed down in the 1^st half of FY25, started showing signs of recovery with 5% growth in Q3FY25, nearly double the 2.6% of the previous quarter.

Retail inflation moderated from 5.4% in FY24 to 3.35% at end of FY25. Food inflation also narrowed down significantly in 2^nd half of the year from ~10% in October 2024 to 2.69% in March 2025 - lowest since November 2021. With inflation now at its lowest since 2018-19, India has been able to reinforce macroeconomic stability and create an enabling environment for sustainable growth. With demand stimulus in the Budget and RBI monetary policy measures to increase liquidity in the economy, the India consumption story is expected to remain strong.

The Profit for the year before Depreciation, Finance Costs, Exceptional items and Taxation recorded an increase of 17.80% at Rs. 20,127.37 crores as against Rs. 17,086.27 crores in the previous year. Profit after tax increased by 11.39% at Rs. 11,854.96 crores as against Rs. 10,642.29 crores in the previous year.

Your Company continues with its rigorous cost restructuring exercises and efficiency improvements which have resulted in significant savings through continued focus on cost controls, process efficiencies and product innovations that exceed customer expectations in all areas thereby enabling the Company to maintain profitable growth in the current economic scenario.

Earnings Per Share (EPS)

The Standalone basic EPS of the Company stood at Rs. 98.80 for the Financial Year ended 31^st March, 2025 as against Rs. 89.42 for the Financial Year ended 31^st March, 2024 and Diluted EPS stood at Rs. 98.45 as against Rs. 89.08 in the previous year.

Details of Material Changes from the end of the Financial Year till the date of this Report

No material changes and commitments have occurred after the closure of FY25 till the date of this Report, which would affect the financial position of your Company.

Performance Review Automotive Sector*

Your Company's Automotive Sector posted total sales of 9,41,115 vehicles (8,54,273 four-wheelers and 86,842 three-wheelers) as against a total of 8,24,939 vehicles (7,46,833 four-wheelers and 78,106 three-wheelers) in the previous year, registering a growth of 14.1%.

In the domestic market, your Company sold a total of 9,06,406 vehicles as compared to 8,00,276 vehicles in the previous year, resulting in a growth of 13.3%.

In the Passenger Vehicle (PV) segment, your Company sold 5,51,487 vehicles [including 5,51,487 Utility Vehicles (UVs)] as compared to the previous year's volume of 4,59,877 vehicles [including 4,59,864 Utility Vehicles (UVs) and 13 Vans] registering a growth of 19.9%.

In the Commercial Vehicle (CV) segment, your Company sold 2,69,087 vehicles [including 38,995 vehicles <2T GVW, 1,89,914 vehicles between 2-3.5T GVW, 29,085 Light Commercial Vehicles (LCVs) in the 3.5T-7.5T segment, 1,340 vehicles in the 7.5T-16T GVW segment, 5,457 Heavy Commercial Vehicles (HCVs) and 4,296 LCV Passenger]

registering a growth of 2.4% over the previous year's volumes of 2,62,810 vehicles [including 44,093 vehicles <2T GVW, 1,91,603 vehicles between 2-3.5T GVW, 15,809 Light Commercial Vehicles (LCVs) in the 3.5T-7.5T segment, 1,818 vehicles in the 7.5T-16T GVW segment, 6,146 Heavy Commercial Vehicles (HCVs) and 3,341 LCV Passenger].

In the three-wheeler segment, your Company sold 85,832 three-wheelers in the domestic market, registering a growth of 10.6% over the previous year's volume of 77,589 three-wheelers.

For the year under review, the Indian automotive industry (except 2W) grew by 2.0%, with the PV industry growth of 2.0% and CV industry de-growth of 1.2%.

The UV segment showed growth of 11.0%. Within the CV industry, the LCV goods <7.5T segment de-grew by 2.8% while the Medium and Heavy Commercial Vehicles (MHCV) Goods Segment de-grew by 4.0%.

Your Company's UV volumes stood at 5,51,487 units, a growth of 19.9%. The UV market share for your Company stood at 19.7%. Thar Roxx, Scorpio, XUV300, XUV700, Thar and Bolero continued to be strong brands for your Company in the UV segment.

In LCV Goods segment, your Company retained its No. 1 position with 48.9% Market Share. Your Company sold a total of 2,57,994 vehicles in the LCV Goods segment, which is a growth of 2.6% over the previous year.

In the MHCV Goods Segment, your Company sold 6,797 trucks as against 7,964 trucks in the previous year. Your Company's market share in the MHCV segment stands at 2.2%.

Your Company is the pioneer for Electric Vehicles (EVs) in India, and for the year under review, in the electric threewheeler segment, your Company sold 77,386 vehicles as against 66,190 vehicles in the previous year, with a growth of 16.9%. In the electric four-wheeler segment, your Company sold 14,183 vehicles as against 8,025 vehicles in the previous year, with a growth of 76.7%. In the commercial vehicle segment, your Company sold 1,292 vehicles.

During the year under review, your Company posted an export volume of 34,709 vehicles as against the previous year's exports of 24,663 vehicles representing a growth of 40.7%.

The sales of spare parts for the year stood at Rs. 5,280.25

crores (including exports of Rs. 262.94 crores) as compared

to Rs. 4,288.40 crores (including exports of Rs. 310.3 crores)

in the previous year, registering a growth of 23.1%.

* The figures include sales made by subsidiaries of the Company viz. Mahindra Electric Automobile Limited and Mahindra Last Mile Mobility Limited.

Farm Equipment Sector

Your Company's Farm Equipment Sector recorded total sales of 4,24,641 tractors (domestic + export) as against 3,78,386 tractors sold in the previous year.

These figures for the current year sales and previous year sales include tractors sold under the Trakstar brand, which is the third brand of your Company under the subsidiary Gromax Agri Equipment Limited.

For the year under review, the tractor industry in India recorded sales of 9,39,713 tractors, a growth of 7.3%. Tractor Industry recorded growth in FY25 on account of favorable weather conditions, good reservoir levels, strong rabi outlook and positive terms of trade for farmers. Harvest season has commenced in the northern regions and is expected to progress smoothly across the country.

In the domestic market, your Company sold 4,07,094 tractors, as compared to 3,64,526 tractors in the previous year (these figures include tractors sold by Gromax Agri Equipment Limited), recording a growth of 11.7%. It is the highest ever volume sold by your Company. With a market share at 43.3%, a gain of 1.7% over previous year, your Company remains the Market Leader for the 42^nd consecutive year.

Your Company continues to focus on growing the farm mechanisation space, by offering affordable mechanisation solutions. The portfolio comprises of Rotavators, Cultivators, Harvesters, Rice Transplanters, Balers and Sprayers.

For the year under review, your Company exported 17,547 tractors which is a growth of 26.6% over the previous year. Overall exports are under pressure due to global slow down.

Net Sales of Spare parts for the FY25 stood at Rs. 1,328.6 crores (including exports of Rs. 171.8 crores) as compared to Rs. 1,121.2 crores (including exports of Rs. 105 crores) in the previous FY24, registering a growth of 18.5%.

Please refer to the paragraph on Operating Results in the Management Discussion & Analysis section for detailed analysis.

Other Businesses

Powerol

Mahindra Powerol has been a significant player in the power back-up industry for over 20 years.

One of the Top 2 players (by volume) in the overall Power Generation market, Mahindra Powerol's network is spread

over 800 service and sales touchpoints nationwide and over 12 overseas locations.

The Company's distinct business model strategically balances its service and product contributions, each equally vital to its revenue generation.

In addition to Telecom, Powerol has also been focusing on increasing its retail market share by Higher kVA range extensions.

With a focus on green energy, Powerol has also initiated an EV charger business for home charger installations. Mahindra Powerol has already installed over 10,000 chargers nationwide. Your Company is also into Energy Storage Solutions through Li-ion batteries.

Construction Equipment

Your Company, under the Mahindra EarthMaster brand, sold 981 Backhoe Loaders (BHLs), and sold 256 Motor Graders, under the RoadMaster brand.

Notably, your Company retained its position as the market leader (~23% Market Share) in the Motor Grader segment, a testament to its robust product offerings and strong customer trust.

Moreover, your Company achieved an exceptional milestone in the export markets by recording a significant growth of 124% year-on-year. A total of 228 units of construction equipment were exported, reflecting the growing acceptance of Mahindra products in international markets and the success of strategic efforts to expand the global footprint.

Two-Wheeler Business

In line with the strategy for the two-wheeler business, your Company through its subsidiary, Classic Legends Private Limited had re-introduced the iconic brands 'Jawa' and 'Yezdi' to the Indian market in the FY19 and FY22 respectively. During FY23, '42 Bobber' was introduced and during FY24, 'Jawa 350' was introduced to the Indian market. In addition, the Company forayed into new international markets through iconic British brand BSA in UK and European markets. During FY25, the Company also launched its third iconic brand into the Indian market 'BSA' by launching 'BSA Gold Star 650' and also added 'Jawa 42 FJ' as one more product into Jawa portfolio.

Current Year's review

During the period 1^st April, 2025 to 4^th May, 2025, 85,821 vehicles were produced as against 71,060 vehicles and 81,660 vehicles were dispatched as against 68,359 vehicles during the corresponding period in the last year. During the same period 44,182 tractors were produced and 43,788 tractors

were dispatched as against 37,744 tractors produced and 35,988 tractors dispatched during the corresponding period in the previous year.

India has fair integration with global economy wherein exports / imports each contributing 20-25% of GDP. India's global approach till now has been guided by strategic autonomy and economic pragmatism. With global economy showing increasing fragmentation and protectionist measures, global supply chain landscape is expected to witness some shifts. Merchandise exports are likely to face headwinds from global uncertainties and trade disruptions. Domestic market (especially certain sectors) is also likely to face some risk of dumping from China and other ASEAN markets. Robust service exports and Government efforts on trade agreements are expected to ease some of the impact. In April 2025, IMF revised its FY26 growth forecast for India down to 6.2%, amid tariff uncertainty. However, it maintained a relatively more stable outlook owing to confidence in private consumption, especially in rural markets.

Union Budget FY26 maintained its balanced approach to navigate complex global economic environment. Extension of tax exemption in the Union Budget is likely to have positive impact on discretionary spend over short term. Budget schemes centred around four identified engines of growth i.e. Agriculture, MSMEs, Investments and Exports, are expected to further build positive momentum.

With stimulus provided by the Union Budget and RBI monetary policy measures to increase liquidity in the economy, the India consumption story is expected to remain strong to deliver on its growth target for FY26.

Finance

The global economy grew by 3.3% during CY24 vs earlier forecast of 3.2%. The IMF's January 2025 outlook projected steady global growth at 3.3% for each of CY25 and CY26, but April 2025 revisions lowered forecasts to 2.8% and 3.0% respectively due to trade tensions and policy uncertainty. Global inflation fell to 5.7% in CY24 from 6.6% in CY23. This is expected to decline to 4.3% for CY25 and 3.6% for CY26. However, policy-generated disruptions to the ongoing disinflation process could interrupt the pivot to easing monetary policy.

The U.S. Federal Reserve (Fed) implemented a 100-bps rate cut in CY24. The Dollar Index (DXY) strengthened post U.S. presidential election which boosted investor confidence in policies favouring deregulation and tax cuts. However, post January 2025, the DXY decline began with concerns over the potential economic impact of new tariffs and trade

policies, raising recession fears and dampening investor sentiment globally.

Despite recent moderation, India's economic growth has remained robust, with estimated real GDP growth of 6.5% in FY25 by Reserve Bank of India (RBI). Inflation has broadly declined within the tolerance band (currently at 3.6%). The financial sector has remained resilient, with non-performing loans at multi-year lows. Fiscal consolidation has continued, and the current account deficit has remained well contained, supported by strong growth in service exports.

In CY25 so far, RBI's Monetary Policy Committee has reduced the benchmark repo rate by 50 bps to 6.0% from 6.5%, delivering the first rate cuts in last five years. The RBI changed the monetary policy stance from "withdrawal of accommodation" to "neutral" to "accommodative" mostly owing to Trump tariff implications and hinting at further rate cuts during FY26. RBI further reduced the Cash Reserve Rate (CRR) by 50 bps to address tightening of liquidity conditions leading to banking system liquidity turning positive at end of March 2025. RBI has indicated further liquidity easing operations such as OMO purchases, USD/INR Sell/ Buy swaps, rolling over USD forwards among others in a bid to keep liquidity abundant to ensure quick transmission of lower borrowing costs.

Indian Rupee remained largely range-bound till November 2024. India's foreign exchange reserves, which surged to nearly $700 billion by September 2024, played a crucial role in safeguarding the currency against external pressures. However, following the U.S. elections, heightened volatility and equity outflows from India contributed to a sharp decline in the Rupee, touching an all-time low of 87.57 against the U.S. Dollar in January 2025. In March 2025, the Rupee experienced a strong recovery, aided by a weaker dollar driven by concerns over a potential U.S. economic slowdown due to the ongoing trade war.

RBI adjusted its FY26 GDP growth forecast to 6.5% while inflation is expected to align with the 4.0% target by FY26. Finance Bill 2025 also focused on unlocking the potential by increasing personal tax exemption limits thereby propelling consumption and simultaneously focusing on gearing up investment. Furthermore, it emphasized measures to support farmers and SMEs, and promoting the Make in India initiative.

Banks consistently regard your Company as a highly valued and esteemed client, offering facilities and services at their preferential prime rates. Your Company adheres to a prudent financial strategy, ensuring that financial gearing remains within optimal levels at all times. The Company's Gross Debt to Equity Ratio is 0.02 as of 31^st March, 2025.

Treasury played a pivotal role in addressing investor queries and sharing insights on strategic priorities, including:

•    Capital allocation framework.

•    Leveraging on market leadership in Auto and Farm business.

•    Turnaround of Mahindra Finance and Tech Mahindra.

•    Scaling of the Growth Gems.

•    ESG undertakings.

A major milestone in FY25 was the inaugural Group Investor Day, attended by over 200 investors and analysts, reflecting strong interest and confidence in your Company's vision and performance. Other key events, which were met with very enthusiastic participation, included:

•    Tour of Mahindra Research Valley (flagship R&D and innovation center).

•    Product launches such as Thar ROXX and Battery Electric Vehicles (BEVs).

Your Company ensures critical information remains readily accessible to investors through timely updates on the Company's website.

Dividend

As per the Dividend Distribution Policy, dividend payout would have to be determined based on available financial resources, investment requirements and taking into account optimal shareholder return. Within these parameters, the Company would endeavour to maintain a total dividend pay-out ratio in the range of 20% to 35% of the annual standalone Profits after Tax (PAT) of the Company.

Your Directors, considering the good performance and a strong cash flow, decided to recommend a Dividend of Rs. 25.30 (506%) per Ordinary (Equity) Share of the face value of Rs. 5 each, out of the Profits for the Financial Year ended 31^st March, 2025.

The Equity Dividend Outgo for the FY25 would absorb a sum of Rs. 3,146.13 crores resulting in a payout of 26.54% of the standalone net profit of the Company for the FY25 [as against Rs. 2,623.85 crores comprising the dividend of Rs. 21.10 per Ordinary (Equity) Share of the face value of Rs. 5 each resulting in a payout of 24.48% for the previous year]. Dividend will be payable subject to approval of Shareholders at the ensuing Annual General Meeting and deduction of tax at source to those Shareholders whose names appear in the Register of Members as on the Record Date / Book Closure Date. The Board of your Company decided not to transfer any amount to the General Reserve for the year under review.

 

Additionally, your Company remained committed to efficient cash management, ensuring sufficient liquidity and access to backup lines of credit. During the year, your Company repaid short term trade finance of Rs. 350 crores and long-term borrowings of Rs. 100 crores whilst maintaining a high liquidity level of Rs. 23,905 crores as of 31^st March, 2025.

Further, your Company has been rated by CRISIL Ratings Limited ("CRISIL"), ICRA Limited ("ICRA"), India Ratings and Research Private Limited ("India Ratings") and CARE Ratings Limited ("CARE") for its Banking facilities. All have re-affirmed the highest credit rating for your Company's Short-Term facilities. For Long Term facilities and Non-Convertible Debentures, CRISIL, ICRA, CARE and India Ratings have re-affirmed their credit ratings of CRISIL AAA/Stable, [ICRA]AAA (stable), CARE AAA; Stable, and IND AAA/Stable for the respective facilities rated by them. With the above rating affirmations, your Company continues to enjoy the highest level of rating from all Major Rating Agencies at the same time.

The AAA ratings indicate highest degree of safety regarding timely servicing of financial obligations and is also a vote of confidence reposed in your Company's Management by the rating agencies. It is an acknowledgement of the strong credit profile of your Company over the years, resilience in earnings despite cyclical upturns/downturns, robust financial flexibility arising from the significant market value of its holdings and prudent management.

Your Company is a "Large Corporate" as per the criteria under Securities and Exchange Board of India ("SEBI") Master Circular No. SEBI/HO/DDHS/PoD1/P/CIR/2024/54 dated 22^nd May, 2024, as amended from time to time. The Company has complied with the provisions of the said Circular and has made requisite disclosures in this regard.

Investor Relations (IR)

Your Company remains committed to fostering trust and transparency with investors and analysts, adhering to global best practices in Investor Relations. In FY25, your Company actively engaged with over 1,000 domestic and global investors and analysts through conferences, individual and group interactions, both in-person and virtual settings (excluding quarterly earnings calls, analyst meets and specific event related meets). All events hosted in FY25 including quarterly earnings calls, analyst meets, product launch events, etc. were well attended by investors and analysts.

Senior management, including the Group CEO and Managing Director, Executive Director and CEO (Auto and Farm Sector), Group CFO and Head - Group Corporate Finance, IR &

Dividend Distribution Policy

The Dividend Distribution Policy containing the requirements mentioned in Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") is attached as Annexure I and forms part of this Annual Report.

The Dividend Distribution Policy of the Company is also uploaded on the Company's website at the Web-link: https://www.mahindra.com/sites/default/files/resources/ investor-reports/FY17/Governance/MM-Dividend-Distribution-Policy-29-9-2016-Final.pdf

B. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company, its subsidiaries, associates and joint ventures prepared in accordance with the Companies Act, 2013 and applicable Indian Accounting Standards along with all relevant documents and the Auditors' Report forms part of this Annual Report. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies, associates and joint ventures.

The Consolidated Income from operations is Rs. 1,59,211 crores in the current year as compared to Rs. 1,39,078 crores in the previous year, registering an increase of 14.5%.

The Consolidated Profit before share of profit of associates and joint ventures and tax for the current year is Rs. 17,542 crores as compared to Rs. 14,856 crores in the previous year, registering an increase of 18.1%. The consolidated profit after tax after non-controlling interest for the year is Rs. 12,929 crores as compared to Rs. 11,269 crores in the previous year, registering an increase of 14.7%.

The Financial Statements as stated above are also available on the website of the Company and can be accessed at the Web-link: https://www.mahindra.com/resources/FY25/ AnnualReport.zip.

Subsidiary, Joint Venture and Associate Companies

The Mahindra Group entities continue to play a pivotal role in driving the overall revenue growth and performance of your Company.

Tech Mahindra Limited, Flagship Company in the IT Sector, reported a consolidated operating revenue of Rs. 52,988 crores in the current year as compared to Rs. 51,996 crores in the previous year, registering an

increase of 1.9% (not consolidated in M&M revenue). Its consolidated profit after tax after non-controlling interests is Rs. 4,252 crores as compared to Rs. 2,358 crores in the previous year, registering an increase of 80.3%.

The Group's finance company, Mahindra & Mahindra Financial Services Limited, a listed subsidiary of the Company (Mahindra Finance), reported a consolidated operating revenue of Rs. 18,463 crores during the current year as compared to Rs. 15,797 crores in the previous year, registering an increase of 16.9%. The consolidated profit after tax after non-controlling interests for the year is Rs. 2,262 crores as compared to Rs. 1,933 crores in the previous year, registering an increase of 17.0%. The customer base of Mahindra Finance has crossed 11.0 million customers and currently has a network of over 1,365 offices. Mahindra Finance reported closing business AUM of Rs. 1,19,673 crores as of 31^st March, 2025, a growth of 16.6%.

Mahindra Lifespace Developers Limited, a listed subsidiary in the business of real estate, reported a consolidated operating revenue of Rs. 372 crores as compared to Rs. 212 crores in the previous year, registering an increase of 75.5%. The consolidated profit after tax after non-controlling interest for the year is Rs. 61 crores as compared to Rs. 98 crores in the previous year, registering a decrease of 37.8%. Residential pre-sales of Rs. 2,804 crores in FY25, reported a growth of 20.4%.

Mahindra Holidays & Resorts India Limited, a listed subsidiary in the business of vacation timeshare, registered a consolidated operating revenue of Rs. 2,781 crores as compared to Rs. 2,705 crores in the previous year, registering an increase of 2.8%. The consolidated profit after tax after non-controlling interests for the year is Rs. 128 crores as compared to Rs. 116 crores in the previous year, registering an increase of 10.3%.

Mahindra Logistics Limited, a listed subsidiary in the logistics business, reported a consolidated operating revenue of Rs. 6,105 crores as compared to Rs. 5,506 crores in the previous year registering an increase of 10.9%. The consolidated loss after tax after non-controlling interests for the year is Rs. 36 crores as compared to Rs. 55 crores in the previous year, registering a decrease of loss of 34.5%.

Swaraj Engines Limited, a listed subsidiary in the business of manufacturing of Diesel Engines and its components, reported operating revenue of Rs. 1,682 crores as compared to Rs. 1,419 crores in the previous year registering an

increase of 18.5%. The profit after tax for the year is Rs. 166 crores as compared to Rs. 138 crores in the previous year, registering an increase of 20.3%.

During the year under review, Neon Hybren Private Limited, Orion Hybren Private Limited, Pulse Hybren Private Limited, Quest Hybren Private Limited, Mahindra South East Asia Limited, Steer Hybren Private Limited, Target Hybren Private Limited, Velos Hybren Private Limited, Rhyme Hybren Private Limited and Ultrogen Hybren Private Limited have become Subsidiaries of your Company.

During the year under review, Mahindra North American Technical Centre, Inc., Mahindra Heavy Engines Limited, Mahindra Two Wheelers Limited, Trringo.com Limited, Holiday Club Resorts Rus LLC and Fifth Gear Ventures Limited have ceased to be Subsidiaries of your Company.

During the year under review, Mahindra - BT Investment Company (Mauritius) Limited became a direct subsidiary of your Company and NBS International Limited became a wholly owned subsidiary of your Company.

Subsequent to the year end, Mahindra Advanced Technologies Limited has become a wholly owned subsidiary of your Company.

A Report on the performance and financial position of each of the subsidiaries, associates and joint venture companies included in the Consolidated Financial Statements and their contribution to the overall performance of the Company, is provided in Form AOC-1 and forms part of this Annual Report.

The Policy for determining material subsidiaries as approved by the Board is uploaded on the Company's website and can be accessed in the Governance section at the Web-link: https://www.mahindra.com/investor-relations/policies-and-documents.

C. JOINT VENTURES, ACQUISITIONS AND OTHER MATTERS

Acquisition of SML Isuzu Limited ("SML")

Subsequent to the year end, your Company entered into a Share Purchase Agreement with Sumitomo Corporation, promoter of SML, and a Share Purchase Agreement with Isuzu Motors Limited, a public shareholder of SML. Pursuant to the above agreements, your Company agreed to acquire equity shares constituting 43.96% and 15.00% of the equity share capital of SML respectively, for an aggregate consideration of Rs. 555 crores for the combined 58.96% stake. Further, in accordance with the SEBI (Substantial

Acquisition of Shares and Takeovers) Regulations, 2011 ("Takeover Regulations"), as amended, your Company shall make an open offer for acquisition of up to 26.0% of the equity share capital of SML, for cash consideration, from the eligible public shareholders of SML.

The transaction, including the open offer, is subject to the approval of the Competition Commission of India and is expected to complete during 2025 in accordance with Takeover Regulations. This transaction will help your Company strengthen its strategic position in the Trucks and Buses segment.

Rights Issue of Mahindra & Mahindra Financial Services Limited

During the year under review, the Board of Directors of Mahindra & Mahindra Financial Services Limited ("MMFSL"), a listed subsidiary of your Company, at its Meeting held on 13^th February, 2025 has approved fund raising by way of offer and issuance of fully paid-up equity shares of MMFSL of face value of Rs. 2/- each (the "Equity Shares") for an amount not exceeding Rs. 3,000 crores by way of a rights issue ("Rights Issue") to the eligible equity shareholders of MMFSL as on the record date, in accordance with applicable laws. This fund raise is primarily to maintain a strong capital adequacy ratio keeping in mind MMFSL's growth plans to augment its Assets Under Management.

In furtherance to the above, the Board of Directors of your Company at its Meeting held on 20^th February, 2025, has accorded its approval, subject to compliance of applicable laws, to subscribe to the Equity Shares of MMFSL to the full extent of the Company's Rights Entitlement; and to subscribe to Additional Shares as well as to any Unsubscribed portion of the Rights Issue upto the total issue size.

Rights Issue of Mahindra Lifespace Developers Limited

During the year under review, the Board of Directors of Mahindra Lifespace Developers Limited ("MLDL"), a listed subsidiary of your Company, at its Meeting held on 13^th February, 2025 has approved fund raising by way of offer and issuance of fully paid-up equity shares of MLDL of face value of Rs. 10/- each (the "Equity Shares") for an amount not exceeding Rs. 1,500 crores by way of a rights issue ("Rights Issue") to the eligible equity shareholders of MLDL as on the record date, in accordance with applicable laws. The proceeds will be utilized to pare down MLDL's existing debt and support its future growth plans.

In furtherance to the above, the Board of Directors of your Company at its Meeting held on 20^th February, 2025, has accorded its approval, subject to compliance of applicable laws, to subscribe to the Equity Shares of MLDL to the full extent of the Company's Rights Entitlement; and to subscribe to Additional Shares as well as to any Unsubscribed portion of the Rights Issue upto the total issue size.

Mahindra Electric Automobile Limited

During the year under review, your Company approved an investment of Rs. 12,000 crores in Mahindra Electric Automobile Limited ("MEAL") to accelerate the growth of 4 (four) Wheel Passenger Electric Vehicles (EVs) Business and fund the EV journey over the next 3 years. The funds will be infused from internal accruals and will be utilized by MEAL primarily to create and market a world-class Electric SUV portfolio with advanced technologies and leverage the Company's focus and expertise in ESG and Climate Change.

Further, during the year the Company and British International Investment Plc. ("BII") jointly assessed the funding requirement for MEAL and mutually agreed that the final tranche of BII's investment would be Rs. 650 crores as against earlier planned investment of Rs. 725 crores. Consequently, the total investment by BII in MEAL would be Rs. 1,850 crores resulting in BII's shareholding to be in the range of 2.64% to 4.58% of the Share Capital of MEAL, on a fully diluted basis. This reduction in investment by BII will have no bearing on MEAL's overall business plan. MEAL has received entire funding by BII and Jongsong Investments Pte Ltd ("Temasek") as on 31^st March, 2025.

Classic Legends Private Limited

During the year, your Company's subsidiary Classic Legends Private Limited ("CLPL") entered into a Joint Venture with Tube Investments of India Limited ("TIIL"). CLPL and TIIL have a 50:50 shareholding in this Joint Venture (viz. TICL Brands (India) Private Limited) which is using the "BSA" trademarks in India for motorcycles, its parts and accessories to be manufactured and sold by CLPL.

Mahindra Racing UK Limited

Subsequent to the year end, Mahindra Overseas Investment Company (Mauritius) Limited, a wholly owned subsidiary of the Company ("MOICML") executed a Share Purchase Agreement ("SPA") between MOICML, Tech Mahindra London Limited ("TMLL"), a wholly owned subsidiary of Tech Mahindra Limited which is a listed Associate of the Company ("TechM")

and Mahindra Racing UK Limited, a wholly owned subsidiary of MOICML and of the Company ("MRUK"), whereby MOICML has agreed to sell its entire stake in MRUK to TMLL.

MRUK is based out of Banbury, UK and participates in Formula Electric World Championships which are held across the globe annually.

Consequent to completion of the aforesaid transaction, MRUK would cease to be a wholly owned subsidiary of MOICML and of the Company. The purpose of transferring the ownership of MRUK from MOICML to TMLL is to re-align with the core priorities of Group Companies.

Merger of Fifth Gear Ventures Limited ("FGVL") into Mahindra First Choice Wheels Limited ("MFCWL")

The National Company Law Tribunal has sanctioned the Composite Scheme of Amalgamation and Arrangement amongst MFCWL with FGVL and their respective Shareholders ("Scheme") vide its order dated 11^th February, 2025. The Appointed Date of the Scheme is 1^st April, 2024 and the Scheme is effective from 15^th March, 2025. Pursuant to the Scheme becoming effective, FGVL ceased to be the subsidiary of MFCWL and of the Company.

Merger of Mahindra Heavy Engines Limited, Mahindra Two Wheelers Limited and Trringo.Com Limited with the Company

The Board of Directors of your Company at its meeting held on 4^th August, 2023 had approved, subject to requisite approvals/ consents, the Scheme of Merger by Absorption of Mahindra Heavy Engines Limited ("MHEL") and Mahindra Two Wheelers Limited ("MTWL") and Trringo.com Limited ("TCL"), wholly owned subsidiaries of the Company, with the Company and their respective shareholders under sections 230 to 232 and other applicable provisions of the Companies Act, 2013, with the Appointed Date of the Scheme as 1^st April, 2023 or such other date as may be directed or approved by the National Company Law Tribunal, Mumbai Bench ("NCLT") or any other appropriate authority. The NCLT pronounced an order on 7^th May, 2024 to allow the Scheme. Subsequently, the Company also received relevant approvals from Directorate of Industries and Maharashtra Industrial Development Corporation. The Scheme was made effective from 6^th June, 2024 i.e. the date on which the Certified Copy of the Order of the NCLT sanctioning the Scheme was filed with the Registrar of Companies, Maharashtra at Mumbai. Accordingly, the Merger

by Absorption stands completed and MHEL, MTWL and TCL ceased to be the subsidiaries of the Company from 6^th June, 2024 upon the Scheme becoming effective.

Divestment of Stake in New Delhi Centre for Sight Limited ("NDCFS")

During the year, Mahindra Holdings Limited ("MHL"), a wholly owned subsidiary of the Company, has sold its entire stake i.e. 30.83% of paid-up capital of NDCFS on a fully diluted basis, to Space Investments Limited, Defati Investments Holdings BV and Infinity Partners. Following the completion of the aforementioned sale, the shareholding of MHL in NDCFS has become 'Nil' and NDCFS has ceased to be an Associate Company of MHL under the Companies Act, 2013, and a Joint Venture of MHL and that of the Company under IND AS.

Gamaya SA, Switzerland

During the year, Gamaya SA, Switzerland reorganized its capital structure and issued shares to a new investor as part of a business combination and against convertible loans received from its other investors. Even though your Company was not a party to the transaction, issuance of shares resulted in reduction of your Company's shareholding in Gamaya from 15.04% to 4.33% on a fully diluted basis.

D. INTERNAL FINANCIAL CONTROLS

The Corporate Governance Policies guide the conduct of affairs of your Company and clearly delineate 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.

Your Company's Financial Statements are prepared on the basis of the Significant Accounting Policies that are carefully selected by Management and approved by the Audit Committee and the Board. These Accounting policies are reviewed and updated from time to time.

Your Company uses SAP ERP Systems as a business enabler and to maintain its Books of Account. The transactional controls built into the SAP ERP Systems ensure appropriate segregation of duties, appropriate level of approval mechanisms and maintenance of supporting records. The Policies related to the Information Management reinforce

the control environment. The systems, Standard Operating Procedures and controls are reviewed by Management. These systems and controls are subjected to Internal Audit and their findings and recommendations are reviewed by the Audit Committee which ensures the implementation.

Your Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations. Your Company's Internal Financial Controls were deployed through Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), that addresses material risks in your Company's operations and financial reporting objectives.

Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by The Institute of Chartered Accountants of India. Based on the results of such assessments carried out by the Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.

Your Company recognizes that the Internal Financial Controls cannot provide absolute assurance of achieving financial, operational and compliance reporting objectives because of its inherent limitations. Also, projections of any evaluation of the Internal Financial Controls to future periods are subject to the risk that the Internal Financial Controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.

E.    MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of your Company's performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

F.    RELATED PARTY TRANSACTIONS

The Company has in place a robust process for approval of Related Party Transactions and on Dealing with Related Parties.

As per the process, necessary details for each of the Related Party Transactions as applicable along with

the justification are provided to the Audit Committee in terms of the Company's Policy on Materiality and Dealing with Related Party Transactions and as required under SEBI Master Circular for compliance with the provisions of the Listing Regulations by listed entities dated 11^th November, 2024. The Material Related Party Transactions approved by the Members of the Company are also reviewed / monitored on quarterly basis by the Audit Committee of the Company as per Regulation 23 of the Listing Regulations and Section 177 of the Companies Act, 2013.

All Related Party Transactions entered during the year were in the ordinary course of business and on arm's length basis.

During the year under review, your Company has entered into Material Related Party Transactions as previously approved by the Members under Regulation 23 of the Listing Regulations. The Company also proposes to modify the limits of certain existing Material Related Party Transactions and also intends to enter into new Material Related Party Transactions for which the approval of Members is being sought.

The Company has not entered into Material Related Party Transactions as per the provisions of the Companies Act, 2013 and a confirmation to this effect as required under section 134(3)(h) of the Companies Act, 2013 is given in Form AOC-2 as Annexure II, which forms part of this Annual Report.

The Policy on Materiality of and Dealing with Related Party Transactions as approved by the Board is uploaded on the Company's website and can be accessed in the Governance section at the Web-link: https://www.mahindra.com/investor-relations/policies-and-documents.

G. AUDITORS

Statutory Auditors and Auditors' Report

Messrs B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration Number 101248W/W-100022), holding valid certificate issued by the Peer Review Board of the ICAI, were re-appointed as the Statutory Auditors of the Company to hold office for a second term of 5 years from the conclusion of the 76^th Annual General Meeting (AGM) held on 5^th August, 2022 until the conclusion of the 81^st AGM of the Company to be held in the year 2027.

The Auditors' Report for FY25 is unmodified i.e. it does not contain any qualification, reservation or adverse remark or disclaimer.

Secretarial Auditor

Pursuant to Regulation 24A of the Listing Regulations read with provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, it is mandated that every listed entity and its material unlisted subsidiaries undertake a Secretarial Audit.

Further, listed entities are required to submit an Annual Secretarial Compliance Report, which shall be signed by the appointed Secretarial Auditor or a Peer Reviewed Company Secretary satisfying the conditions as prescribed by SEBI.

In alignment with the aforementioned regulatory framework including the amendments made by SEBI and the provisions of the Companies Act, 2013 regarding Secretarial Audit and appointment of Secretarial Auditor, the Board of Directors of your Company based on the recommendations of the Audit Committee at its Meeting held on 5^th May, 2025, approved and recommended to the Shareholders for their approval, appointment of M/s. Parikh and Associates, a peer reviewed firm of Company Secretaries in whole time practice, as the Secretarial Auditors of the Company for a term of 5 consecutive years starting from 1^st April, 2025 to 31^st March, 2030.

The Board acknowledges the significance of robust compliance mechanisms and corporate governance practices within the Company. M/s. Parikh and Associates, Company Secretaries brings extensive experience in the field and is expected to provide invaluable insights into the regulatory landscape, ensuring adherence to all relevant laws and guidelines as applicable pursuant to the Secretarial Audit guidelines.

Secretarial Audit Report

The Company has annexed to this Board's Report as Annexure III, a Secretarial Audit Report for the FY25 given by Mr. Sachin Bhagwat, Practicing Company Secretary (Certificate of Practice Number: 6029).

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer.

Annual Secretarial Compliance Report

The Company has undertaken an audit for the FY25 for all applicable compliances as per SEBI Regulations and Circulars / Guidelines issued thereunder. The Annual Secretarial Compliance Report duly signed by Mr. Sachin Bhagwat, Practicing Company Secretary has been submitted to the Stock Exchanges and is annexed at Annexure IV to this Board's Report.

Secretarial Audit of Material Unlisted Indian Subsidiary

There is no Material Unlisted Indian Subsidiary of the Company as on 31^st March, 2025 and as such the requirement under Regulation 24A of the Listing Regulations regarding the Secretarial Audit of Material Unlisted Indian Subsidiary is not applicable to the Company for the FY25.

Cost Auditors

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 FY25.

The Board of Directors of your Company based on the recommendations of the Audit Committee at its Meeting held on 5^th May, 2025 appointed Messrs D. C. Dave & Co., Cost Accountants (Firm Registration Number 000611), as the Cost Auditors of the Company for the FY26 under section 148 of the Companies Act, 2013. Messrs D. C. Dave & Co. have confirmed that their appointment is within the limits of section 141(3)(g) of the Companies Act, 2013 and have also certified that they are free from any disqualifications specified under section 141(3) and proviso to section 148(3) read with section 141(4) of the Companies Act, 2013.

The Audit Committee has also received a Certificate from the Cost Auditors certifying their independence and arm's length relationship with the Company.

As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking Members' ratification for the remuneration payable to Messrs D. C. Dave & Co., Cost Auditors is included in the Notice convening the Annual General Meeting.

Cost Records

As per Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014, your Company is required to maintain cost records and accordingly, such accounts and records are maintained.

Reporting of Frauds by Auditors

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.

H.    PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES

Particulars of the loans given, investment made or guarantee given or security provided and the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient of the loan or guarantee or security are provided in Note Nos. 8 and 41 to the Financial Statements.

I.    PUBLIC DEPOSITS AND LOANS / ADVANCES

Your Company had discontinued acceptance of Fixed Deposits with effect from 1^st April, 2014.

All the deposits from public and shareholders had already matured as on 31^st March, 2017. Out of these, 5 deposits aggregating Rs. 0.84 lakhs from the public and shareholders as on 31^st March, 2025 had matured and had not been paid at the end of the Financial Year as there is a restraining order from the Court / Tribunal / Statutory Authority. Since then, no deposits 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.

The particulars of loans / advances / investments, etc., required to be disclosed pursuant to Para A of Schedule V of the Listing Regulations are furnished separately in this Annual Report.

The transaction(s) of the Company with a company belonging to the promoter / promoter group which hold(s) more than 10% shareholding in the Company as required pursuant to Para A of Schedule V of the Listing Regulations are disclosed separately in the Financial Statements of the Company.

J.    EMPLOYEES

Key Managerial Personnel (KMP)

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

(a) Dr. Anish Shah - Managing Director and CEO (designated as Group CEO and Managing Director with effect from 1^st April, 2025)

(b)    Mr. Rajesh Jejurikar - Executive Director and CEO (Auto and Farm Sector)

(c)    Mr. Manoj Bhat - Group Chief Financial Officer (upto close of 16^th May, 2024)

(d)    Mr. Amarjyoti Barua - Group Chief Financial Officer (with effect from 17^th May, 2024)

(e)    Mr. Narayan Shankar - Company Secretary (upto close of 1^st April, 2025)

(f)    Ms. Divya Mascarenhas - Interim Company Secretary (with effect from 2^nd April, 2025)

Employees' Stock Option and Employees' Welfare Schemes

During the year under review, based on the recommendation of the Governance, Nomination and Remuneration Committee (GNRC) of your Company, the Trustees of Mahindra & Mahindra Employees' Stock Option Trust have granted Stock Options to employees under the Mahindra & Mahindra Limited Employees Stock Option Scheme 2010. No Stock Options have been granted to employees under the Mahindra & Mahindra Limited Employees Stock Option Scheme 2000 (2000 Scheme).

The Company has in force the following Schemes which get covered under the provisions of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SBEB Regulations 2021):

1.    Mahindra & Mahindra Limited Employees Stock Option Scheme - 2000 (2000 Scheme) *

2.    Mahindra & Mahindra Limited Employees Stock Option Scheme - 2010 (2010 Scheme)

3.    M&M Employees Welfare Fund No. 1

4.    M&M Employees Welfare Fund No. 2

5.    M&M Employees Welfare Fund No. 3

* No outstanding options as on 31^st March, 2025 and as such the 2000 Scheme is no longer in force and has been wound up.

There are no changes made to the above Schemes during the year under review and these Schemes are in compliance with the SBEB Regulations 2021. Your Company's Secretarial Auditor, Mr. Sachin Bhagwat, has certified that the Company's above-mentioned Schemes have been implemented in accordance with the SBEB Regulations 2021, and the Resolutions passed by the Members for the 2000 Scheme and the 2010 Scheme.

Information as required under Regulation 14 read with Part F of Schedule I of the SBEB Regulations 2021 has been uploaded on the Company's website and can be accessed at the Web-link: https://www.mahindra.com/resources/FY25/ AnnualReport.zip.

Particulars of Employees and related disclosures

The Company had 491 employees who were in receipt of remuneration of not less than Rs. 1,02,00,000 during the year ended 31^st March, 2025 or not less than Rs. 8,50,000 per month during any part of the year.

Details of employee remuneration as required under provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be made available during 21 days before the Annual General Meeting in electronic mode to any Shareholder upon request sent at [e-mail]. Such details are also available on your Company's website and can be accessed at the Web-link: https://www.mahindra.com/resources/FY25/ AnnualReport.zip.

Disclosures with respect to the remuneration of Directors, Key Managerial Personnel (KMPs) and employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure V to this Report.

Industrial Relations

The year under review witnessed a very positive Industrial Relations Scenario across all manufacturing locations for the Automotive and Farm Equipment Sectors.

Your Company's focus continues towards propagating proactive and employee centric practices. Various initiatives that aim to create an engaged workforce with an innovative, productive and a competitive shop-floor ecosystem continues to grow in strength.

Some of the initiatives that are put in place includes, Development of Self-Managed Team, improving Gender diversity on the shopfloor, Employee of the year, Reward and    Recognition for associates, i4-idea generation

program, etc. Further, the programs on Code of Conduct, Prevention of Sexual Harassment (POSH), Anti-Bribery and Anti-Corruption (ABAC) and Human Rights are made mandatory to ensure appropriate behaviour and governance.

The Employee Relations function is dedicated towards building a positive and collaborative Work Culture to ensure smooth functioning of your business.

With the objective of capability building, developing future ready workforce and fostering togetherness at the workplace, your Company implements multiple training and engagement programs on an ongoing basis. These include various behavioural and functional programs such as Behavioural based safety, quality tools, TPM, Ownership mindset and programs on current and future skill such as Robotics, Mechatronics, Auto Electric Diagnostics, Electric Vehicle Technology, etc. Automotive Skills Development Council (ASDC) certification program for selected Trainees were also on offer. In its continuous endeavour to improve the employee experience, your Company has been implementing multiple digital initiatives towards automation of Employee life cycle management and also manages punching to billing for contract Labours through integrated Contract Labour Management System (CLMS).

The Mahindra Skill Excellence (MSE) initiative, a holistic approach to enhance the skill and capabilities of shop floor associates, is receiving good participation across manufacturing facilities. Total 2,758 associates across AFS participated for MSE competition during the year.

In an endeavour to improve quality, reduce cost, ensure safety and improve productivity, your Company's shop floor associates managed to generate on an average 12.5 ideas per person in the FY25.

This year, significant emphasis was also laid towards raising awareness on health and wellness of employees in addition to regular annual medical check-ups and health awareness activities. Diet food has become a way of life. The Company maintains an 'Employee Health Index' at an individual level, and this has been a useful tool in identifying employees who require focused counselling and monitoring.

Proactive and employee-centric shop floor practices, a focus on transparent communication of business goals, an effective concern resolution mechanism, and a firm belief that employees are the most valuable assets of the Company, are the cornerstone of your Company's employee relations approach. An 'open door policy' with constant dialogue to create win-win situations, have helped your Company build trust and harmony.

The industrial relations scenario continued to be largely positive across all the manufacturing locations. Bonus settlements were closed amicably for all the plants. The

sustained efforts towards building a progressive work culture resulted in zero production loss in the FY25 and helped create a collaborative, healthy and productive work environment.

Safety, Occupational Health and Environment

The Safety, Occupational Health & Environment (SOH&E) Policy of your Company has been in place. During the year under review, as part of an ongoing process, the Company commenced external physical assessments along with Integrated Management System (IMS) certifications as per the following standards: ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018, as per the schedule for its plants for re-certification and surveillance audits.

Management's commitment towards SOH&E is demonstrated by adopting all relevant updates (including recent notifications published) and incorporating them under digitization through the mCompliance 2.0 portal. The Company implemented various initiatives, including periodic reviews at the AFS Safety Conclave to ensure results are monitored by senior management. All new Emission Norms specified by the Government were adhered by following revised notifications and guidelines that comply with overall health and hygiene parameters. The manufacturing conditions and their status were assessed through periodic monitoring and measurement exercises conducted by external authorized agencies.

At manufacturing locations, various annual events such as Road Safety Week, National Safety Day / Month, Fire Service Week, Energy Conservation Week, and Sustainability Day were celebrated. Training programs were enhanced with new topics, introducing sustenance in safety using virtual reality (VR) programs for competency building, which were deployed to train employees. Following VR training, dexterity competitions were conducted for welding, sealer, and paint applications. Critical attributes and Reward & Recognition programs were implemented to honour professionals among employees at the workplace.

For manufacturing, seven initiatives were undertaken to enhance safety performance, including Safety Observation Tours by senior management, Safe Employee of the Month recognition, Hazard Identification and Risk Assessment for all non-routine activities, creation of audio and video visuals on safety, AI-based CCTV cameras, new project safety management, and digitization of safety observations.

Advancements were implemented by studying operational risk and preparing a Personal Protective Equipment (PPE) matrix for Associates and Self-Motivated Teams (SMTs). Basic

Hygiene Sensitization Programs for employees, Behavioural-Based training for all contractors, and training programs covering topics such as POSH, Human Rights, ABAC, and the Code of Conduct (COC) were also delivered.

As part of ongoing activities in Safety, Health, and Environment, competency building followed by on-the-job refresher training (OJT) was provided to all associates through Abhiyantriki / Dexterity training schools. Special focus was given to critical operations on safety and fire safety by introducing assessments for various categories of machinery and equipment.

The Company continues to emphasize safety best practices through Safety Observation Tours (SoT), monthly themes on safety topics arising from OHS risks identified, and lifestyle diseases including Diabetes Mellitus (DM), Hypertension, Nutrition, Emotional Wellbeing, and Physical Fitness. Activities like Pro Health Super Specialty ENT clinics, Pulmonary Function Test (PFT) camps, Lung Cancer Awareness Tea Table Talks, webinars on lung cancer awareness and prevention, and Nutrition & World Heart Day Celebrations were conducted. Under the project Aarambh, activities such as "Neuropathy Camp" and "Pro Health Women's Wellness Clinic" (Breast Oncology) were performed and reviewed periodically by senior management.

Horizontal deployment followed by Immediate Corrective Actions (ICA) and Permanent Corrective Actions (PCA) were implemented and reviewed by top management. There has been a reduction in the rate of overall Reportable and NonReportable Injuries compared with the previous year, and the Company achieved Zero Fire Incidents in FY25. Monthly theme-based Safety Drives were initiated and reviewed periodically by senior management. These monthly themes were revised, appreciated, and well-participated in sector-wise, with the Safe Employee of the Month for Associates being recognized.

A vigorous drive to eliminate overall at-risk behaviours was conducted by exercising Behaviour-Based Safety (BBS). To reduce fire risk, the Company carried out a fire load study and introduced upgraded fire dousing systems to strengthen fire protection measures and eliminate property losses. Fire risk reduction is monitored by setting revised targets, which are reviewed by senior management for risk mitigation.

All locations have administrative control signages at required areas for various activities covering different sites.

The Company follows the pattern defined by the Central Safety Council (CSC) of Mahindra and Mahindra Group of Companies by establishing a Cross-Functional Team (CFT). This year, the

focus was on covering all non-routine activities to eliminate significant risks through the assessment of The Mahindra Safety Way (TMSW). Various Safety, Health & Environment events were conducted on Founders' Day with the topic "Climate Action - Be the Change for Climate". Employees and their family members visited respective manufacturing locations within Mahindra Group Companies to create awareness about Safety, Health, Environment, and Sustainability.

Your Company has maintained both on-site and off-site plans along with a disaster management plan, adopting change processes. Gap audits were carried out for risk evaluation of business and its critical designated licensed storage areas. These audits were conducted by competent persons authorized by respective governing authorities for applicable compliance. Compliance was ensured through rigorous third-party audits covering Statutory Safety, Occupational Health and Environmental, Fire Safety, Electrical Safety Audits, Water Audits, and FSSAI Audits under the Food Safety and Standards Act (FSSI).

During the year under review, your Company achieved substantial improvements in Safety & Health Index results by adopting new initiatives.

To eliminate or minimize the overall environmental impact in line with the "Environmental, Social, and Governance" (ESG) practices, your Company continuously implemented new projects. Revised targets were included in the Balance Score Card and reviewed monthly. Various projects were implemented to achieve reductions in carbon footprint, Zero Waste to Landfill (ZWTL), and continuous monitoring of emissions (Ambient Air and Noise monitoring stations were installed). Reductions in carbon footprint were achieved through energy conservation projects and increasing the share of renewable energy. Energy costs were saved through measures such as the implementation of BLDC fans, energy-efficient lights, motor derating, VFD drive installation, avoiding resource wastage within machines, and enhancing chillers for energy conservation.

Your Company organized a Health and Wellness Stall on Founders' Day to create awareness among the supplier community, encouraging supplier consultation and participation to enable them to overcome current and future business risks.

During the year under review, your Company began complying with Extended Producer Responsibility Organizations (EPRO) targets established by the Central Government (Central

Pollution Control Board) through new EPR notifications on Plastic, Tyres, and Batteries. Efforts were made to eliminate plastic by substituting compostable plastic and recyclable packaging materials.

Your Company implemented various water neutrality initiatives, achieving recycling by processing water through RO systems and improving water balance. These measures resulted in marked improvements in groundwater levels.

Your Company continued its commitment to improving the wellbeing of employees and contract Associates through monthly Health themes. Various drives were conducted to enhance employees' skills and knowledge, with awareness sessions and webinars on topics such as general health, ergonomics, food pyramids, healthy recipes, visual education on good / bad food choices, and Tea Table Talks to reach maximum employees on the shop floor during teatime. Programs like the Mahindra Master Chef Competition and Surprise Basket LIVE Cooking Competitions further improved awareness.

Renowned faculties conducted programs for Mahindra family members, such as Mass Blood Pressure Screening Camps, Fibro Scans of Liver, BCA Analysis Camps, Tea Table Talks demonstrating stretching and relaxation exercises for mental well-being, World Heart Day celebrations followed by Health Talks by Cardiologists, World Mental Health Day Street Plays, Diabetic Retinopathy and Peripheral Neuropathy Camps, Benign Prostatic Hypertrophy and Prostate Cancer Camps, individual Physiotherapist Consultations, and International Yoga Day Celebrations.

The Company also initiated the Mahindra Cricket League for Men (Season III) and Women (Season II) to encourage physical fitness at the workplace. First aid refresher training programs were organized for employees and associates and videos were created to improve dexterity and posture for shop floor employees.

During the year, World Health Day was celebrated by arranging a Body Composition Analysis Camp, Nutritionist Consultations, Cardiology, Gastroenterology, and Neurology Clinics for all employees.

The Company aims to increase awareness of environmental protection among all stakeholders by celebrating World Ozone Day, World Environment Day, World Earth Day, World Water Day, Energy Conservation Week, and Water Conservation Week annually.

Certifications/Recertifications

All Plants of your Company underwent Surveillance Audits and were certified for ISO 45001:2018 and ISO 14001:2015 standards. Furthermore, all Plants implemented Integrated

Management Systems (IMS). Your Company was re-certified for Zero Waste to Landfill with a 99% and above conversion rate, demonstrating a commitment to maximizing waste recycling and protecting the environment.

Senior Management revises and reviews SOH&E performance periodically. The focus on new initiatives involving all stakeholders, coupled with management reviews, has helped your Company demonstrate further steps towards excellence in SOH&E performance.

K. BOARD & COMMITTEES Directors

As mentioned in the previous Annual Report, and during the year, Dr. Vishakha N. Desai (DIN: 05292671) ceased to be an Independent Director of the Company with effect from 1^st May, 2024, upon completion of her second term as an Independent Director of the Company.

Further, Mr. Vikram Singh Mehta (DIN: 00041197) ceased to be an Independent Director of the Company with effect from 8^th August, 2024 upon completion of his second term of five consecutive years from 8^th August, 2019 to 7^th August, 2024 as approved by the Shareholders at the Seventy-Third Annual General Meeting of the Company held on 7^th August, 2019.

Mr. Haigreve Khaitan (DIN: 00005290) also ceased to be an Independent Director of the Company with effect from 8^th August, 2024 upon completion of his first term of five consecutive years from 8^th August, 2019 to 7^th August, 2024 as approved by the Shareholders at the Seventy-Third Annual General Meeting of the Company held on 7^th August, 2019.

The Board has placed on record its deep appreciation of the invaluable services rendered by Dr. Vishaka N. Desai, Mr. Vikram Singh Mehta and Mr. Haigreve Khaitan during their tenure as Independent and Non-Executive Directors of the Company.

Appointment of Non-Executive Directors

As mentioned in the previous year's Annual Report, at the Seventy Eighth Annual General Meeting held on 31^st July, 2024, the Shareholders of the Company, basis the recommendation of the Board of Directors, approved the following:

• Appointment of Ms. Padmasree Warrior (DIN: 10387032) as an Independent Director of the Company for a term of 5 (five) consecutive years commencing from 17^th May, 2024 to 16^th May, 2029 (both days inclusive);

•    Appointment of Mr. Ranjan Pant (DIN: 00005410) as a Non-Executive and Non-Independent Director of the Company with effect from 17^th May, 2024, liable to retire by rotation;

•    Appointment of Mr. Sat Pal Bhanoo (DIN: 10482731) as a Non-Executive and Non-Independent Director of the Company representing Life Insurance Corporation of India, with effect from 17^th May, 2024, liable to retire by rotation.

Re-appointment of Dr. Anish Shah, Managing Director and Chief Executive Officer designated as "Group CEO and Managing Director" and Mr. Rajesh Jejurikar, Executive Director and CEO (Auto and Farm Sector)

As mentioned in previous year's Annual Report, at the Seventy Eighth Annual General Meeting held on 31^st July, 2024, the Shareholders of the Company, basis the recommendation of the Board of Directors, approved the following:

1.    Re-appointment of Dr. Anish Shah as the "Managing Director and Chief Executive Officer" designated as "Group CEO and Managing Director" of the Company with effect from 1^st April, 2025 to 31^st March, 2030 (both days inclusive), liable to retire by rotation.

2.    Re-appointment of Mr. Rajesh Jejurikar as a Whole Time Director designated as "Executive Director and CEO (Auto and Farm Sector)" of the Company, for a period commencing from 1^st April, 2025 to 24^th June, 2029 (both days inclusive), liable to retire by rotation.

Re-appointment of Ms. Shikha Sharma as an Independent Director

Pursuant to the recommendation of the Governance, Nomination and Remuneration Committee, the Board of Directors at its Meeting held on 16^th May, 2024, approved the re-appointment of Ms. Shikha Sharma (DIN: 00043265) as an Independent Director of the Company for a second term of 5 (five) consecutive years commencing from 8^th August, 2024 to 7^th August, 2029 (both days inclusive).

Further, the Shareholders of the Company at the Annual General Meeting held on 31^st July, 2024 basis the recommendation of the Board of Directors approved the aforementioned re-appointment of Ms. Shikha Sharma as an Independent Director of the Company.

Re-appointment of Two Independent Directors for a Second Term

The Shareholders of the Company at the 75^th Annual General Meeting held on 6^th August, 2021, basis the recommendation of the Board, approved:

•    Appointment of Ms. Nisaba Godrej (DIN: 00591503) as an Independent Director for a term of 5 (five) consecutive years commencing from 8^th August, 2020 to 7^th August, 2025.

•    Appointment of Mr. Muthiah Murugappan (DIN: 07858587) as an Independent Director for a term of 5 (five) consecutive years commencing from 8^th August, 2020 to 7^th August, 2025.

The Governance, Nomination and Remuneration Committee, on the basis of performance evaluation of Ms. Nisaba Godrej and Mr. Muthiah Murugappan and taking into account the external business environment, the business knowledge, acumen, experience and the substantial contribution made by them during their tenure, has recommended to the Board that the continued association of Ms. Nisaba Godrej and Mr. Muthiah Murugappan as Independent Directors would be beneficial to the Company.

Based on the above and their performance evaluation, the Board at its Meeting held on 5^th May, 2025 has recommended to the Shareholders for their approval, the re-appointment of Ms. Nisaba Godrej and Mr. Muthiah Murugappan as Independent Directors for a Second Term of 5 (five) consecutive years commencing from 8^th August, 2025 to 7^th August, 2030.

Brief Profiles of Ms. Nisaba Godrej and Mr. Muthiah Murugappan are provided in the Corporate Governance Report forming part of the Annual Report.

Ms. Nisaba Godrej and Mr. Muthiah Murugappan are not debarred from holding the office of Director on account of any order of SEBI or any other such authority.

The Company has received the requisite Notices from a Member in writing proposing their re-appointment as Independent Directors.

Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and Listing Regulations.

The Board is of the opinion that the Independent Directors of the Company hold highest standards of integrity and possess requisite expertise and experience required to fulfil their duties as Independent Directors.

In terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The Indian Institute of Corporate Affairs, Manesar ("MCA").

The Independent Directors are also required to undertake online proficiency self-assessment test conducted by IICA within a period of 2 (two) years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption.

The Independent Directors of the Company are exempt from the requirement to undertake online proficiency self-assessment test except Mr. Muthiah Murugappan who has successfully completed the online proficiency self-assessment test.

Lead Independent Director

Mr. Vikram Singh Mehta ceased to be the Independent Director of the Company with effect from 8^th August, 2024 and as such also ceased to be the "Lead Independent Director" of the Company, upon completion of his second term of five consecutive years from 8^th August, 2019 to 7^th August, 2024 as approved by the Shareholders at the Seventy-Third Annual General Meeting of the Company held on 7^th August, 2019.

Mr. T. N. Manoharan, Independent Director, Chairman of the Audit Committee, Governance, Nomination and Remuneration Committee, Risk Management Committee and Member of the Strategic Investment Committee of the Board is the Lead Independent Director of the Company with effect from 8^th August, 2024. The role and responsibilities of the Lead Independent Director are provided in the Corporate Governance Report forming part of this Annual Report.

Retirement by rotation

Mr. Anand G. Mahindra and Mr. Rajesh Jejurikar, retire by rotation and being eligible, offer themselves for reappointment at the 79^th Annual General Meeting of the Company scheduled to be held on 31^st July, 2025.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 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 including Independent Directors, Chairman of the Board, Group CEO and Managing Director and Executive Director and CEO (Auto and Farm Sector).

Feedback Mechanism

Feedback was sought by way of a structured questionnaire covering various aspects of the Board's functioning such as adequacy of time spent on strategic issues, effectiveness of Governance practices, setting corporate culture and values, execution and performance of specific duties, obligations and governance. The performance evaluation was carried out based on the responses received from the Directors.

Evaluation of Committees

The performance evaluation of Committees was based on criteria such as structure and composition of Committees, attendance and participation of member of the Committees, fulfilment of the functions assigned to Committees by the Board and applicable regulatory framework, adequacy of time allocated at the Committee Meetings to fulfil duties assigned to it, adequacy and timeliness of the Agenda and Minutes circulated, comprehensiveness of the discussions, effectiveness of the Committee's recommendation for the decisions of the Board, etc.

Evaluation of Directors and Board

A separate exercise was carried out by the Governance, Nomination and Remuneration Committee (GNRC) 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 Board was also carried out by the Independent Directors, taking into account the views of the Executive Directors and Non-Executive Directors. The performance evaluation of the Managing Director and the Executive Director of the Company was carried out by the Chairman of the Board and other Directors.

Criteria for Independent Directors

The performance evaluation of Independent Directors was based on various criteria, inter alia, including 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, ability to maintain independence, etc.

Performance Evaluation indicators for Independent Directors include contributing to and monitoring Corporate Governance Practices, introduce International Best Practices to address Business Challenges and Risks and Participation in Long Term Strategic Planning.

Criteria for Chairman

The performance evaluation of Chairman of the Board was based on various criteria, inter alia, including style of Chairman's leadership, effective engagement with other Board members during and outside the meetings, allocation of time provided to other Board members at the meetings, effective engagement with shareholders during general meetings, etc.

Criteria for Managing Director and Executive Director

The performance evaluation of Managing Director and Executive Director was based on various criteria, inter alia, including standards of integrity, fairness and transparency demonstrated, identification of strategic targets, anticipation of future demands and opportunities, resource staffing to meet short term and long term goals, engagement with Board members, updating Board on significant issues, commitment to organisational values, vision and mission, adaptation to meet changing circumstances, knowledge and sensitivity of stakeholders' needs within and outside the Company.

Results of Evaluation

The results of the Evaluation for the year under review were shared with the Board, Chairman of respective Committees and individual Directors. The results of Evaluation showed high level of commitment and Engagement of Board, its various Committees and Senior leadership.

As part of the outcome of the Performance Evaluation exercise it was noted that the Board is Independent, operates at a high level of Governance Standards and is committed to creating value for all stakeholders.

It was also noted that the Meetings of the Board are well planned and run effectively by the Chair, its Committees are managed well and continue to perform on their respective focus areas of Governance and Internal Controls.

As part of the Company's annual strategy planning process, the Company organised a Strategy Offsite with the Board to deliberate on various topics related to strategic planning, progress of ongoing strategic initiatives, risks to strategy execution and the need for new strategic programs to achieve the Company's long-term objectives.

The evaluation outcomes for the year under review were thoroughly deliberated upon with the Board Members, Committee Chairpersons, and individual Directors.

The Board Evaluation reaffirms the Board's strong commitment to governance and strategic oversight, as evidenced by the proactive leadership of its members, the effectiveness of Committees and the engagement of senior management. A key insight highlights the Board's independence and steadfast dedication to upholding rigorous governance standards, ensuring transparency and fostering sustainable value creation for stakeholders.

The evaluation also highlights the efficiency and strategic organization of Board Meetings, which are meticulously planned and effectively led by the Chair to ensure productive discussions and informed decision-making. Additionally, the Committees have also showcased effective management and performance, particularly in governance and internal controls, reflecting their dedication to maintaining high standards in their respective areas of focus.

Based on the outcome of the performance evaluation for the year under review, the Board has agreed to maintain the High Standards of Governance, Visibility and Interaction in the coming years.

The Directors expressed their satisfaction with the Evaluation process. During the year under review, GNRC ascertained and reconfirmed that the deployment of "questionnaire" as a methodology, is effective for evaluation of performance of the Board and Committees and individual Directors.

Retirement of Company Secretary and Compliance Officer

During the year, the Board at its Meeting held on 31^st March, 2025, noted and approved the Retirement of Mr. Narayan Shankar (ICSI Membership No. A8666), Company Secretary of the Company with effect from close of 1^st April, 2025, pursuant to his reaching the age of Superannuation and consequent cessation as Compliance Officer of the Company under Listing Regulations and also as the Key Managerial Personnel and Senior Management Personnel of the Company.

The Board expressed heartfelt gratitude for the exceptional contributions of Mr. Narayan Shankar during his remarkable tenure of almost 24 years with the Company. His expertise in Mergers, Restructuring, and Corporate Governance with an ability to manage multiple complex projects seamlessly and provide strategic guidance ensured smooth execution of key initiatives. He also played a crucial role in upholding and enhancing the standards of Corporate Governance across the Mahindra Group. Under his visionary leadership, the Company achieved several Governance Milestones, including the prestigious Golden Peacock Global Award for Excellence in Corporate Governance (under the Automobile Sector) and recognition by IiAS in the Leadership category of the Indian Corporate Governance Scorecard Assessment, both for last 4 consecutive years. During his tenure, the Company also secured the ICSI National Award for Excellence in Corporate Governance on three occasions. His unwavering dedication, integrity, and exemplary commitment to strengthening the governance framework have left an indelible mark on the organisation.

The Board conveyed its best wishes to Mr. Narayan Shankar as he embarks on the next chapter of his journey and recorded that his legacy of excellence and ethical leadership will continue to inspire the Mahindra Group.

Appointment of Interim Company Secretary

The Board at its Meeting held on 31^st March, 2025, also approved appointment of Ms. Divya Mascarenhas (ICSI Membership No. F10249), as Company Secretary of the Company and Compliance Officer under Listing Regulations (in the Interim capacity) designated as "Interim Company Secretary" who would also be Key Managerial Personnel and part of Senior Management Personnel with effect from 2^nd April, 2025.

Policies

Your Company has adopted the following Policies:

(a)    Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management;

(b)    Policy for remuneration of the Directors, Key Managerial Personnel and other employees.

Policy (a) mentioned above includes the criteria for determining qualifications, positive attributes and independence of a Director, identification of persons who are qualified to become Directors and who may be appointed in the Senior Management Team in accordance with the criteria

laid down in the said Policy, succession planning for Directors and Senior Management, and Policy statement for Talent Management framework of the Company.

Policy (b) mentioned above sets out the approach to Compensation of Directors, Key Managerial Personnel and other employees in the Company.

Policies mentioned at (a) and (b) above are available on the website and can be accessed in the Governance section at the Web-link: https://www.mahindra.com/investor-relations/ policies-and-documents.

Familiarisation Programme for Independent Directors / Non-Executive Directors

The Members of the Board of the Company are afforded many opportunities to familiarise themselves with the Company, its Management and its operations. The Directors are provided with all the documents to enable them to have a better understanding of the Company, its various operations and the industry in which it operates.

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.

Independent Directors meet the business and functional heads and provide their inputs and suggestions on strategic and operational matters at the quarterly Board / Committee Meetings.

Executive Directors and Senior Management provide an overview of the operations and familiarize the new NonExecutive Directors on matters related to the Company's values and commitments. They are also introduced to the organization structure, constitution of various committees, board procedures, risk management strategies, etc.

Strategic Presentations are made to the Board where Directors get an opportunity to interact with Senior Management. Directors are also informed of the various developments in the Company through Press Releases, emails, etc.

During the FY25, the Board at its Meeting held on 7^th and 8^th February, 2025, noted, deliberated and discussed various matters, inter alia, relating to Governance, Performance of the Group as whole, Growth Drivers, Technology, Company's Strategy for Auto and Farm Business and Group's other Businesses Strategic outlook.

This initiative achieves two key objectives: it allows Board members to leverage their expertise on strategic initiatives while also immersing them in the intricacies of execution and the challenges associated with specific Businesses.

In essence, this approach equips Board members with a rounded perspective on the strategic challenges the Group faces, the competitive advantages it aims to establish, and a clear overview of the execution strategy.

Additionally, this event fosters meaningful engagement between Board members and the Senior Leadership from various business segments and subsidiaries, promoting collaboration and insight sharing.

During the year, the Company transitioned to the Nasdaq BoardVantage portal, replacing the old Board Portal. This web-based platform is accessible to all Directors and includes all the necessary papers and documents, inter alia, including Agendas, Minutes, Presentations, etc.

This upgrade to the BoardVantage Portal from in-house Board Portal enhances the efficient and effective Conduct of Meetings and provides with accessibility and organisation of important documents and resources for the Board.

Pursuant to Regulation 25(7) of the Listing Regulations, the Company imparted various familiarisation programmes for its Directors including periodic review of Investments of the Company at Strategic Investment Committee Meetings, Regulatory updates, Industry Outlook, Business Strategy at the Board Meetings and changes with respect to Listing Regulations, Framework for Related Party Transactions, etc. at the Audit Committee Meetings, various Business Entity Risks, etc. at the Risk Management Committee Meetings, Product Launches and Showcase of New Vehicles, Session on Geopolitics, etc. The details as required under Regulations 46 and 62(1A) of the Listing Regulations are available on the website of your Company at the web link: https://www. mahindra.com/resources/FY25/AnnualReport.zip.

Directors' Responsibility Statement

Pursuant to section 134(5) of the Companies Act, 2013, your Directors, based on the representations received from the Operating Management and after due enquiry, confirm that:

(a)    in the preparation of the annual accounts for the Financial Year ended 31^st March, 2025, the applicable accounting standards have been followed;

(b)    they had in consultation with Statutory Auditors, selected accounting policies and applied them

consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2025 and of the profit of the Company for the year ended on that date;

(c)    they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and irregularities;

(d)    they have prepared the annual accounts on a going concern basis;

(e)    they have laid down adequate Internal Financial Controls to be followed by the Company and such Internal Financial Controls were operating effectively during the Financial Year ended 31^st March, 2025;

(f)    they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively throughout the Financial Year ended 31^st March, 2025.

Board Meetings and Annual General Meeting

A calendar of Meetings is prepared and circulated in advance to the Directors.

During the year 1^st April, 2024 to 31^st March, 2025, seven Board Meetings were held on: 16^th May, 2024, 31^st July,

2024, 7^th November, 2024, 7^th and 8^th February, 2025, 20^th February, 2025, 28^th February, 2025 and 31^st March,

2025.    The 78^th Annual General Meeting (AGM) of the Company was held on 31^st July, 2024 through Video Conferencing / Other Audio Visual Means.

Meetings of Independent Directors

The Independent Directors of your Company often meet before the Board Meetings without the presence of the Chairman of the Board or the Managing Director or the Executive Director or other Non-Independent Directors or Chief Financial Officer or any other Management Personnel.

These Meetings are conducted in an informal and flexible manner to enable the Independent Directors to discuss matters pertaining to, inter alia, 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.

Four Meetings of Independent Directors were held during the year and these meetings were well attended.

Audit Committee

As mentioned in the previous year's Annual Report, the Board at its Meeting held on 16^th May, 2024 re-constituted the Audit Committee with effect from 8^th August, 2024 and appointed Mr. Muthiah Murugappan as a Member in place of Mr. Vikram Singh Mehta upon completion of his tenure on 7^th August, 2024.

Further, after cessation of Mr. Haigreve Khaitan as Independent Director of the Company with effect from 8^th August, 2024 pursuant to completion of his first term of appointment, the Board at its Meeting held on 7^th November, 2024 noted the consequent changes in Audit Committee Composition with effect from 8^th August, 2024, which currently comprises of three Directors viz. Mr. T. N. Manoharan (Chairman of the Committee), Ms. Shikha Sharma and Mr. Muthiah Murugappan.

All the Members of the Committee are Independent Directors and possess strong accounting and financial management knowledge. The Company Secretary of the Company is the Secretary of the Committee.

All the recommendations of the Audit Committee were accepted by the Board.

L. GOVERNANCE Corporate Governance

Your Company has a rich legacy of ethical governance practices, many of which were established by the Company even before legal requirements came into effect. Your Company remains committed to transparency in all its transactions and places a high priority on business ethics.

Your Company continued to feature in the 'Leadership' category in the Corporate Governance Scorecard 2024 which is developed by Institutional Investor Advisory Services India Limited ("IiAS") with support from International Finance Corporation ("IFC") and BSE Limited ("BSE"). Further, your

Company has been awarded the prestigious 'Golden Peacock Global Award for Excellence in Corporate Governance' for the year 2024 (under the Automobile Sector).

A Report on Corporate Governance along with a Certificate from the Statutory Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Schedule V of the Listing Regulations forms part of this Annual Report.

Compliance Management

The Company has adopted a compliance management tool viz. mCompliance 2.0 Portal which provides system-driven alerts to the respective owners for complying with the applicable laws and regulations. Certificates capturing the compliance status of all laws and regulations applicable to the Company are generated at the end of each quarter and submitted by the Managing Director to the Board.

Ethics Framework

The Company's revised Code of Conduct ("the Code") for employees outlines the commitment to the principles of integrity, transparency, and fairness. It enables the Company and its employees to make the right choices and demonstrate the highest standards of integrity and ethical behaviour.

The Ethics & Governance framework is also anchored by clearly defined policies and procedures, covering areas such as Anti-Bribery and Anti-Corruption Policy (ABAC), Policy on Gifts & Entertainment (G&E), Policy on Prevention of Sexual Harassment at Workplace (POSH), Whistle-Blower Policy (WB), Business Partner Code of Conduct and Supplier Code of Conduct to ensure robust Corporate Governance.

The Code of Conduct and all the Company's policies are accessible on the Company's website; in the Governance section at the Web-link: https://www.mahindra.com/sites/ default/files/2024-06/Code-of-Conduct-Employees.pdf and on the Rise@Work, the Company's intranet as well as on the mobile app Me-connect.

New joiners are mandatorily required to undertake e-learning modules on the Code, POSH and ABAC. In addition to this, an Annual Compliance Declaration Module is mandated for the employees.

In order to achieve regular reinforcement of the Code and policies across the Company; the Ethics program has the

support of 135 Ethics Counsellors who help the Company to amplify the values which the Company stands for and facilitate regular conversations and training with their cohorts. The Ethics Counsellors are trained by subject matter experts (internal/external) on ethics and policies throughout the year. During the year, they have trained approximately 10,000 employees across various geographies on the Code and policies related to ABAC, G&E, POSH and WB. Further, your Company has driven sensitisation on the Code and other ethics policies vide ethical guidelines, emailers, videos, standees and posters across locations.

The Company's Vigil mechanism process is clearly defined for identifying and resolving breaches related to the Code of Conduct and the Company's Ethics Policies. It is regularly communicated throughout the Company vide the 'Speak Up Campaign'. Data relating to such breaches is reviewed by the Corporate Governance Council and the Audit Committee that helps in determining the allocation of resources for future policy development, any review of policies, process improvement, training and awareness initiatives. The Corporate Governance Council ensures that the Ethics & Governance framework is executed effectively. The Group Ethics and Governance Committee and Business Ethics and Governance Committees help to ensure decisions on substantiated cases are taken in a fair, just and consistent manner across various functions of that business.

Vigil Mechanism

The Vigil Mechanism as envisaged in the Companies Act, 2013, read with the Rules prescribed thereunder, and the Listing Regulations is implemented through the Company's Whistle-Blower Policy. The Whistle-Blower Policy of your Company is available on the Company's website and can be accessed in the Governance section at the Web-link: https://www.mahindra.com/sites/default/ files/2024-05/Whistle-blower-Policy-Revised.pdf

Revised.pdf.

It enables the Directors, employees and all stakeholders of the Company to report genuine concerns (about unethical behaviour, actual or suspected fraud, or violation of the Code) and provides for adequate safeguards against victimisation of persons who use such mechanism and makes provision for direct access to the Chairman of the Audit Committee.

A quarterly report on the whistle-blower complaints, as received, is placed before the Audit Committee for its review.

During the year, the Company received 126 whistle-blower complaints, out of which 116 complaints were investigated

and appropriate actions were taken and investigations were underway for the remaining 10 complaints. All complaints are tracked and monitored on timely basis.

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company adopts a zero-tolerance approach towards sexual harassment at workplace. A detailed Prevention of Sexual Harassment at Workplace Policy ("POSH Policy") is in place as per the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("the Act"). The POSH Policy of the Company is available on the website of the Company and can be accessed in the Governance section at the Web-link: https://www. mahindra.com/policy-on-prevention-of-sexual-harassment.

The POSH Policy is also available in 8 vernacular languages. All employees (permanent, contractual, temporary, trainees) as defined under the Act are covered in this Policy. The POSH Policy is gender inclusive, and the framework ensures complete anonymity and confidentiality.

Internal Complaints Committees ("IC") have been constituted to redress complaints of sexual harassment and the Company has complied with the provisions relating to the constitution of IC under the Act. While maintaining the highest governance norms, IC are constituted for various locations. Half of the total members of the IC are women. The external members with requisite experience in handling such matters are also part of the IC. The IC is presided over by a senior woman employee in each case. Inquiries are conducted and recommendations are made by the IC at the respective locations. The IC is updated on judicial trends and trained regularly on the nuances of the Act.

During the fiscal year under review, 22 complaints alleging sexual harassment were filed and 19 were resolved by taking appropriate actions as per the provisions of the Act. 3 complaints are pending inquiry as of 31^st March, 2025. All complaints are tracked and monitored on timely basis.

Continuous awareness in this area has been created through the POSH campaign reiterating Mahindra's commitment to providing a safe workplace to all its employees. During the year, the Company organised sensitization and awareness programs vide inductions for new joiners, e-learning modules for all employees' trainees, associates including sending emailers, creating standees and posters to sensitise all

employees to conduct themselves in a professional manner. Further, virtual and classroom training sessions were conducted by the Company's Ethics Counsellors.

Business Responsibility and Sustainability Report

In terms of Regulation 34 of the Listing Regulations, Top 1,000 listed entities based on market capitalization shall submit a Business Responsibility and Sustainability Report ("BRSR") in the format as specified by SEBI from time to time.

Top 250 Listed Entities are mandatorily required to undertake assessment or assurance of BRSR Core for the FY25.

The Company has prepared the BRSR for the FY25 in accordance with the format as prescribed by SEBI vide its Master Circular dated 11^th November, 2024 (including amendments thereto) along with the Industry Standards on BRSR Core as prescribed by SEBI dated 20^th December, 2024.

The BRSR aims to provide quantitative and standardized disclosures on ESG parameters, facilitating meaningful comparisons across companies, sectors, and time periods. These disclosures are designed to empower investors to make informed investment decisions. The BRSR shall also enable the Company to engage more meaningfully with stakeholders, to look beyond financials and towards social and environmental impacts.

The BRSR of your Company for the FY25 forms part of this Annual Report as required under Regulation 34(2)(f) of the Listing Regulations.

Your Company firmly believes that sustainable and inclusive growth is achievable by leveraging environmental and social responsibility. Your Company is dedicated to setting ambitious targets while enhancing economic performance to ensure both business continuity and rapid growth.

Your Company is committed to leverage 'Alternative Thinking' as a strategic approach to build competitive advantage in achieving high shareholder returns through customer centricity, innovation, good governance and inclusive human development while being sensitive to the environment.

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 organizational structure for managing and reporting on risks.

Your Company has constituted a Risk Management Committee of the Board which is authorized to monitor and review risk management plan and risk certificate. The Committee is also empowered, inter alia, to review and recommend to the Board 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 include review of risks and Risk Management Policy at periodic intervals.

Your Company has developed and implemented a Risk Management Policy which is approved by the Board. The Risk Management Framework of the Company includes identification of risks, including cyber security and related risks and also 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 organization.

M. CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY

Corporate Social Responsibility (CSR)

Over the years, your Company has measured success not just in business achievements, but also by the positive impact it creates in the lives of individuals and communities. Your Company's story is interwoven with India's progress, built on the belief that investing in human potential and addressing national priorities is the cornerstone of nationbuilding. This aligns with the Company's purpose to drive positive change in the lives of our communities. Through the flagship CSR initiatives focussed on women and girls, the Company is targeting key constituencies essential for nation building.

Your Company sees the impact of its work in the growing confidence of young girls as they develop leadership skills, in the success of first-generation women professionals gaining job-ready skills thereby securing lucrative jobs, and in the rural communities where farmers benefit from enhanced

livelihood income through water conservation programmes. Together, these interconnected initiatives create a powerful ecosystem of opportunity where individual empowerment and community development reinforce each other, maximizing the social impact.

Your Company is deeply committed, supporting not just foundational learning but shaping the future of higher education in India. By supporting institutions like Mahindra University, your Company fosters ecosystems where academic excellence converges with real-world application, preparing the next generation of leaders and innovators. Further reinforcing this commitment, your Company's merit and need-based scholarship programs ensure that young people can Rise to their potential regardless of their circumstances.

Youth skilling in the Automotive Sector is a key focus area for your Company's commitment to building a future-ready, industry-aligned workforce. As part of this commitment, your Company has supported upgradation of infrastructure, developed an industry-aligned curricula and trained both students and faculty across 110 Industrial Training Institutes ("ITIs") in India. These initiatives not only enhance workforce readiness but also foster inclusive growth, contributing meaningfully to India's vision of becoming a Viksit Bharat by 2047.

As your Company moves forward, it will continue to leverage CSR as a force for good by deepening stakeholder engagement, advancing the UN Sustainable Development Goals (SDGs), and building a more equitable India. The Company aims to ensure that everyone has the opportunity to Rise. #TogetherWeRise

The impact of some of the flagship CSR initiatives your Company invested in FY25 is shown below:

Empowering Girls

Starting from the academic year 2024-25, Project Nanhi Kali has embarked on a new journey to empower girls from lower-income backgrounds by supporting them from Grades 6 to 10 through targeted educational and sports initiatives. In alignment with the National Education Policy 2020, the program now emphasizes holistic development by integrating curricular and extracurricular activities in schools, helping girls transition more seamlessly from school to higher education and employment opportunities. Project Nanhi Kali has also introduced two new programs: Skill Bridge, a program on English language

and job preparedness for adolescent girls, and Teacher Training program on 21^st century skills, in line with the recommendations of the National Education Policy 2020.

In FY25, Project Nanhi Kali supported the education of 1,79,175 underserved girls. Of these, 1,70,793 girls participated in the academic interventions during school hours and sports training programme after school hours in 1,878 schools across 20 districts in 7 states of India. The Mahindra Group supported 77,112 girls of which your Company supported 39,373 girls. An additional 8,382 girls were trained under the Skill Bridge program conducted in 4 states. Of these, The Mahindra Group supported 1,008 girls, and your Company supported 776 girls. Additionally, 1,000 school teachers from non-Nanhi Kali schools were trained under the Teacher Training program in 3 states, fully supported by your Company. This Teacher Training program will further impact the lives of an additional 1,00,000 girls.

Over the years, Project Nanhi Kali has been able to improve attendance, reduce dropout rates, and enhance the learning levels of girls. Since its inception, Project Nanhi Kali has supported the education of 8,74,266 underprivileged girls.

Empowering Women

Since its inception, Project Kaabil, the Company's flagship women's empowerment initiative has positively impacted over a million women (10,09,592 women), marking a significant milestone and demonstrating advancing women's progress. Project Kaabil follows a dual approach through both in-person and digital interventions, enabling your Company to skill over 2,44,485 women in FY25 across 3 pathways as shown below:

Employability Skilling: The Mahindra Group's flagship employability skilling program under Project Kaabil provides digital, life and soft skills training focused on communication and critical thinking. This enables candidates to navigate and secure formal wage employment, thereby making them more "job-ready" and employable. The training is provided to women who are studying in their final year in Government/Government-aided colleges, ITIs, Polytechnic and other Institutes at a Pan-India level. In FY25, this initiative reached out to 1,75,989 women across 20 states, out of which The Mahindra Group supported 1,37,268 women. Of these, 89,400 women were supported through your Company.

Domain Skilling: Under this initiative of Project Kaabil, the candidates are trained majorly in the domains of Automotive, IT/ITES, Hospitality, Healthcare, Retail, Entrepreneurship and Apparel sectors across 15 states, equipping them with vocational skills required to secure jobs in these industries. In FY25, this initiative reached out to 12,242 women out of which 11,792 women were trained with support of the Mahindra Group. Of these, 10,639 were supported through your Company.

Agri Skilling:

Regenerative Agriculture: This initiative of Project Kaabil has enabled women farmers to use regenerative agricultural practices and undergo bio-diversity training to improve soil fertility and increase productivity. This has ensured food and nutrition security for their families, along with enhanced income levels. The Mahindra Group supported 52,443 women farmers in FY25 from Muktsar Sahib and Tarn Taran in Punjab, Shravasti in Uttar Pradesh, as well as Araku in Andhra Pradesh. Of this, 50,000 women were supported by your Company. This intervention helped women farmers reduce their agriculture input costs and in future will help them enhance their livelihood income with sale of crops.

Farm Skilling: Under the farm skilling initiative of PRERNA, your Company supported 3,811 women farmers by training them in effective farming practices and providing them with advisory services which include soil health, access to gender-friendly farm equipment, linkages to Government welfare support initiatives, resource efficient agriculture methodologies, and increasing crop productivity.

Technological Integration: In addition to the physical intervention programs, the Company has recently launched a technical integration to create outreach and achieve scale via a job placement portal for young women. Kaabil app and website is a digital platform for young women entering the job force with skill development training modules, hyperlocal job opportunities, career counselling and mentorship to enable women to navigate hyper-local jobs at entry level and stay invested towards longer term career opportunities they may otherwise not be familiar with.

Environment Conservation

Jal Samriddhi (Water conservation) has been a flagship CSR initiative across the business locations of the Company. The

 

focus is on capacity building of farmers and community in creating/rejuvenating water harvesting structures for water conservation, soil erosion prevention, improving soil health, and crop diversification. These efforts increased water harvesting potential for irrigation and drinking by positively impacting surface and ground water levels.

In FY25, under Jal Samriddhi project, your Company undertook creation and renovation of 611 water harvesting structures resulting in 3,758.18 lakh litres of water harvesting potential and an increase in irrigation potential across 1,942.2 hectares. Cumulatively 15,173.45 hectares were covered under water management initiatives and more than 48,781 farmers and community members have benefitted through water conservation. This includes a collaborative project undertaken with NABARD in Kadwa river basin, Igatpuri (Nashik District) which is a long term project aimed to ensure water security in the water scarce area. In total, 117 villages were covered across 7 states.

Employee Volunteering

Employee volunteering continues to be a vital component of your Company's CSR efforts. Through the Employee Social Options (Esops) and MySeva platforms, the Company's employees contributed to various social causes including blood donation drives, tree plantation, cleanliness drives, health check-up camps, supported government schools, and diverse community engagement activities. The Mahindra Group employees invested 3,82,405 person hours through the Esops Platform (Company organized), and 1,28,282 person hours were contributed through MySeva (individual social responsibility). Your Company's employees contributed 69,471 person hours towards a variety of social causes, of which 69,267 person hours were invested through Esops and 204 person hours were contributed through MySeva. The third edition of Mahindra Volunteering Day was held on 5^th December, 2024, wherein 37,357 enthusiastic volunteers contributed 1,14,996 person hours in various activities.

During the last Financial Year, your Company was humbled to receive the following awards for its contribution to society, further motivating to serve its communities.

1.    CII Sustainability award for 'CSR Domain Excellence' Category (December 2024)

2.    'One Decade Excellence in CSR Award' by Honourable Governor of Maharashtra (July 2024)

3.    ' Beyond Business Impact Award' by Population First for Project Nanhi Kali (March 2025)

4.    Mahatma Award for Gender Equality for Project Kaabil presented to Mahindra and Mahindra Limited and Centum Foundation (October 2024)

5.    Brandon Hall Group Gold Award for 'Best Corporate Outreach to Promote Diversity, Equity, Inclusion, and Belonging in Communities' Category for Project Employability Enhancement Training (EET)- Project Kaabil to Mahindra and Mahindra Limited and Centum Foundation (August 2024)

6.    'Best CSR Initiative' at ITOTY CSR Award for Project Jal Samriddhi to Swaraj Division (July 2024)

7.    ' Best CSR Initiative' at ITOTY CSR Award for Project SDC Mahindra to Mahindra Tractors (July 2024)

8.    CSR Times Award to Project Integrated Village Development to Swaraj Division (August 2024)

9.    Government of Rajasthan Bhamashah Award for Project Gyandeep to Farm Division Jaipur (September 2024)

10.    Government of Rajasthan Bhamashah Award for Project Gyandeep to Swaraj Division (September 2024)

CSR Policy

The Corporate Social Responsibility Committee had formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) which was subsequently adopted by it and is being implemented by the Company. The CSR Policy including a brief overview of the projects or programs undertaken by the Company can be accessed in the Governance section of the website, the link of the same is https://www.mahindra.com/investor-relations/policies-and-documents.

CSR Committee

As mentioned in the previous year's Annual Report, the Board of Directors at its Meeting held on 18^th and 19^th March, 2024 re-constituted the Corporate Social Responsibility Committee (CSR Committee). Dr. Vishakha N. Desai ceased to be the Chairperson and Member of the Committee with effect from 1^st May, 2024, upon completion of her second term as an Independent Director of the Company and Mr. Vikram Singh

Mehta was inducted in her place as Chairman of the CSR Committee.

Further, the Board at its Meeting held on 16^th May, 2024, re-constituted the CSR Committee by inducting Ms. Padmasree Warrior, Independent Director as a Member with effect from 17^th May, 2024 and appointing Mr. Muthiah Murugappan, Member of the CSR Committee as the Chairman of the CSR Committee with effect from 8^th August, 2024 pursuant to cessation of Mr. Vikram Singh Mehta as an Independent Director of the Company and as Chairman and Member of the CSR Committee with effect from 8^th August, 2024.

The CSR Committee currently comprises of Mr. Muthiah Murugappan (Chairman), Mr. Anand G. Mahindra, Dr. Anish Shah, and Ms. Padmasree Warrior.

The Committee, inter alia, reviews and monitors the CSR as well as Business Responsibility and Sustainability activities.

During the year under review, your Company spent Rs. 152.36 crores on CSR activities. The amount equal to 2% of the average net profit for the past three financial years required to be spent on CSR activities was Rs. 152.23 crores. The Board has considered the Impact Assessment Reports at its meeting held on 5^th May, 2025. The detailed Annual Report on the CSR activities undertaken by your Company in the FY25 along with the Executive Summary for Impact Assessment Reports of the applicable projects, is annexed herewith and marked as Annexure VI.

The complete Impact Assessment Reports of the applicable projects can be accessed at the Web-link: https://www. mahindra.com/resources/FY25/AnnualReport.zip.

Sustainability

Sustainability continues to be a big focus area for the Company with the intent to integrate it as a part of the core business strategy. During the year under review, the 17^th Sustainability Report for the year FY24 was released. The Report was externally assured by DNV Business Assurance India Private Limited and prepared in accordance with the GRI (Global Reporting Initiative) Standards.

Your Company continues to focus on building 'Planet Positive' Mahindra businesses by focusing on three key pillars, namely greening ourselves, decarbonizing the industry and rejuvenating nature. Under the 1^st pillar of greening ourselves, the Company is working to reduce direct

environmental impact of its operations by increasing share of renewable energy, improving energy efficiency, focusing on water stewardship, and embedding material circularity principles and working to minimize waste generation and ensure no waste goes to landfill. Under decarbonising the industry, actions are being taken to offer green products and services such as a transition to electric vehicles and alternate fuel portfolio, while also enabling supply chain to follow environment friendly practices and even working on areas like end of vehicle recycling. Beyond the industry boundary, to rejuvenate nature and create positive social impact, the Company aims in driving sustainable farming practices via its business and CSR programs and is investing to ensure biodiversity protection and restoration. All group companies have set prepared plans related to the 'Planet Positive' framework. The targets have also been reviewed in Group Sustainability Council chaired by Dr. Anish Shah, Group CEO and Managing Director.

The Company also continues to lead on ESG reporting and disclosure. The Company has done detailed ESG disclosure under Dow Jones Sustainability Index (DJSI) reporting framework, Carbon Disclosure Project (CDP), World Economic Forum's (WEF) stakeholder capitalism metrics to name a few.

Your Company has continued to drive advocacy towards climate action at both national and international forums via deep engagement with global and domestic climate organisations, industry association and government engagement. The Company is also committed to Science Based Target, an initiative to restrict average global temperature rise in alignment with Paris Climate Change Agreement. The Group is committed to become Carbon Neutral by 2040 or sooner. The Sustainability performance of your Company for the FY25 will be elaborated in detail in the GRI Report which is under preparation and will be ready for release shortly.

Your Company was also recognized for its leadership position in sustainability, during the year under review:

• The Company achieved Leadership Status in the #DJSI World Index 2024 for the Automobile Industry, also becoming the 1^st Indian 'Auto' Company to enter World Index for 4 consecutive years, 1/7 auto companies globally part of World Index. It was also included in S&P Global Sustainability Yearbook 2025.

•    A reputed global agency 'Globescan' acknowledged the Company as one of the leading organizations in APAC region for seamlessly integrating sustainability into the business strategy.

•    The Company was honoured in the inaugural edition of TIME's World's Most Sustainable Companies 2024 list. This recognition spans 30 countries, with over 5,000 companies assessed.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure VII and forms part of this Report.

N. SECRETARIAL Share Capital

During the year under review, the Authorised Share Capital of the Company stood increased to Rs. 15,459.50 crores divided into 27,86,90,00,000 Ordinary (Equity) Shares of Rs. 5 each and 25,00,000 Unclassified shares of Rs. 100 each and 150,00,00,000 Preference Shares of Rs. 10 each, pursuant to Scheme of Merger by Absorption of Mahindra Heavy Engines Limited and Mahindra Two Wheelers Limited and Trringo.com Limited, wholly owned subsidiaries of the Company, with the Company and their respective shareholders becoming effective from 6^th June, 2024.

The issued, subscribed and paid-up Share Capital of the Company stood at Rs. 621.76 crores divided into 124,35,28,831 Ordinary (Equity) shares of Rs. 5 each. There was no change in the issued, subscribed and paid-up Share Capital of the Company during the year under review.

Compliance with the provisions of Secretarial Standard 1 and Secretarial Standard 2

The applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to 'Meetings of the Board of Directors' and 'General Meetings' respectively, have been duly complied by your Company.

Annual Return

Pursuant to section 134(3)(a) and section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, a copy of the Annual Return is placed on the website of the Company and can be accessed at the Web-link https://www.mahindra.com/ resources/FY25/AnnualReport.zip.

0.    POLICIES

The details of the Key Policies adopted by the Company are mentioned at Annexure VIII to the Board's Report.

P.    PROCEEDINGS UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016)

There is one proceeding initiated / pending against your Company under the Insolvency and Bankruptcy Code, 2016 which does not materially impact the business of the Company. The Company is contesting the matter based on merits.

Q.    GENERAL

Neither the Managing Director nor the Executive Director received any remuneration or commission from any of the subsidiaries of your Company.

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions / events on these items during the year under review:

1.    Issue of equity shares with differential rights as to dividend, voting or otherwise.

2.    Issue of Shares (including Sweat Equity Shares) to employees of the Company under any Scheme save

and except Employees Stock Option Schemes (ESOS) referred to in this Report.

3.    Significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and the Company's operation in future.

4.    Voting rights which are not directly exercised by the employees in respect of shares for the subscription/ purchase of which loan was given by the Company (as there is no scheme pursuant to which such persons can beneficially hold shares as envisaged under section 67(3)(c) of the Companies Act, 2013).

5.    There has been no change in the nature of business of your Company.

6.    The Company has not made any one-time settlement for loans taken from the Banks or Financial Institutions, and hence the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof is not applicable.

7.    There was no revision of financial statements and Board's Report of the Company during the year under review.

---

Mar 31, 2024

The Directors are pLeased to present their Thirty-Fourth Report together with the audited financial, statements of your Company for the FinanciaL Year ended 31^st March 2024 ("FY2024").

Financial Summary and Operational Highlights

Particulars	Consolidated		% Change	Standalone		% Change
Â	FY2024	FY2023	Â	FY2024	FY2023	Â
Total Income	15,970.32 |	12,832.40	24.45	13,562.42	11,056.09	22.67
Less: Finance Costs	6,959.20	5,094.30	Â	6,426.94	4,576.72	Â
Expenditure	6,204.20	4,695.64	Â	4,551.30	3,539.56	Â
Depreciation, Amortization and Impairment	274.85	225.96	Â	228.71	187.23	Â
Total Expenses	13,438.25	10,015.90	34.17	11,206.95	8,303.51	34.97
Profit before exceptional items and taxes	2,532.07	2,816.50	Â	2,355.47	2,752.58	Â
Share of profit of Associates & Joint Ventures	56.11	43.32	Â	Â
Exceptional items	-	(56.06)	Â	-	(54.51)	Â
Profit Before Tax	2,588.18	2,803.76	(7.69)	2,355.47	2,698.07	(12.70)
Less: Provision For Tax	Â			Â
Current Tax	716.10 |	498.15	Â	664.93 |	486.28	Â
Deferred Tax	(70.97)	234.41	Â	(69.08)	227.47	Â
Profit After Tax for the Year	1,943.05	2,071.20	(6.19)	1,759.62	1,984.32	(11.32)
Less: Profit for the year attributabLe to Non-controlling interests	10.36	(120)	Â	Â
Profit for the Year attributable to owners of the Company	1,932.69	2,072.40	(6.74)	1,759.62	1,984.32	(11.32)
BaLance of profit brought forward from earlier years	7,417.35	6,146.97	Â	6,376.60	5,247.99	Â
Add: Other Comprehensive income /(Loss)	(6.71)	(13.35)	Â	(4.97)	(12.92)	Â
BaLance avaiLabLe for appropriation	9,343.33	8,206.02	Â	8,131.25	7,219.39	Â
Less: Appropriations	Â			Â
Dividend paid on Equity Shares	740.23 |	443.87	Â	741.32 |	444.79	Â
Transfer to Statutory Reserves	352.94	402.86	Â	352.00	398.00	Â
Add/Less: Other Adjustments	Â			Â
Gross obLigation at fair vaLue to acquire Non-controlling interest	-	59.41	Â	-	-	Â
Changes in Group's Interest	114.13	(135)	Â	-	-	Â
BaLance carried forward to baLance sheet	8,364.29	7,417.35	Â	7,037.93	6,376.60	Â
Net worth	19,933.25	18,560.09	7.40	18,157.49	17,088.91	6.25

Consolidated Performance Highlights

•    Total. Income increased by 24.45% to ' 15,970.32 crore for FY2024 as compared to ' 12,832.40 crore in FY2023.

•    Profit Before Tax ("PBT") decreased by 7.69% to ' 2,588.18 crore for FY2024 as compared to ' 2,803.76 crore in FY2023.

•    Profit After Tax ("PAT") (Net of non-controLLing interest) decreased by 6.74% to ' 1,932.69 crore for FY2024 as compared to ' 2,072.40 crore in FY2023.

Standalone Performance Highlights

•    During the year under review, the Company has disbursed Loans of ' 56,208.22 crore as against ' 49,541.38 crore during the previous year, an increase of 13.46% over the same period in previous year.

•    Total. Income increased by 22.67% to ' 13,562.42 crore for the year ended 31^st March 2024 as compared to ' 11,056.09 crore for the previous year.

•    PBT decreased by 12.70% to ' 2,355.47 crore as compared to ' 2,698.07 crore for the previous year.

•    PAT decreased by 11.32 % to ' 1,759.62 crore as compared to ' 1,984.32 crore in the previous year.

•    The Assets Under Management ("AUM") stood at ' 1,02,596.77 crore as at 31^st March 2024 as against ' 82,769.87 crore as at 31^st March 2023.

Gross Stage 3 improved due to focused collection initiatives and macro tailwinds. The Gross Stage 3 Loan assets stood at ' 3,490.90 crore, Lower than that on 31^st March 2023 (' 3,717.10 crore). The Gross Stage 3 percentage to Business Assets decLined from 4.49% as at 31^st March 2023 to 3.40% as at 31^st March 2024.

Material changes from the end of the financial year till the date of this report

No material changes and commitments have occurred after the cLosure of the FinanciaL Year 2023-24 tiLL the date of this Report, which wouLd affect the financiaL position of your Company.

ECL and other updates

The Company has been updating the Expected Credit Loss modeL ("ECL") with the Latest set of data inputs on reasonable periodic intervals to capture the expected significant changes in macro-economic growth prospects and shifts in market drivers and changes in risk profiLe of customer credit exposures. During the current year the Company has updated its ECL modeL by incLuding muLti-factor macro-economic variabLes and product cLassification of Loan portfoLio for its retaiL vehicLe Loans and used industry LeveL benchmark aLLowance rate for its reLativeLy new portfoLio under Leasing business, which has been recommended by the Audit Committee and approved by Board of Directors. The Company hoLds provision towards expected credit Loss on Loans as at 31 March 2024 aggregating to ' 3,401.59 crore (as at 31 March 2023: ' 3,287.83 crore).

The Company's net Stage-3 assets ratio stood at 1.28% as at 31^st March 2024 as against 1.87% as at 31^st March 2023.

Transfer to Reserves

The Company has transferred an amount of ' 352 crore to the Statutory Reserves, in compliance with section 45-IC of the Reserve Bank of India ("RBI") Act, 1934. Further, the Board of your Company has decided not to transfer any amount to the GeneraL Reserve for the year under review. An amount of ' 7,037.93 crore is proposed to be retained in the Profit and Loss Account of the Company.

©

Considering good performance and strong cash flows, your Directors are pleased to recommend a dividend of ' 6.30 per equity share (315%) on the face value of ' 2 each, for FY2024 vis-avis 300% dividend in FY2023.

The Company maintains sufficient Liquidity buffer to fuLfiL its obLigations arising out of issue of debentures. The Company being an NBFC, is exempt from transferring any amount to debenture redemption reserve in respect of privateLy pLaced or pubLic issue of debentures, as per the provisions of section 71 of the Companies Act, 2013 read with RuLe 18 of the Companies (Share CapitaL and Debentures) RuLes, 2014. In respect of secured Listed non-convertibLe debt securities, the Company maintains 100% security cover or higher security cover as per the terms of Information Memorandum, GeneraL Information Document ("GID"), Key Information Document ("KID"), as the case may be and/or Debenture Trust Deed, sufficient to discharge the LiabiLity towards principaL amount and interest thereon.

Dividend

Considering good performance and strong cash flows, your Directors are pLeased to recommend a dividend of ' 6.30 per equity share (315%) on the face vaLue of ' 2 each, for FY2024 vis-a-vis 300% dividend in FY2023. Dividend is subject to approvaL of the Members at the ensuing AnnuaL GeneraL Meeting. The dividend outgo for FY2024 wiLL absorb a sum of ' 778.38 crore, which constitutes 44.2% pay out of Company's StandaLone Profits for FY2024.

The Company has not paid any Interim Dividend during the financiaL year under review.

The dividend recommended is in accordance with the Company's Dividend Distribution Policy, within the ceiling and in compLiance with the framework prescribed in RBI guideLines on DecLaration of Dividend by NBFCs.

Tax on Dividend

In terms of the provisions of the Income-tax Act, 1961, the Company wiLL make payment of dividend after deduction of tax at source ("TDS") as per the prescribed rates, to those sharehoLders whose names appear as beneficiaL owner/ member in the List of beneficiaL owners to be furnished by NationaL Securities Depository Limited/ CentraL Depository Services (India) Limited in case of shares heLd in demateriaLised form, or in the Register of Members in case of shares heLd in physicaL form, as at the cLose of business hours on 16^th JuLy 2024 (Book CLosure).

Unclaimed dividend transferred to Investor Education and Protection Fund

In terms of the provisions of Sections 124 and 125 of the Companies Act, 2013 ("the Act") read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) RuLes, 2016, during the year under review, the Company has transferred an amount of ' 7,87,140 being the uncLaimed dividend for FY2016 to the Investor Education and Protection Fund ("IEPF"). The detaiLs of totaL amount(s) Lying in unpaid dividend account of the Company for Last seven years and due to be transferred to IEPF, is mentioned in the Report on Corporate Governance, forming part of this AnnuaL Report.

Dividend Distribution Policy

In compLiance with the provisions of ReguLation 43A of the SEBI (Listing ObLigations and Disclosure Requirements) ReguLations, 2015, the Company has formuLated Dividend Distribution PoLicy, setting out criteria and circumstances to be considered by the Board whiLe recommending dividend to the sharehoLders. The Dividend Distribution PoLicy provides for eLigibiLity criteria, aspects to be considered by the Board whiLe recommending dividend, ceiLing on dividend payout ratio etc. in accordance with the Reserve Bank of India guideLines on decLaration of dividend dated 24^th June 2021.

As set out in Dividend Distribution PoLicy, the Company's dividend payout is determined based on avaiLabLe financiaL resources, investment requirements and optimaL sharehoLder return. Within these parameters, the Company endeavours to maintain a totaL dividend pay-out ratio in the range of 20% to 30% of the annuaL standaLone Profit after Tax ("PAT") of the Company.

The Dividend Distribution PoLicy is appended as “Annexure I" and forms part of this AnnuaL Report.

The Dividend Distribution PoLicy can aLso be accessed on the Company's website at the web-Link: https://www. mahindrafinance.com/investor-reLations/poLicy-and-sharehoLder-information#mmfsL-poLicies

Operations

Your Company's main Line of business is financing of automobiLes and tractors for customers who use them mainLy for earning their LiveLihood and for their personaL mobiLity. It aLso focusses on other businesses Like pre-owned car Loans, SME financing, insurance broking (through its subsidiary, Mahindra Insurance Brokers Limited), mutuaL fund distribution (through its JV, Mahindra ManuLife Investment Management Private Limited), fixed deposits etc. AdditionaLLy, your Company is aLso foraying into other areas Like Leasing, consumer finance and Loan against property. By offering a wide range of easy and affordabLe products and services taiLored to fit their

cashflow cycLes, your Company continues to be a vitaL financier to its customers in semi-urban and ruraL areas. Your Company has retained its Leadership position in financing the Mahindra range of vehicLes and tractors. AdditionaLLy, your Company is expanding its connect with other Leading Car OriginaL Equipment Manufacturers ("OEMs").

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Your Company has retained its leadership position in financing the Mahindra range of vehicles and tractors. Additionally, your Company is expanding its connect with other leading Car Original Equipment Manufacturers ("OEMs").

Building Blocks for Growth, Efficiency, Customer

Experience

A.    Deeper Physical Reach

Your Company has an extensive PAN-India distribution network with 1,370 offices/branches spanning across 27 States and 7 Union Territories as on 31^st March 2024. Due to its extensive office network, your Company is Less dependent on any one region in the Country. AdditionaLLy, some regionaL, cLimatic, and cycLicaL dangers, such as heavy monsoons or droughts, are Lessened by geographic diversification. The vast office network of the Company enabLes each office to organicaLLy buiLd its business and use its cLient connections by providing financiaL products Like vehicLe financing, pre-owned car Loans, SME financing, insurance broking, mutuaL fund distribution, fixed deposits etc. There are guardraiLs defined centraLLy to ensure asset quaLity standards. Your Company beLieves that its efficient office network in ruraL and semi-urban areas has afforded an opportunity to meet the financiaL needs of the peopLe of India by identifying and comprehending their needs and aspirations.

B.    Enhancing Digital Reach

Ever evoLving technoLogy enabLed your Company to extend digitaL footprints across the geographies and customer segments. Your Company's focus on mobiLe technoLogy has made mobiLe app a cruciaL channeL for various aspects of customer service, fostering brand LoyaLty, customer retention, acquire new customers and revenue generation.

The 'MF Customer APP' which is avaiLabLe in 11 Languages (incLuding 9 Indian regionaL Languages), enabLes customers to appLy for vehicLe Loans, access and manage their Loan accounts, create E-mandate, make EMI payments using a variety of payment methods, incLuding debit cards, net banking, UPI and QR code. In the fiscaL year 2024, app users increased by 40%, reaching 8.7 Lakh users, and coLLections from the app doubLed.

To empower empLoyees, customers, and stakehoLders, your Company offers robust digitaL alternatives through a redesigned unified app for customer acquisition, underwriting, and coLLection processes. Embracing the shift from conducting business digitaLLy to becoming digitaLLy Led businesses is now an integraL part of your organizationaL strategy.

C.    Leveraging Technology

Your Company's digitaL initiatives extend across different segments and products, incLuding auto Loans, pre-owned car Loans, Leasing, and SMEs.

Your Company has roLLed out Lead management app which heLp saLes team to quaLify incoming Leads, anaLyse, nurture them and convert into new business opportunities. It aLso creates better experience for potentiaL customers.

The rollout of 'QR code' based offer at dealership heLps deaLers and saLes team of automotive verticaL to pitch right offers from your Company to the customers on an aLmost reLative basis.

The introduction of 'OneApp' has equipped on-field employees with decision-making capabilities through digitaL intervention, enhancing coLLection efficiency and transforming business digitaLLy. The 'Used Car Digi Loans' initiative, in coLLaboration with industry Leading brands, offers customers personaLized Loan offers from your Company, expediting purchasing decisions and improving customer satisfaction.

Your Company prioritizes enhancing core operations by adopting cLoud-based Loan origination systems, utiLizing advanced API pLatforms for scaLabLe transactions. DigitaLisation has streamLined Loan processing whiLe stiLL maintaining strict checks. Leveraging data sciences and artificiaL inteLLigence, your Company utiLises business inteLLigence dashboards and machine Learning modeLs for strategic initiatives in lending, retention, and business expansion.

As part of endeavour to communicate with customers across a variety of digitaL pLatforms, your Company has set up an end-to-end hyper personaLised marketing tech pLatform.

Your Company has started several digital interventions spanning across a! employee categories (fieLd force, support staff, office, remote staff, work from home empLoyees), across aLL geographic regions, as a part of ongoing effort to improve empLoyee experience.

In terms of risk management, your Company aLigns processes with ISO 27001:2013 and COSO framework to minimize risks. Your Company reguLarLy assesses risk, which invoLves impLementing new technoLogy, keeping track of it and having externaL/internaL speciaLists audit the same. By impLementing manuaL and automated technoLogies, the risks discovered during the assessment are suitabLy managed by mitigating, minimising, or transferring the risks. In accordance with the government's pLanned data privacy initiatives, the Company is adopting data privacy practices.

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Your Company's strategic priority is to deliver a sustainable profitable growth characterised by continued growth of 15-20% Assets Under Management and a stable asset quality (Gross Stage-3 assets < 4.5%).

D.    Data as Competitive Advantage

Your Company's 25+ years of rich experience in ruraL and semi-urban markets gives it an edge whiLe using anaLytics and artificiaL inteLLigence. Your Company has introduced its own aLgorithms to provide Low-risk customers with quicker Loan approvaLs at variabLe interest rates, which wiLL aid in growing market share, enhancing portfoLio quaLity and boosting profitabiLity. The integrated activation of DigitaL, AnaLytics and TechnoLogy wiLL significantLy improve customer acquisition, retention, cross-seLLing and coLLections. Through the strategic utiLization of data and artificiaL inteLLigence, your Company is eLevating the reaLm of customer experience, crafting bespoke financiaL soLutions and offers taiLored to the individuaL needs of our customers, thereby fostering growth and enhancing LiveLihoods. Your Company's steadfast commitment to driving operationaL exceLLence is exempLified through the automation of underwriting decisions using machine learning, a move that is heLping the Company both augment productivity as weLL as fortify profitabiLity. By Leveraging advanced data science, your Company has buiLt capabiLity to proactiveLy identify and mitigate risks within the portfoLio, ensuring resiLience in the face of evoLving market dynamics. Your Company's dedication to innovation is underscored by substantial investments in Data and AI technoLogies, propeLLing our franchise towards future readiness and cementing our status as a formidabLe force within the competitive Landscape.

E.    Growth Drivers for Future

The Company's vision is to be "A leading and responsible financial solutions partner of choice for emerging India."

Our vision signifies our commitment to service our customers in emerging India in a responsible manner and simuLtaneousLy achieve profitabLe growth. It further estabLishes our commitment to be a provider of comprehensive financiaL soLutions, beyond Lending. The phrase "partner of choice" hoLds significance as it reflects our dedication to prioritising digitaL initiatives, enhancing customer experience and expanding our range of products.

The strategic priority is to deLiver a sustainabLe profitabLe growth characterised by continued growth of 15-20% in Assets Under Management ("AUM") and a stable asset quality (Gross Stage-3 assets < 4.5%).

Your Company is concentrating on developing its core products and expanding into new growth areas. Financing of Pre-owned cars, used tractors and commerciaL vehicLes have a Lot of head room to grow within the vehicLe segments whiLe increasing market share for its existing range of products.

With an aim to provide comprehensive range of financiaL soLutions under one roof, your Company has entered into strategic tie-ups during the year under review viz. co-Lending arrangement with State Bank of India and Lendingkart and partnership agreement with Bank of Baroda for co-sourcing of car Loan Leads. These arrangements provide wider outreach, better interest rates and credit to the unserved segments of the society. Your Company wiLL keep on further refining its risk poLicy norms and underwriting to ensure that asset quaLity continues to stay top-cLass.

Other Developments

•    Buy out of stake in Mahindra Insurance Brokers Limited

Mahindra Insurance Brokers Limited ("MIBL"), subsidiary of the Company, is engaged in the business of direct and reinsurance broking.

Pursuant to the approvaL received from Insurance ReguLatory and DeveLopment Authority of India ("IRDAI"), your Company has acquired 20,61,856 equity shares of ' 10 each of MIBL (20% stake), at an aggregate price of ' 206.39 crore. Consequent to this MIBL became a whoLLy owned subsidiary of the Company with effect from 22^nd September 2023.

•    Corporate Insurance Agency

Your Company proposes to carry on the supplemental business activity of soLiciting/ procuring insurance business by becoming a Corporate Agent and providing speciaLized insurance soLutions in the areas of Life insurance, heaLth insurance and generaL insurance-both group and individuaL (Corporate Agent-Composite) in the geographies that the Company operates in, subject to approvaL of IRDAI.

The sharehoLders of the Company vide speciaL resoLution passed through postaL baLLot on 19^th January 2024 approved amendment to the Memorandum of Association ("MOA") of the Company to enabLe the Company to carry on insurance business inter-aLia as a Corporate Agent and undertake aLL incidentaL activities.

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Your Company proposes to carry on the supplemental business activity of soliciting/ procuring insurance business by becoming a Corporate Agent and providing specialized insurance solutions in the areas of life insurance, health insurance and general insurance-both group and individual.

The corporate agency License wouLd heLp in broadening your Company's product portfoLio by incorporating insurance solutions. It would help customers with their financiaL and insurance needs being met by a singLe entity. The process wouLd augment the Company's existing sources of revenue and profits as it depLoys its common infrastructure of branch network and feet on street. As on the date of the report, your Company has made an appLication to IRDAI, seeking approvaL for registering itseLf as Corporate Agent.

Strategic Tie-ups / Partnerships

Co-lending partnership with State Bank of India

Your Company entered into strategic co-lending partnership with State Bank of India ("SBI"), India's pioneer bank. This coLLaboration is a step forward in enhancing financiaL accessibiLity and incLusivity.

Company's strong ruraL distribution network and expertise in the financiaL sector and SBI's competitive capitaL cost, provides customers with a competitive advantage and joint financiaL support thereby enabLing credit to the unserved segments of the economy at an affordabLe cost. Under the said partnership, your Company faciLitates Leads and manages Loan servicing whiLe serving as a singLe point of contact for prospective customers.

Co-lending partnership with Lendingkart

Your Company has entered into Co-lending partnership with Lendingkart, a pioneer in financiaL services. This colending partnership provides business loans to the SmaLL & Medium Enterprise ("SME") sector, thereby fostering financiaL incLusion for smaLL and medium enterprises and enabLing diversification of Company's product portfoLio.

Co-sourcing partnership with Bank of Baroda

Your Company has entered into partnership agreement for co-sourcing of car Loan Leads. Under this tie-up, your Company generates new and pre-owned car Loan Leads for Bank of Baroda through its widespread fieLd and branch distribution channeLs, compLemented by Bank of Baroda's wide network across the country for Loan processing. The said arrangement aims at providing comprehensive range of financiaL soLutions under one roof and enabLing credit access to a wide spectrum of customers across Locations.

Change in Nature of Business

There has been no change in the nature of business and operations of the Company during the year under review.

RBI Compliances

Reserve Bank of India ("RBI") has notified ScaLe Based regulations ("SBR") on 22^nd October 2021. Your Company has been categorised as an NBFC-Upper Layer vide press reLease dated 30^th September 2022, issued by RBI. Your Company has aLways endeavored to maintain the highest standards of compLiance within the organisation and shaLL

The Company had outstanding borrowings (excLuding securitisation and TREPS) of ' 85,097.72 crore as on 31^st March 2024, breakup of which is given as under:

 

Particulars	Fixed Deposits	Bank Loans (TL/ OD/CC/ WCDL)	NonConvertible Securities (Privately placed & Public NCD)	Subordinate Debt (Privately placed & Public NCD)	Commercial Paper	ICD	External Commercial Borrowings	Total
Amount in crore (?)	7,174.74	44,859.83	21,843.82	4,005.66	4,882.12	229.50	2,102.05	85,097.72
% to outstanding borrowings (excLuding securitisation and TREPS)	8.43	52.72	25.67	4.71	5.74	0.27	2.46	100.00

Figures are as per reported Ina as financiaL statements.

 

continue to do so going ahead. The Company continues to comply with aLL the appLicabLe Laws, regulations, guidelines etc. prescribed by the RBI, from time to time incLuding the norms pertaining to capital adequacy, non-performing assets etc. Your Company's asset LiabiLity management is reviewed on quarterly basis by a focused Board level committee viz. Asset LiabiLity Committee. Your Company's liquidity coverage ratio ("LCR") was 313% as on 31^st March 2024 against the mandatory requirement of 85%.

Your Company has adopted aLL the mandatory appLicabLe poLicies under SBR Like Large Exposure PoLicy, InternaL CapitaL Adequacy Assessment PoLicy (ICAAP), CompLiance PoLicy etc.

Compliance Risk Assessment Framework and Compliance Testing program (“CRAFT”)

Your Company has put in pLace CompLiance Risk Assessment Framework and CompLiance Testing program in compLiance with RBI circuLar dated 11^th April 2022.

Business Continuity Policy

In order to have robust framework & process for Business continuity, your Company has implemented Business Continuity PoLicy ("BCP") which inter-aLia incLudes identification, monitoring, reporting, responding and managing the risks incLuding mitigating risks of a significant / proLonged business disruption in order to protect the interests of the Company's customers, empLoyees and stakehoLders.

Your Company continues to invest in taLent, systems and processes to further strengthen the controL, compLiance, risk management and governance standards in the organisation.

Internal Ombudsman

Your Company has appointed an InternaL Ombudsman ("IO") in compLiance with the RBI CircuLar dated 15^th November 2021. A Report of number of compLaints escaLated to IO and status of disposaL of such compLaints during the period under review is being pLaced before the Board for its review in compLiance with the said RBI circuLar.

Finance

During the year under review, Reserve Bank of India ("RBI") focused on withdrawaL of accommodation to ensure that inflation progressively aLigns with the target, whiLe supporting growth. AccordingLy RBI has maintained the REPO Rate at 6.50% during FY2024. Liquidity conditions remained tight throughout the year with the banking sector Liquidity remaining LargeLy negative during the FY2024.

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Your Company has been categorised as an NBFC-Upper Layer and continues to comply with all the applicable Laws, regulations, guidelines etc. prescribed by the RBI.

Inflation in India has remained beLow 6% (RBI upper toLerance Limit) throughout the year. Consumer Price Index ("CPI") inflation was 4.85% in March 2024. GLobaLLy, inflation showed a downward trajectory and seems to be moderating paving the way for a growth revivaL. However, this comes with a caution as successive shocks Like the Russian-Ukraine war, IsraeL-Hamas-Iran conflict, gLobaL uncertainty are stiLL weighing on the economy and macro financiaL stabiLity incLuding financiaL sector stress. The rupee has remained stabLe against the US doLLar throughout the year in the range of ' 82/$ to ' 83/$.

The 2 Year and 10 Year G Sec curve have remained around 7.05% and 7.15% respectiveLy throughout the financiaL year. During the year Interest cost on borrowed funds remained eLevated for the Company i.e., 7.69% (interest cost to average borrowing).

During the year under review, your Company continued with its diverse methods of sourcing funds incLuding borrowing through Secured and Unsecured Debentures, Term Loans, ExternaL CommerciaL Borrowings, Securitisation, Fixed Deposits, CommerciaL Papers, Inter Corporate Deposit etc. and maintained prudentiaL Asset LiabiLity match throughout the year. Your Company sourced Long-term debentures and Loans from banks and other institutions at attractive rates. Your Company continues to expand its borrowing profiLe by tapping new Lenders and geographies.

Securitisation

During the year, your Company successfuLLy compLeted three securitisation transactions aggregating to ' 2,929 crore.

Non-Convertible Debentures

During the year under review, your Company raised an aggregate of ' 6,572.86 Crore (' 8650 Crore being the face vaLue) through issuance of Non-ConvertibLe debentures on private pLacement basis as mentioned hereunder:

1.    ' 5,865.14 crore, raised though issuance of Secured RedeemabLe Non-ConvertibLe Debentures ("NCDs").

2.    ' 705.62 crore raised through issuance of Unsecured RedeemabLe Non-ConvertibLe Subordinated Debentures eLigibLe for Tier II CapitaL.

3.    ' 2.1 crore raised through issuance of PartLy paid-up NCDs.

As specified in the respective offer documents, the funds raised from issuance of NCDs were utiLised for various financing activities, onward Lending, repaying the existing indebtedness, working capitaL and for generaL corporate purposes of the Company. DetaiLs of the end-use of funds were furnished to the Audit Committee on a quarterLy basis. The NCDs are Listed on the debt market segment of BSE Limited.

During the year, your Company has redeemed NCDs worth ' 3,969.70 crore and subordinated debt worth ' 127.80 crore on private pLacement basis.

Your Company is in compLiance with the appLicabLe guideLines issued by the RBI and Securities and Exchange Board of India in this regard.

There has been no defauLt in making payments of principaL and interest on aLL the NCDs issued by the Company on a private pLacement basis and through pubLic issue. Further, there was no deviation/variation in use of proceeds raised from the objects stated in the offer document. As on 31^st March 2024, there was no unpaid/uncLaimed interest on NCDs issued on a private pLacement basis. With respect to the three pubLic issuances of NCDs made by the Company, aggregate PrincipaL payment of ' 10,93,000/-and Interest of ' 31,02,515/- was uncLaimed by the investors as on 31^st March 2024.

Credit Rating

Your Company enjoys highest rating for its Long term and short term borrowing programmes from aLL the credit rating agencies that it works with. Your Company has been rated by CRISIL Ratings Limited ("CRISIL") & India Ratings and Research Private Limited ("India Ratings") for its NonConvertibLe Debentures program, CommerciaL Paper, Banking FaciLities & Fixed Deposits. Further, CARE Ratings Limited ("CARE") and Brickwork Ratings India Pvt. Ltd. ("BWR") has rated your Company for the Non-ConvertibLe Debentures program. These rating agencies have reaffirmed the highest credit rating for your Company's short term & Long term borrowing instruments. Your Company beLieves that its credit ratings and strong brand equity enabLes it to borrow funds at competitive rates. The detaiLs of ratings are given in the Corporate Governance Report, forming part of this AnnuaL Report.

Capital Adequacy

As on 31^st March 2024, the CapitaL to Risk Assets Ratio ("CRAR") of your Company was 18.86% which is weLL above the minimum requirement of 15% CRAR prescribed by the Reserve Bank of India.

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Your Company enjoys highest rating for its long-term and short-term borrowing programmes from all the credit rating agencies that it works with.

Commercial Paper

As at 31^st March 2024, the Company had CommerciaL Paper ("CPs") with an outstanding amount (face vaLue) of ' 4,975 crore. CPs constituted approximateLy 5.4% of the outstanding borrowings as at 31^st March 2024. The CPs of the Company are Listed on the debt market segment of the NationaL Stock Exchange of India Limited.

Borrowings

In order to expand the business of the Company and to cater the enhanced budgeted disbursements, the Board of Directors of the Company have subject to the approvaL of the sharehoLders of the Company, approved increase in the overaLL borrowing Limit from ' 1,10,000 crore to ' 1,30,000 crore.

Out of the above, Tier I capitaL adequacy ratio stood at 16.39% and Tier II capitaL adequacy ratio stood at 2.47% respectiveLy.

Share Capital

The issued, subscribed and paid-up Equity Share CapitaL as on 31^st March 2024 was ' 247.1 crore, consisting of 123,55,29,920 Equity Shares of the face vaLue of ' 2 each, fuLLy paid-up.

There was no change in the issued, subscribed and paid-up share capitaL during the year under review.

As on 31^st March 2024, none of the Directors of the Company hoLd instruments convertibLe into equity shares of the Company. DetaiLs of RSUs granted to Executive Directors are given the Corporate Governance Report forming part of this AnnuaL Report.

Economy

Global Economy

FinanciaL year 2024 witnessed demand regardLess of tightening financiaL conditions, simmering geo-poLiticaL risks and adverse weather patterns. For instance, the US FederaL Reserve increased poLicy rates to the highest LeveL in over two decades, but eLevated government spending supported tight Labour market conditions and hence robust retaiL demand. Hot wars near the BLack Sea, the Red Sea and the Gaza strip pushed up trading costs, however this came against a backdrop of Low

input cost pressures brought about by improving supply chain conditions and expectations of weak gLobaL growth. FinaLLy EL Nino conditions Led to deficient rains hampering agricultural output. In this midst, aggressive output curbs announced by Organization of the PetroLeum Exporting Countries (OPEC) pushed up crude oil prices close to USD 100/bbL during the year; fortunately, higher supply from America brought temporary respite to fueL costs. As a result of countervailing factors, demand momentum and consumer sentiment were stronger than expected resuLting in centraL banks tightening financing conditions even further and pushing poLicy rate cut expectations deeper into financial year 2025.

Domestic Economy

In India, El Nino conditions disrupted agricultural output, however, lower input costs and higher construction activity supported ruraL income growth. The main growth push came from rising services' exports, Leveraged consumption by wealthier households and public sector infrastructure spending. This has resulted in over 8% growth in the Last three quarters of caLendar year 2023. FuLL financial year 2024 growth is at 7.2%. Apart from improving consumer sentiment, the economy is benefiting from revivaL in corporate sector project announcements which augurs weLL for job generation and near 7% growth in financiaL year 2025. The RBI has kept poLicy rates on hoLd after raising them by 250 bps in the current cycLe, instead the regulator engaged in macro-prudential tightening by raising risk weights for unsecured personaL Loans and bank Lending to NBFCs. WhiLe the RBI presentLy maintains its stance of withdrawing accommodation, space to cut poLicy rates by 50 bps to 6% in financiaL year 2025 couLd emerge if headLine inflation eases towards 4% on good monsoons.

Management Discussion and Analysis

In accordance with the appLicabLe provisions of the Master Direction issued by the Reserve Bank of India and the SEBI (Listing Obligations and Disclosure Requirements) ReguLations, 2015, a detaiLed anaLysis of the Company's performance is discussed in the Management Discussion and AnaLysis Report, which forms part of this AnnuaL Report.

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Your Company voluntarily observes a 'Silent / Quiet period' starting from 1^st day of the start of the month after the end of the quarter for which the financial results are to be announced till the time of announcement of said results. During this period, no meetings with investors/ analysts/funds are held to discuss unpublished financial performance of the Company to ensure protection of the Company's UPSI.

Corporate Governance

Your Company practices a culture that is built on core values and ethical governance practices. Your Company is committed to integrity and transparency in all its dealings and places high emphasis on business ethics. The Board of your Company exercises its fiduciary responsibiLities in the widest sense of term and endeavours to enhance Long-term sharehoLder vaLue. The Governance framework is anchored by the cLearLy defined poLicies and procedures covering areas such anti-bribery and anticorruption, Prevention of SexuaL Harassment at WorkpLace and Whistle Blower Policy. Company's disclosure regime is aimed at achieving best practices, globally.

A Report on Corporate Governance aLong with a Certificate from M/s. Makarand M. Joshi & Co., SecretariaL Auditors, certifying compLiance with the conditions of Corporate Governance forms part of this AnnuaL Report.

Ethics Framework

The Ethics & Governance framework is anchored by cLearLy defined poLicies and procedures, covering areas such as Anti-Bribery and Anti-Corruption Policy ("ABAC"), PoLicy on Gifts & Entertainment ("G&E"), PoLicy on Prevention of SexuaL Harassment at WorkpLace ("POSH"), Whistle-Blower Policy ("WB") to ensure robust Corporate Governance.

The Code of Conduct and aLL the Company's poLicies are accessibLe on the Company's website; in the Governance section at the web-Link: https://www.mahindrafinance. co m/investor-re lations/poli cy-and-shareh old er-infnrmatinn#mmfsl-pnlirie.s

During the year, ABAC, POSH and WB policies were revised to aLign for ease of comprehension and to aLign with internal and external environment. It enables the Company to make the right choices and demonstrate the highest standards of integrity and ethicaL behaviour.

The Code of Conduct Committee and the Audit Committee ensures that the Ethics & Governance framework is executed effectiveLy and the decisions on substantiated cases are taken in a fair, just and consistent manner across business.

Investor Relations

During the current year, your Company has met multiple investors and analysts-both domestic and international. These sessions were undertaken through a mix of one-on-one or group meetings. Your Company also participated in muLtipLe domestic conferences organised by reputed broking houses, in addition to accessing overseas investors through Non-Deal Roadshows ("NDRs"). Having meetings in virtuaL format (through conference caLLs and video conferencing) enabLed accessing a Larger investor base.

Your Company holds quarterly and annual earnings calls through structured conference caLLs and/or webLinks, detaiLs of which are made avaiLabLe to pubLic through the Company's website and stock exchange(s).

During these meetings/ earnings calls, the interactions are based on generaLLy avaiLabLe information accessibLe to the public in a non-discriminatory manner. No unpublishec price-sensitive information is shared during such meetings Your Company believes in transparent communication and have been voLuntariLy discLosing criticaL information regarding Company's performance through monthLy updates.

Silent period

As a good governance practice, your Company voluntarily observes a 'SiLent / Quiet period' starting from 1^st day of the start of the month after the end of the quarter for which the financiaL resuLts are to be announced tiLL the time of announcement of said resuLts. During this period no meetings with investors/anaLysts/funds are heLd tc discuss unpubLished financiaL performance of the Company to ensure protection of the Company's UnpubLished Price Sensitive Information ("UPSI").

Consolidated Financial Statements

The ConsoLidated FinanciaL Statements of your Company its subsidiaries, associate/joint venture for FY2024 prepared in accordance with the reLevant provisions of the Companies Act, 2013 ("the Act") and appLicabLe Indian Accounting Standards along with all relevant documents and the Auditors' Report form part of this AnnuaL Report

Pursuant to the provisions of Section 136 of the Act, the StandaLone and ConsoLidated FinanciaL Statements of the Company, aLong with reLevant documents and financiaL statement of each of the subsidiaries of the Company are avaiLabLe on the website of the Company and can be accessed at the web-Link: https://wwwmahindrafinance c.nm/inve.stnr-relatinn.s/financ.ial-infnrmatinn#financ.ial-results

Subsidiaries, Joint Venture(s) and Associate(s)

A report on the performance and financiaL position of each of the Company's subsidiaries, associate/ joint venture is included in the Consolidated Financial Statements and the saLient features of their financiaL statements and their contribution to overaLL performance of the Company as required under Section 129(3) of the Companies Act 2013 ("the Act") read with RuLe 8(1) of The Companies (Accounts) RuLes, 2014, is provided in Form AOC-1 annexed as ‘Annexure A' to the Consolidated Financial Statements and forms part of this AnnuaL Report.

Material Subsidiary

ReguLation 16 of the SEBI (Listing ObLigations anc DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations") defines a "materiaL subsidiary" to mean a subsidiary, whose income or net worth exceeds ten percent of the consoLidated income or net worth respectiveLy, of the Listed entity and its subsidiaries in the immediately preceding accounting year.

Accordingly, Mahindra Rural Housing Finance Limited was a materiaL, debt Listed subsidiary, of your Company for the financiaL year ended 31^st March 2024.

Operational and performance highlights of the Company's Subsidiary/Joint venture Companies for FY2024 are given hereunder:

Mahindra Rural Housing Finance Limited

Mahindra Rural Housing Finance Limited ("MRHFL"), the Company's subsidiary, engaged in the business of providing Loans for purchase, renovation and construction of houses to individuaLs in the Low and middLe income category of the country, registered a totaL income of ' 1,294.44 crore as compared to ' 1,349.80 crore for the previous year, decLine of 4.10% over previous financiaL year. Profit Before Tax was 81.59% Lower at ' 4.84 crore as compared to ' 26.29 crore for the previous year. Profit After Tax was 83.45% Lower at ' 3.60 crore as compared to ' 21.75 crore in the previous year.

During the year under review, MRHFL disbursed loans aggregating to ' 2,071 crore serving more than 28,000 households as against ' 1,969 crore in the previous year. MRHFL is expanding its footprint in affordabLe housing.

Mahindra Insurance Brokers Limited

Mahindra Insurance Brokers Limited ("MIBL"), whoLLy owned subsidiary of the Company (effective 22^nd September 2023) is engaged in the business of Direct and Reinsurance Broking.

During the year under review, there was growth of 13% in Gross Premium faciLitated for the Corporate and RetaiL business Lines, increasing from ' 4,036.80 crore in FY2023 to ' 4,555.86 crore in FY2024. The TotaL Income increased by 157% from ' 426.51 crore in FY2023 to ' 1,094.95 crore in the FY2024. The Profit Before Tax increased by 264% from ' 46.05 crore to ' 167.50 crore and the Profit After Tax increased by 259% from ' 34.44 crore to ' 123.52 crore during the same period.

Mahindra Manulife Investment Management Private Limited

Mahindra ManuLife Investment Management Private Limited ("MMIMPL") acts as an Investment Manager for the schemes of Mahindra ManuLife MutuaL Fund ("MutuaL Fund"). As on 31^st March 2024, MMIMPL was acting as the investment manager to 22 schemes of the MutuaL Fund. The average Assets Under Management in these 22 schemes were ' 19,659 crore as on 31^st March 2024 as compared to ' 9,691 crore as on 31^st March 2023, deLivering a growth of 103% in assets. Of these assets, ' 17,613 crore were in equity and hybrid schemes in March 2024, as compared to ' 8,294 crore in March 2023, a growth of 112%. MMIMPL has empaneLed 28,406 distributors and now has 9,12,891 investor accounts in these 22 schemes.

During the year under review, the totaL income of MMIMPL was ' 63.54 crore as compared to ' 44.12 crore for the previous year. The operations for the year under consideration have resuLted in a Loss of ' 27.27 crore as against a Loss of ' 30.86 crore during the previous year.

Mahindra Manulife Trustee Private Limited

Mahindra ManuLife Trustee Private Limited ("MMTPL") acts as the Trustee to Mahindra ManuLife MutuaL Fund ("MutuaL Fund").

During the year, MMTPL earned trusteeship fees of ' 107.03 Lakhs and other income of ' 10.29 Lakhs as compared to ' 73.76 lakhs and ' 7.28 lakhs, respectively, for the previous year. MMTPL recorded a profit of ' 59.72 lakhs for the year under review as compared to profit of ' 16.06 lakhs in the previous year.

Mahindra Ideal Finance Limited (Sri Lanka)

Your Company holds a 58.2% stake in Mahindra Ideal Finance Limited (Sri Lanka) {"MIFL"} with a total investment of ' 77.97 crore. Leveraging Mahindra Finance's expertise of over 28 years in the financiaL services sector and the LocaL management's expertise of the domestic market. MIFL is poised to buiLd a Leading financiaL services business in Sri Lanka.

With improving economic and business environment in Sri Lanka, MIFL witnessed significant rebound in its business. MIFL restarted its vehicle leasing disbursements albeit with caution, strict credit standards, and asset safeguards in pLace. GoLd Loan disbursements aLso surged during H2 FY2024. Year-round coLLection efficiency was above 100%. By 31^st March 2024, Company's GS-3 LeveL dropped to 5.25%, which is industry leading in the context of the Sri Lankan market.

MIFL's totaL income for the FY2024 was SriLankan rupee ("LKR") 2,309 miLLion vs. LKR 1,924 miLLion for FY2023. Profit Before Tax was 35% higher at LKR 334 miLLion as compared to LKR 248 miLLion for the previous year. Profit After Tax was 19% higher at LKR 103 miLLion as compared to LKR 87 miLLion in the previous year. MIFL continued investments in order to grow its business and enhance the customer experience and reach. During the course of the financiaL year, MIFL's branch network across the island country grew to 32 branches.

Mahindra Finance CSR Foundation

Mahindra Finance CSR Foundation was incorporated on 2^nd ApriL 2019 as a whoLLy owned subsidiary of the Company registered under Section 8 of the Act, to promote and support CSR projects and activities of the Company and its group Companies.

The foundation has obtained Registration under Section 12AA and Section 80G of the Income Tax Act, 1961 and CSR Registration Number.

Joint Venture/Associate

Mahindra Finance USA LLC [“MFUSA"]

MFUSA's retaiL and deaLer disbursement registered an increase of 4.40% to USD 917.58 miLLion for the year ended 31^st March 2024 as compared to USD 877.18 miLLion for the previous year.

TotaL Income increased by 25.54% to USD 77.84 miLLion for the year ended 31^st March 2024 as compared to USD 62.01 miLLion for the previous year. Profit before tax was 15.49% higher at USD 22.86 miLLion as compared to USD 19.80 miLLion for the previous year. Profit after tax increased by 14.64% to USD 17.21 miLLion as compared to USD 15.01 miLLion in the previous year.

Changes in Subsidiaries, Joint Venture or Associate Companies during the year

During the year under review, your Company acquired 20% stake in Mahindra Insurance Brokers Limited ("MIBL"), heLd by IncLusion Resources Private Limited for an aggregate consideration of ' 206.39 crore, consequent to which it became a whoLLy owned subsidiary of the Company with effect from 22^nd September 2023.

Except as mentioned above, there were no changes in the Company's Subsidiaries, Joint Venture/Associate Companies.

Fixed Deposits and Loans/Advances

Your Company offers a wide range of Fixed Deposit schemes that cater to the investment needs of various cLasses of investors. These Deposits carry attractive interest rates with superior service enabLed by robust processes and technoLogy. In order to tap ruraL and semiurban savings, your Company continues to expand its network and make its presence feLt in the most remote areas of the country.

During the year, CRISIL has reaffirmed a rating of 'CRISIL AAA/StabLe' for your Company's Fixed Deposits. AdditionaLLy, Company's Fixed Deposit program aLso has AAA rating from India Ratings. This rating indicates that the degree of safety regarding timeLy payment of interest and principal is very strong. Your Company's Deposits continue to be a preferred investment avenue amongst the investors.

As on 31^st March 2024, your Company has mobiLised funds from Fixed Deposits to the tune of ' 7,197.20 crore, with an investor base of over 95,979 investors.

Your Company continues to serve the investors by introducing severaL customer centric measures on an ongoing basis to further strengthen its processes in sync with the requirements of the Fixed Deposit ("FD") hoLders. Your Company periodicaLLy sends various intimations via SMS, e-maiLs, post, courier etc., to its investors as weLL as sends reminder emaiLs to cLients whose TDS is LikeLy to be deducted before any pay-out/accruaL. Your Company aLso provides a digitaL pLatform for onLine appLication/ renewaL of deposits, onLine generation of TDS certificates from customer/ broker portaL and seamLess investment process for its empLoyees.

Your Company has roLLed out severaL initiatives aimed at offering a superior experience to fixed deposit hoLders. Some key ones incLude:

•    An integrated web portal has been developed to faciLitate onLine appLication/ onLine renewaL of Fixed Deposits, Loan against FDs, profiLe updates etc. which can be accessed at https://wwwmahindrafinance. com/investment/fixed-deposit

•    OnLine submission of Forms 15G/15H by aLL eLigibLe Depositors through the FD Customer portal is made available on the Company's website.

•    TDS certificate(s) are made avaiLabLe on the

Customer portaL and Broker portaL, in addition to the same being sent to the concerned Depositors, from time to time.

•    In order to offer various payment options to Depositors, more payment gateways have been added across various FD investment portals.

•    An advanced version of Customer ReLationship Management ("CRM") has been launched to record the queries, requests and compLaints for future data anaLysis in order to enhance customer service. An integrated service portaL (E-Sarathi) has been introduced to address the queries of Depositors routed through the ChanneL Partners on reaL-time basis during working hours.

•    The process of recording of CentraL Know Your Customer ("CKYC") detaiLs of the Depositors has been strengthened by introducing various controL measures.

•    Separate categorisation of VIP customers to address the queries with a dedicated ReLationship Manager is introduced.

•    AdditionaL 448 Branches have been enroLLed for accepting and servicing FD hoLders.

•    An automated customer service feedback process has been introduced to have better understanding of the customer expectations.

•    Communication channeLs for transactionaL and non-transactionaL activities reLated to fixed Deposits have been strengthened to ensure deposit hoLder is informed and updated on reaL time basis.

There has been no defauLt in repayment of deposits or payment of interest during the year.

Your Company being a Non-Banking FinanciaL Company the discLosures required as per RuLe 8(5)(v) and (vi) of the Companies (Accounts) RuLes, 2014 read with Sections 73 and 74 of the Companies Act, 2013, are not appLicabLe to the Company.

The information pursuant to CLause 35(1) of Master Direction    DNBR.PD.002/03.10.119/2016-17    dated

25^th August 2016 issued by the Reserve Bank of India on Non-Banking FinanciaL Companies Acceptance of PubLic Deposits (Reserve Bank) Directions, 2016 ("NBFC ReguLations"), regarding unpaid/uncLaimed pubLic deposits as on 31^st March 2024, is furnished beLow:

i.    TotaL number of accounts of PubLic Deposits of the Company which have not been cLaimed by the depositors after the date on which the deposit became due for repayment: 4,217.

ii.    TotaL amounts due under such accounts remaining uncLaimed beyond the dates referred to in cLause (i) as aforesaid: ' 4.36 crore.

Initiatives taken to reduce the unclaimed amounts pertaining to Fixed Deposits:

i) Penny drop testing one month prior to maturity and interest pay out process is being conducted to reduce rejection cases.

ii)    Deposit hoLders are being reached out via SMS/ CaLLs/ EmaiL/PhysicaL Letters, as appLicabLe incLuding sending communication in vernacuLar Language for quick understanding by the customers.

iii)    In case of death of depositors, cLaim settLement process is advised to joint depositors/nominee/ LegaL heir, as the case may be.

iv)    UncLaimed FDs are being vaLidated with the depositor's Loan account with the Company, if any.

v)    In case the cheque is undeLivered, the Company deposits the amount in the bank account of the customer, after necessary confirmations.

Transfer of Unclaimed amounts pertaining to Fixed Deposits to IEPF:

Pursuant to Section 125 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) RuLes, 2016 ("the IEPF RuLes") as amended from time to time, matured deposits remaining uncLaimed for a period of seven years from the date they became due for payment are required to be transferred to the Investor Education and Protection Fund ("IEPF") estabLished by the CentraL Government. Further, interest accrued on the deposits which remain uncLaimed for a period of seven years from the date of payment are aLso required to be transferred to the IEPF under Section 125(2)(k).

During the year, the Company has transferred to the IEPF an amount of ' 0.16 crore being the uncLaimed amount of matured fixed deposits and ' 0.05 crore towards uncLaimed/ unpaid interest accrued on the deposits. The concerned depositor can cLaim the deposit and/or interest from the IEPF by foLLowing the procedure Laid down in the IEPF RuLes.

Loans and Advances

During the year under review, the Company has not given any Loans and advances in the nature of Loans to its subsidiaries or associate or to firms/companies in which Directors are interested.

AccordingLy, the discLosure of particuLars of Loans/ advances, etc., as required to be furnished in the AnnuaL Accounts of the Company pursuant to ReguLation 34[3] and 53[f] read with paragraph A of ScheduLe V of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 is not appLicabLe to the Company.

Particulars of Loans, Guarantees or Investments in Securities

Your Company, being an NBFC registered with RBI and engaged in the business of giving Loans in ordinary course of its business, is exempt from compLying with the provisions of Section 186 of the Companies Act, 2013 ("the Act") with respect to Loans.

Pursuant to the provisions of Section 186(4) of the Act, detaiLs with regard to the investments made by the Company, as appLicabLe, are given in Note no. 52 (iv) of the StandaLone financiaL statements, forming part of this AnnuaL Report.

Achievements

Awards/Recognitions received by your Company during the year are enumerated hereunder:

Business

•    Awarded the CRIF Data Excellence Award in the Commercial (NBFC) category.

CSR

•    Received speciaL commendation for CSR FLagship Program 'Swabhimaan' at The CSR Journal Excellence Awards 2023 under the category of 'Education & SkiLL Training'.

•    Honoured with the Rotary CSR Award for 'Distinguished Service in Community Development' for Company's CSR initiative 'Swabhimaan'.

•    Won the award for Best FinanciaL IncLusion Initiative for Company's FinanciaL & DigitaL Literacy CSR Initiative at the DNA Awards 2023 presented during Banking Frontiers NBFC's Tomorrow Conclave.

Sustainability

•    GLobaLLy ranked 45^th by Futures Cape amongst top 100 Indian companies for SustainabiLity & CSR under Responsible Business 2020 by Futures Cape.

•    IncLuded in Dow Jones SustainabiLity Index (DJSI) -OnLy Company in India in Diversified and FinanciaL sector to be incLuded in the DJSI SustainabiLity Yearbook 2021 and having a score of 50 percentiLe in previous year.

•    Became the first Indian Company in the "Banks, Diverse FinanciaLs, and Insurance" sector to have science-based targets vaLidated by the Science based target initiative ("SBTi").

Human Resources

•    Recognised as one of 'India's 100 Best Companies to Work For' by Great PLace To Work India.

•    Recognised as India's Best WorkpLace for MiLLenniaLs by Great PLace To Work India-2024.

•    Awarded IAC 2024 Award for 'Pioneering Work in

ScuLpting TaLent for Tomorrow' in Private Sector at the Industry Academia Conference-2024.

•    Recognised as 'Best NBFC in TaLent & Workforce' by Business Today.

Marketing

•    Won the 'Best DigitaL Initiatives' award at ASSOCHAM 18^th AnnuaL Summit & Awards on Banking & FinanciaL Sector Lending Companies.

•    Won the 'Best Product/Service Innovation' award at ASSOCHAM 18^th AnnuaL Summit & Awards on Banking & FinanciaL Sector Lending Companies.

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Your Company became the first Indiar Company in the "Barks, Diverse FinanciaLs and Insurance" sector to have science-based targets vaLidated by the SBTi.

Employee Stock Option Scheme - 2010 and Restricted Stock Unit Plan - 2023

With a view to continue the practice of rewarding performance of the empLoyees, creating ownership cuLture and to retain, motivate and attract taLent in Light of growing business and to aLign interests of sharehoLders with that of empLoyees, with the approvaL of Members at AnnuaL GeneraL Meeting ("AGM") heLd on 28^th JuLy 2023, your Company has formuLated a Restricted Stock Unit PLan nameLy 'Mahindra and Mahindra FinanciaL Services Limited-Restricted Stock Unit PLan 2023' ("MMFSL RSU PLan-2023"), contempLating grant of59,44,320 Restricted Stock Units ("RSUs") exercisabLe into equivaLent equity shares, constituting 0.48% of the paid-up share capitaL of the Company as on 31^st March 2024.

During the year under review, your Company granted 2,83,171 Restricted Stock Units (RSU's) to the eLigibLe empLoyees under MMFSL- RSU PLan 2023. No options were granted to the eLigibLe empLoyees under the Mahindra & Mahindra FinanciaL Services Limited EmpLoyees' Stock Option Scheme-2010 ("2010 Scheme").

The Company does not have any scheme to fund its empLoyees to purchase the shares of the Company.

The 2010 Scheme and the MMFSL RSU PLan-2023 of the Company is in compLiance with the Securities and Exchange Board of India (Share Based EmpLoyee Benefits and Sweat Equity) ReguLations, 2021 ("SBEBSE ReguLations") and there were no amendments to the aforesaid Scheme and PLan during FY2024. A Certificate from M/s. Makarand M. Joshi & Co., SecretariaL Auditor of the Company for FY2024, certifying that the Company's above-mentioned Scheme and PLan have been impLemented in accordance with the SBEBSE ReguLations and the resoLution passed by the Members, wouLd be made avaiLabLe for inspection by the Members through eLectronic mode at the AnnuaL GeneraL Meeting ("AGM") scheduLed to be heLd on 23^rd JuLy 2024.

The appLicabLe discLosures as stipuLated under SBEBSE ReguLations for the year ended 31^st March 2024, with regards to the 2010 Scheme, MMFSL RSU PLan 2023 and Company's stock option trust is upLoaded on the Company's website and can be accessed at the web-Link: https://www.mahindrafinance.cnm/investnr-relatinns/ financial-infnrmatinn#annual-repnrts

Sustainability Initiatives

Guided by our parent Company Mahindra Group's motto "Rise for Good" your Company has undertaken meaningfuL initiatives to make sustainabiLity as an integraL part of operations and ethos. SustainabiLity has been a part of organization's phiLosophy since its estabLishment. At Mahindra Finance, sustainabiLity is imbibed in its business phiLosophy and is seen as part of its intrinsic DNA.

Your Company has aLigned its performance with the three piLLars of the Mahindra Group SustainabiLity Framework for Long-term vaLue creation. The aLignment with materiaL topics of the framework aLLows us to remain consistent with

our parent organization's vision and strategy. In Line with our sustainabiLity strategy, we have taken a precautionary approach to avoid negative impacts on the environment.

Your Company's approach and accompLishments on SustainabiLity echoes its mission of transforming peopLe Lives and contributing to peopLe, pLanet and profit.

Your Company and its subsidiaries have been enabLing customers to meet their aspirations through a diversified portfoLio of financiaL product offerings. Mahindra RuraL Housing Finance Limited heLps peopLe buiLd their homes through affordabLe housing finance soLutions. Mahindra Insurance Brokers Limited secures their Life and assets with insurance soLutions and Mahindra ManuLife Investment Management Private Limited offers investment options through its asset management soLutions. Your Company Lays strong emphasis on customer centricity with a customer base spread across different viLLages in India, with majority of them beLonging to the 'Earn and Pay' segment.

Your Company continued to focus on integrating SustainabiLity into its business practices across vaLued stakehoLders through key initiatives. Your Company was recognised for its sustainabiLity initiatives with the accoLades as stated in Achievements section.

Business Responsibility and Sustainability Report

In compLiance with ReguLation 34(2)(f) of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015, as appLicabLe, your Company's Business ResponsibiLity and SustainabiLity Report for the year ended 31^st March 2024, forms part of this AnnuaL Report.

The Board of Directors have adopted a poLicy viz. 'Business ResponsibiLity and SustainabiLity Reporting PoLicy' ("BRSR PoLicy"), which inter-aLia, incorporates sustainabiLity eLements and aLigns the PoLicy with NationaL GuideLines on ResponsibLe Business Conduct ("NGRBC").

Business Responsibility and Sustainability-Training and Initiatives

Keeping in mind our responsibiLity throughout our vaLue chain to ensure sustainabLe practices, we expanded the Business ResponsibiLity and SustainabiLity Reporting ("BRSR") training for our vaLue chain partners, by emphasizing on the best practices and case studies of its 9 principLes based on NGRBC. The participative and coLLaborative approach towards the stakehoLders provides a visibiLity of Environment SociaL and Governance ("ESG") practices across the vaLue chain and enabLes the Company to execute its sustainabiLity strategy.

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Your Company's approach and accompLishments on SustainabiLity echoes its mission of transforming Lives of peopLe and contributing to peopLe, planet and profit.

"Making Sustainability Personal” Initiatives

We at Mahindra finance beLieve in making SustainabiLity PersonaL. In view of this, 100% of our empLoyees were provided training on BRSR and Human Rights issues.

Initiatives Like "Green DiwaLi", "I Am ResponsibLe" activities were impLemented to promote ESG cuLture and sustainabLe consumption practices amongst empLoyees. We beLieve this wiLL enabLe sustainabLe behaviouraL changes & knowLedge deveLopment as a core vaLue of the Company.

Other Key Initiatives

This year your Company took significant initiatives on deveLoping robust road map to address Carbon and Water neutraLity. Your Company made proactive efforts to reduce CO₂ emissions (carbon footprint) through Project "Mahindra HariyaLi" by pLanting 3,97,900+ sapLings throughout the country.

ALso keeping in mind the energy security, your Company has instaLLed energy efficient technoLogy Like 5-star inverter AC's, LED, and BLDC fans to reduce our energy consumption as weLL as reducing carbon footprint.

Given the nature of the business, your Company made a significant step towards adopting digitaL pLatforms which not onLy brings in increased efficiency in our operation but aLso ensures significant reduction in consumption of paper.

As a service sector, the major waste contributor is paper and E waste. Promoting a circuLar economy strategy for its disposaL, your Company Launched a zero waste to LandfiLL project thereby ensuring to send paper waste to paper miLLs for recycLing purpose onLy through authorized vendors and in exchange receiving wheat straw-based copier paper for further consumption. This initiative ensures reduction in our dependabiLity of virgin resources and promotion of circuLar economy and sustainabLe consumption in business.

In addition to this, your Company aLso initiated responsibLe E waste management by authorized deaLers to recycLe the E waste. Your Company's incLusive sustainabLe business modeL is future ready and weLL equipped to enabLe its stakehoLder's progress.

Some of the Company's ESG initiatives incorporated that faLL under the SociaL (S) category, specificaLLy focusing on the S1: Labour Practices & Decent Work subcategory:

•    EmpLoyee HeaLth and Safety: Your Company prioritizes empLoyee weLLbeing by impLementing safety procedures and advisories, conducting training programs Like Mock Fire DriLLs, Defensive Driving and First Aid, EstabLishing an Emergency Response Team.

•    Diversity and IncLusion: The Women Safety Ambassador program promotes safety awareness specificaLLy for femaLe empLoyees, fostering a more incLusive safety cuLture. These initiatives demonstrate your Company's commitment in creating a safe and heaLthy work environment for its empLoyees, aLigning with the sociaL aspects of ESG reporting.

•    EmpLoyee DeveLopment: Your Company offers the "Nurturing Leaders" program to enhance

Leadership capabilities and buiLd a strong taLent pipeLine. This program contributes to a skiLLed and engaged workforce (S1 (GRI CATEGORY 400):    Labour Practices & Decent Work).

Your Company understands that it is essentiaL to safeguard its employees from illness, injuries, emergencies, health and safety hazards as well as any other wellbeing issues. Initiatives like Spectrum 2023, podcast series, Live Webcasts etc., are implemented at the executive and strategic levels to highlight our top leadership team's involvement in promoting diversity, inclusion, and unbiased practices. Our brand pillar "Rise for a More Equal World," which focuses on fostering a sense of inclusion and belonging in the Mahindra Financial Services sector, sought to deepen understanding of inclusion, break down unconscious bias, and dismantle stereotypes, resulting in a culture in which everyone feels valued, respected, and empowered to deliver business results.

Various trainings were provided to employees such as

1.    Unconscious Bias Training : Workshops for senior leadership and mid-level management to identify and address unconscious biases in decision-making.

2.    Spectrum-Inclusion Week : A week-long celebration of inclusion with learning activities, employee contests, and sociaL media engagement.

3.    Perspective Building Sessions : Senior leaders share their personaL journeys and approaches to D&I, emphasizing its importance to name a few.

Women play an important role in our success story and are encouraged to take on leadership positions. Recognizing the particular obstacles and untapped potential of women in leadership roles, your Company has created "She is on the Rise," a uniquely customized program meant to empower our female managers and push their success.

For the wellbeing of employee's, platforms such as the Alyve application, and the Employee Engagement Platform have been launched. The Alyve application has facilitated health as well as Eye Check-ups for 3000+ employees PAN India along with hosting mental wellness workshops.

Through the employee engagement platform, peer to peer appreciation and interaction were fostered through hobby club activities like book reading, photography etc.

Stakeholder engagement: Including employees and management in the training process fosters a sense of ownership and improves effectiveness. Your Company engages with its key stakeholders at regular intervals through implementation partners' meet, vendor meets, vehicle dealers meet, customer meets etc.

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Your Company Lays strong emphasis on customer centricity with a customer base spread across different villages in India, with majority of them belonging to the 'Earn and Pay' segment.

Equal Opportunity & Diversity: The Company's equal opportunity for persons with disabilities demonstrates a focus on fair treatment in the workplace (S1.1 Discrimination).

Women Employee Resource Group

•    Mahindra World of Women (MWOW): Events and workshops for women employees to network, share experiences, and develop leadership skills are conducted.

•    She is on the Rise: A program designed to empower women managers and address the challenges they face in leadership roles.

•    Policies for Women Employees: These address work-life balance challenges, including menstrual wellness leave, childcare support, maternity transition support and IVF reimbursement.

•    Prarambh Program: To empower women in Financial Services, your Company's Prarambh program is a strategic partnership with Manipal Academy of BFSI to address the gender gap in the financial services sector. This initiative provides a specialized training program exclusively for women candidates, equipping them with the skills necessary for successful careers at your Company. The Program empowers women and creates a more diverse talent pool, bringing valuable perspectives and skillsets like empathy and communication to the financial sector.

Governance (G) Category:

Corporate Governance:

Anti-Corruption Policy: The existence of an anti-bribery and anti-corruption policy demonstrates a commitment to ethical business practices (G4.5 Corruption).

Through the inclusive business model, your Company endeavours to cater to the bottom of the pyramid in the rural and semi-urban areas, enabling them to earn their livelihood through varied financial products and services. Through a wide network of branches, we are promoting local employment and building strong lasting relationships with our stakeholders.

Your Company has always been conscious of its role as a responsible corporate citizen and is building an inclusive organisation by empowering all the stakeholders and facilitating their contribution towards growth that is both holistic and long term. Through its wide network of branches with locaLy recruited employees, strong and lasting relationships with its stakeholders, large customer base, vast experience and market knowledge, your Company is providing financial resources to underserviced regions of the country.

Integrated Reporting

Your Company i s pleased to present i ts holistic performance for FY2024, in the Integrated Report of the Company. This

report includes details such as the organisation's strategy, governance framework, performance and prospects of value creation based on the six capitals-Financial, Manufactured, Intellectual, Human, Social & Relationship and Natural capital.

Corporate Social Responsibility (CSR)

With a vision to transform rural and semi-urban India into a self-reliant, flourishing landscape, your Company started its journey in 1991 and has grown into a leading NBFC with an employee base of around 26,662 employees all over India. By working with around 28 implementing partners in the areas of Education & Livelihood, Healthcare and Environment, your Company strives to become an asset in the communities where it operates. Your Company's Corporate Social Responsibility (CSR) initiatives are aligned with the Company's purpose to drive positive change in the lives of our communities and aligned with national priorities.

1. CSR Committee

Your Company has duly constituted a CSR Committee in accordance with Section 135 of the Companies Act, 2013 to assist the Board and the Company in fulfilling the corporate social responsibility objectives of the Company. The Committee presently comprises of the following Directors:

Name	Category
Mr. Dhananjay Mungale	Independent Director
(Chairperson)	Â
Ms. Rama Bijapurkar	Independent Director
Mr. Raul Rebello	Managing Director & CEO

*Mr. Ramesh Iyer ceased to be member of the Committee upon superannuation with effect from 29^th April 2024. Mr. Raul Rebello was inducted as the member of the Committee with effect from 30^th April 2024.

During the year under review, 3 (three) CSR Committee Meetings were held, details of which are provided in the Corporate Governance Report. The CSR Committee inter-alia, reviews and monitors the CSR as well as BRSR activities. The terms of reference of the CSR Committee were enhanced to inter-alia include formulation of BRSR Policies as against Business Responsibility Policies, undertake periodic assessment of BRSR activities.

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With a vision to transform rural and semiurban India into a self-reliant, flourishing landscape, your Company started its journey in 1991 and has grown into a leading NBFC with an employee base of around 26,662 employees all over India.

2.    CSR Policy

The CSR Policy approved by the Board encompasses the approach and guidance given by the Board taking into account the recommendations of the CSR Committee, including principles for management of the CSR Project(s)/Program(s) and formulation of the Annual Action Plan.

During the year under review, the CSR Policy of the Company was amended to inter-alia, align it with CSR Rules and broad base CSR mission statement.

The CSR Policy has been hosted on the website of the Company at: https://www.mahindrafinance. cnm/investnr-relatinns/pnlicy-and-sharehnlder-infnrmatinn#mmfsl-pnlir.ie.s

3.    CSR Initiatives

i.    ‘Swabhimaan'- CSR Flagship Program

Your Company had launched CSR flagship program for Drivers Community in FY2021 (Project "Swabhimaan" or "Self- Respect"), which is aimed at upliflment of drivers and their family members.

In FY2024, to further solidify its commitment towards the well-being of the driver communities, your Company successfully implemented its flagship program- 'Swabhimaan. This multiyear program's focus has been to address the professional, financial, and familial challenges faced by the drivers and their families and further contribute to their overall well-being. In FY2024, we reached out to over 19,100+ beneficiaries across India. Through the Swabhimaan program, your Company provided 4-wheeler vehicle driving training to 960+ youth, E/Auto Rickshaw Training to 300+ women from underprivilege families, road safety training to 15,590+ existing drivers and awarded scholarships to 2,270+ children of drivers. Through above interventions, your Company impacted lives of 2,000+ women beneficiaries.

ii.    Financial & Digital Literacy Awareness Program

Your Company launched two pilot projects on Financial & Digital Literacy Awareness Program. The objective of the first project for MSME was to provide financial & digital Literacy, business skills training for Nano and Micro-enterprises like people working at Kirana Store, Job Work, Retail Shops, Restaurants. The objective of another project for GiG workers was imparting financial planning skills to individuals such as farmers, drivers, self-employed from low-income community to achieve better savings, awareness of financial instruments, safeguard from digital frauds with basic details about vehicle maintenance.

Under this program, we conducted minimum 40 hours training for 39,210+ final year female students in classrooms across government/ government aided colleges, polytechnics industrial training    institutions, employer

premises etc. to enhance their employability prospects. The modular MPC training program focusses on life, language and aptitude skills To facilitate students who have been trained in the MPC are placed with organizations working in their core trade/ domain an innovative, tech-enabled job drive, known as 'Job Utsav' is conducted to bring together the best employers and a great talent pool trained under the MPC program.

v.    Mahindra Pride Skill centers (MPSC)

You Company continued its support to MPSC which are specifically designed to economically empower women through training in domain and employability skills. The major focus are / ITES, retail, hospitality, BFSI and other sectors By addressing the unique requirements of the job market and emphasising the development of both technical and soft skills, the model aims to equip women with the knowledge, skills and confidence needed to succeed in their careers As part of this initiative, 1,000 women were trained under IT / ITES, retail, hospitality, TaUy IT&GST and 80% of the trained women were supported in securing a gainful employment.

vi.    Project Hariyali

The Project Hariyali is a continuation of the Hariyali programme started in 2010 in Araku This program focuses on natural resource management and global regenerative organic farming protocols as a means to increasing a community's income and improving its agricultural eco-system for an overall wellbeing of the community. In FY2024, your Company planted 3,45,900+ saplings of coffee fruit, legume and forest species in the Araku region jointly with local communities.

vii.    Water Conservation Project

As part of the Environmental Sustainability, your Company constructed 4 Rainwater Harvesting Structures in the ZP Schools / Adivasi Padas of Shahapur and 7 Farm Ponds on the farmer's lands in village Kheware, Murbad, Thane Maharashtra along with protective fencing to the ponds, solar panels in farm pond and solar pumps. This project is expected to conserve 4,80,00,000 liters of rainwater for irrigation which will ensure accessibility of water round the year for household and farming purpose and enable farmers to take 2/3 crops. This project is expected to support 2,450 beneficiaries from the rural areas of Maharashtra.

 

Through above projects, your Company created awareness amongst 26,200+ individuals from semi urban & urban areas. During the training, we encouraged 4,900+ individual to downLoad Digi Locker app in their respective cell phone which helps them to build backup and instantly access important documents like Aadhar, PAN, driving licenses, vehicle registration certificates, academic marksheets etc.

iii.    Nanhi Kali

Reaffirming its commitment to the cause of education, your Company continued its support to the Project Nanhi Kali which has benefitted over 5,880+ underprivileged girl children from socially and economically marginalised families living in urban, rural, and tribal parts of India.

With the aim of helping girls complete schooling, Project Nanhi Kali provides girls (from Class 1-10) with comprehensive support including two hours of daily after-school remedial classes at Nanhi Kali Academic Support Centres. To further enhance the quality of education imparted to the girls, Project Nanhi Kali has partnered with a leading EdTech organisation, Educational Initiatives. The girls also receive an annual school supplies kit comprising a school bag, stationery and feminine hygiene material, enabling them to attend school with dignity.

Further, to accelerate bridging the digital gender gap in India, and to promote gender equality and empowerment of girls through education and training programmes, Nanhi Kali's Digital Equalizer for Girls Training Programme was introduced for underprivileged girls enrolled in Classes 9-12. In FY2024, your Company trained 14,543 girls as part of this innovative initiative.

iv.    Mahindra Pride Classroom (MPC)

Your Company continued Mahindra Pride Classroom to reach out to marginalised and socially excluded women to create job opportunities in various sectors and enable women to become financially independent and participate actively in the workforce.

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Through the Swabhimaan program, your Company provided 4-wheeLer vehicle driving training to 960+ youth, E/Auto Rickshaw Training to 300+ women from underprivilege families, road safety training to 15,590+ existing drivers and awarded scholarships to 2,270+ children of drivers.

viii.    Project Sehat

In the area of healthcare, your Company organised nationwide blood donation drives in which 3,900+ Blood Units were collected, Pan India. Your Company also conducted 8 health camps benefitting 1,630 individuals.

ix.    Project Hunnar: Skill development for Persons with Disabilities

Your Company continued its support to Persons with Disabilities by training 250+ beneficiaries under 'Hunnar' program in various skills in Banking and Financial Services and Insurance ("BFSI"), hospitality and Information Technology Enabled Services ("ITES") sectors to enhance their employability.

Employees Volunteering

Your Company has always encouraged the employees to participate in various CSR initiatives to drive positive changes amongst the community. During the reporting period, 22,500+ employees (85%) contributed 1,22,700+ person hours in various virtual and CSR Calendar initiatives undertaken by the Company like blood donation, tree plantation, Swachh Bharat, visit to municipal school, visit to Orphanages, Old age Homes & centres for Differently Abled to reaffirm its pledge to the society. Through employees volunteering, planted ~52,000 saplings to increase green cover near our branches.

Apart from the key thrust areas, your Company contributed funds for other causes such as preservation and promotion of the fine arts and culture, welfare of the armed forces and supporting underprivileged community.

In FY2024, your Company conducted "CSR Implementation Partner's Meet" on 7^th Feb 2024with the participation of 12 implementation partners. Such stakeholder engagement presents the opportunity to foster collaborations, interact with the senior management, networking and sharing of best practices amongst varied implementation partners. During the meet, your Company honoured three of its partners (NGO) as "Best CSR implementation Partners 2023" and rest with Token of appreciation. It also organized capacity building workshop on "Data driven impact measurement" for its implementation partners.

4. CSR Spend

As per the provisions of Section 135 of the Companies Act, 2013 ("the Act") read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules"), the mandatory CSR spend of the Company for FY2024 was ' 29.96 crore, against which your Company has spent ' 25.27 crore during the year and an amount of ' 4.71 crore has been transferred to MMFSL Unspent CSR Account 2024, (the Company has transferred an unspent amount of ' 4.71 crore vis-a-vis ' 4.69 crore) which shaU be spent within prescribed timelines towards ongoing program on Financial & Digital Literacy Awareness.

Further, in terms of the CSR Rules, Chief Financial Officer has certified that the funds disbursed have been utilised for the purpose and in the manner approved by the Board for FY2024.

5.    Annual Report on CSR Activities

The Annual Report on the CSR activities undertaken by your Company during the year under review, as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is set out in “Annexure II" of this Report.

6.    Impact Assessment of CSR Projects

In compliance with the rule 8(3) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, executive summary and web links of impact assessment reports with respect to Company's CSR projects which meet the prescribed criteria, will be provided once the same are completed. Your Company has engaged independent agencies to carry out the impact assessment for the aforesaid projects.

Cyber Security

To secure the Company's digital transformation efforts, your Company has ensured that it has complete visibility of all digital assets-on-premises, in the cloud, and across IoT devices and remote networks. Processes have been defined and implemented to ensure as the advances in the journey of digital transformation our technology infrastructure also transforms to identify and mitigate the emerging risks.

Your Company has also embarked on the journey to align itself with the data privacy related legal and regulatory guidelines covering collection, storage and usage of sensitive data. The Company has implemented threat monitors such as Web Application FirewaH (WAF), Data Loss Prevention, Web Content Filtering, Endpoint Detection & Response (EDR), Threat Intel Services etc. followed by protection of data through encryption, masking (transit and rest) etc. which helps in detecting/ blocking the intrusions and attempts of data breach.

The Company also imparts periodical cyber and data privacy related trainings to staff including to Board Members which helps them to recognize common tricks that malicious actors use to infiltrate systems thus, securing the human link as well.

During the year under review a cyber incident had occurred, details of which are given in note no. 43 to the Standalone financial statements forming part of this Annual report. The Company was able to build back the applications from the immutable backups. The core systems remained unimpacted and peripheral systems were restored soon after.

Your Company has implemented a robust risk management and governance framework supported by policies, processes, threat intel services, tools, technologies, continuous & periodic cyber assessments to identify the

emerging and existing risks that our digital, assets are exposed to.

Your Company wiLL continue its focus on security monitoring and incident response through its security operations centre.

Annual Return

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with rule 12(1) of the Companies (Management and Administration) RuLes, 2014, the Annual Return in Form No. MGT-7, is available on the Company's website and can be accessed at the web-link https://www.mahindrafinance.com/investor-reLations/ financiaL-information#annuaL-reports

Board & Its Committees Board

Your Company recognises and embraces the importance of a diverse Board in its success. The confluence of Directors on the Board with different knowledge and skiLLs, perspective, regional and industry experience, cultural and geographical background ensures that your Company retains its competitive advantage.

As on 31^st March 2024, the Board of your Company consisted of 11 Directors comprising of a Non-Executive Chairman, 2 Executive Directors, 2 Non-Executive NonIndependent Directors and 6 Independent Directors, of whom 2 are Women Directors.

Committees constituted by the Board of Directors

The Board Committees are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

The details of the Board Committees along with their composition, powers, terms of reference, etc. are given in the Report on Corporate Governance, which forms part of this Annual Report.

Audit Committee

As on 31^st March 2024, the Audit Committee comprised of 5 Independent Directors and 1 Non-Executive Non-Independent Director:

Name	Category
Mr. C. B. Bhave	Chairman of the Committee (Independent Director)
Mr Dhananjay MungaLe	Independent Director
Ms. Rama Bijapurkar	Independent Director
Mr MiLind Sarwate	Independent Director
Mr. Diwakar Gupta	Independent Director
Mr Amarjyoti Barua	Non-Executive Non- Independent Director, appointed w.e.f. 27th October 2023

Changes in Audit Committee Members:

• Mr. Amit Kumar Sinha ceased to be a Member of the Committee with effect from dose of business hours on 28^th July 2023.

The composition of Audit Committee is over and above the minimum requirement prescribed under the Act, SEBI Listing ReguLations, and the RBI Regulations for NBFCs (the 'NBFC Regulations') of having a minimum of two-thirds of independent directors, incLuding the Chairman. ALL members of the Committee are non-executive directors possessing financiaL Literacy, and expertise in accounting or financiaL management reLated matters.

During the year under review, 7 Audit Committee Meetings were heLd. Further, the terms of reference of the Audit Committee were enhanced during the year under review, to incLude oversight of Information Security Audit of the Company in terms of RBI Master Direction dated 7^th November 2023 on Information TechnoLogy Governance, Risk, ControLs and Assurance Practices.

ALL the recommendations of the Audit Committee were approved and accepted by the Board during the year under review.

Meetings and Postal Ballot

The Board of Directors met 5 times during the year under review i.e., on 28^th April 2023, 28^th JuLy 2023, 27^th October 2023, 14^th December 2023 and 30^th January 2024, as against the statutory requirement of at Least four meetings. The requisite quorum was present at aLL the Board Meetings. The maximum time gap between any two Meetings was not more than one hundred and twenty days. These Meetings were weLL attended. The 33^rd AGM of the Company was heLd on 28^th JuLy 2023 through Video Conference.

During the year under review, no Extraordinary General Meeting ("EGM") of the Members was heLd.

During the year under review, members by way of speciaL resoLution passed through postaL baLLot on 19^th January 2024, approved alteration to the Memorandum of Association ("MOA") of the Company by inserting sub-cLause 1f. under "Main objects of the Company to authorise the Company to soLicit, procure insurance business inter-aLia as a Corporate Agent and undertake aLL incidentaL activities and amendment to cLause III. (v) of the MOA to excLude the restriction on the Company to undertake any business faLLing under the purview of Insurance Act, 1938. The voting resuLts were announced on 20^th January 2024 and submitted to the stock exchanges where securities of the Company were Listed.

DetaiLed information on the Meetings of the Board, its Committees, Postal BaLLot and the AGM is included in the Report on Corporate Governance, which forms part of this Annual Report.

A caLendar of aLL the meetings is prepared and circuLated weLL in advance to the Directors.

Meetings of Independent Directors

The Independent Directors met twice during the year under review, on 24^th August 2023 and 27^th March

2024. The Meetings were conducted without presence of the WhoLe-time Director(s), the Non-Executive NonIndependent Directors, Chief FinanciaL Officer or any other Management PersonneL to enabLe the Independent Directors to discuss matters pertaining to, inter-aLia, review of performance of Non-Independent Directors and the Board as a whoLe, review the performance of the Chairman of the Company, assess the quaLity, quantity and timeLiness of flow of information between the Company Management & the Board and its Committees and free flow discussion on any matter that is necessary for the Board to effectiveLy and reasonably perform their duties.

Directors and Key Managerial Personnel

Appointment/Re-appointment of Directors during FY2024 and upto the date of this report

•    Appointment of Mr. Raul Rebello as the Executive Director

Pursuant to the recommendation of Nomination and Remuneration Committee ("NRC") and the Board of Directors, the Members of the Company at the AnnuaL GeneraL Meeting heLd on 28^th JuLy

2023,    appointed Mr. RauL RebeLLo (DIN: 10052487), as the WhoLe-time Director and KMP designated as Executive Director and MD & CEO-designate with effect from 1^st May 2023 to 29^th ApriL 2024 (both days incLusive) and as the Managing Director of your Company designated as Managing Director & CEO with effect from 30^th ApriL 2024 up to 30^th ApriL 2028 (both days incLusive), LiabLe to retire by rotation.

Mr. RauL RebeLLo assumed the position of "Managing Director & CEO" of the Company w.e.f., 30^th ApriL

2024,    after superannuation of Mr. Ramesh Iyer, ViceChairman and Managing Director of the Company effective cLose of business hours of 29^th ApriL 2024.

•    Appointment of Mr. Ashwani Ghai as a NonExecutive, Non-Independent Director of the Company

Pursuant to the recommendation of NRC, the Board of Directors of the Company appointed Mr. Ashwani Ghai (DIN: 09733798), as an AdditionaL Director of your Company, with effect from 23^rd June 2023. The Members of the Company have at the AnnuaL GeneraL Meeting heLd on 28^th JuLy 2023, approved the appointment of Mr. Ashwani Ghai as a Non-Executive, Non-Independent Director of the Company, LiabLe to retire by rotation.

•    Appointment of Mr. Amarjyoti Barua as a NonExecutive, Non-Independent Director of the Company

Pursuant to the recommendation of NRC and the Board of Directors of the Company, the Members of the Company have at the AnnuaL GeneraL Meeting heLd on 28^th JuLy 2023, approved the appointment of Mr. Amarjyoti Barua (DIN: 09202472) as a Non-Executive Non-Independent Director of your Company with effect from 28^th JuLy 2023, LiabLe to retire by rotation.

•    Re-appointment of Mr. Milind Sarwate as an Independent Director of the Company

Based on the recommendation of NRC and the Board of Directors, the Members of the Company have by means of a SpeciaL ResoLution passed at the AnnuaL GeneraL Meeting heLd on 28^th JuLy 2023, approved re-appointment of Mr. MiLind Sarwate (DIN: 00109854), as an Independent Director of the Company for a second term of five consecutive years each, commencing from 1^st ApriL 2024 to 31^st March 2029 (both days incLusive) not LiabLe to retire by rotation.

•    Appointment of Mr. Vijay Kumar Sharma as an Additional Director (Independent and NonExecutive)

Basis recommendation of the NRC, the Board of Directors of the Company have subject to the approvaL of the members of the Company, approved the appointment of Mr. Vijay Kumar Sharma (DIN: 02449088) as an AdditionaL Director (Independent and Non-Executive) for a 1^st term of 5 consecutive years with effect from 15^th May 2024 to 14^th May 2029, not LiabLe to retire by rotation. In the opinion of the Board, Mr. Vijay Kumar Sharma hoLds high standards of integrity, expertise and experience (incLuding the proficiency). He is exempted from the requirement to undertake the onLine proficiency seLf-assessment test.

The necessary resoLution seeking approvaL of the members of the Company for appointment of Mr. Vijay Kumar Sharma as an Independent Director has been incorporated in the Notice of 34^th AnnuaL GeneraL Meeting of the Company.

Cessation of Directors

•    Mr. Siddhartha Mohanty (DIN: 08058830) NonExecutive Non-Independent Director, representing Life Insurance Corporation of India ("LIC") on the Board of the Company ceased to be the Director of your Company effective 12^th May 2023 as he assumed charge as Chairperson of LIC.

•    Mr. Amit Kumar Sinha (DIN: 09127387), Non-Executive Non-Independent Director of the Company was LiabLe to retire by rotation at the 33^rd AGM of the Company heLd on 28^th JuLy 2023 and was eLigibLe for re-appointment. However, Mr. Sinha did not seek re-appointment due to his transition to a new roLe in Mahindra Group and consequentLy ceased to be Director of your Company w.e.f. 28^th JuLy 2023.

The Board records appreciation for services rendered by Mr. Siddhartha Mohanty and Mr. Amit Kumar Sinha.

•    On attaining superannuation, Mr. Ramesh Iyer ceased to be the Vice-Chairman & Managing Director of your Company effective cLose of business hours of 29^th ApriL 2024.

An annuaL performance evaLuation exercise was carried out compLiance with the appLicabLe provisions of the Act, Listing ReguLations, the Company's Code of Independent Directors and the criteria and methodoLogy of performance evaluation approved by the NRC as under:

 

Evaluating body	Evaluatee	Broad criteria and parameters of evaluation	Process of evaluation
The Board, the NRC and the Independent Directors	The Board as a whole	Review of fuLfiLment of Board's responsibilities including strategic direction, financiaL reporting, risk management framework, ESG, grievance redressaL, succession pLanning, knowLedge of industry trends, diversity of Board etc. and feedback to improve Board's effectiveness.	Internal assessment through a structured and separate rating based questionnaire for each of the evaluations. The evaLuation is carried out on a secured online portal whereby the evaluators are able to submit their ratings and quaLitative feedback, detaiLs of which are accessibLe onLy to the NRC Chairperson. The NRC aLso reviews the impLementation and compLiance of the evaluation exercise done annually. The resuLts and outcome are evaLuated, deliberated upon and noted by the Independent Directors, the NRC and the Board at their respective meetings.
The Board	The Committees of the Board (separately for each Committee)	Structure, composition, attendance and participation, meetings of Committees, effectiveness of the functions handLed, independence of the Committee from the Board, contribution to decisions of the Board etc.
The Board, the NRC, and the Independent Directors	Independent Directors including those seeking re-appointment, Non-Independent Directors, and the MD (excluding the Director being evaluated)	QuaLifications, experience, skiLLs, independence criteria, integrity of the Directors, contribution and attendance at meetings, abiLity to function as a team and devote time, fuLfiLment of functions, abiLity to chaLLenge views of others in a constructive manner, knowLedge acquired with regard to the Company's business, understanding of industry, fairness and transparency demonstrated, adequacy of resource staffing.
The Board, the NRC and the Independent Directors	Chairperson	SkiLLs, expertise, effectiveness of Leadership, effective engagement with other Board members during and outside meetings, aLLocation of time to other Board members at the meetings and ability to steer the meetings, commitment, impartiality, ability to keep shareholders' interests in mind, effective engagement with shareholders during general meetings etc.	Â

 

The Board of Directors pLaces on record its deepest appreciation for the exempLary contribution, strategic foresight, innovative thinking, and steadfast commitment to excellence of Mr. Ramesh Iyer which has propeLLed Mahindra & Mahindra Financial. Services Limited to new heights, earning the organization recognition and respect within the industry. The Board is confident that Mr. RauL RebeLLo, the Managing Director & CEO wiU build a stronger edifice on the strength of this solid foundation laid by Mr. Ramesh Iyer during his long tenure as Managing Director of your Company.

During the year under review, no Independent Director resigned from the Board.

Retirement by Rotation

In terms of provisions of Section 152 of the Companies Act, 2013, Dr. Anish Shah, Non- Executive Chairman is liable to retire by rotation and, being eligible, has offered himself for re-appointment at the 34^th Annual General Meeting of the Company scheduled to be held on 23^rd July 2024.

Re-appointment of Independent Directors

No Independent Director of your Company is due for reappointment in FY2025.

Fit and Proper and Non-Disqualification declaration by Directors

ALL the Directors of the Company have confirmed that they satisfy the "fit and proper" criteria as prescribed under Chapter XI of RBI Master Direction No. RBI/DoR/2023-24/106 DoR. FIN.REC.No.45/03.10.119/2023-24 dated 19^th October 2023, as amended, and that they are not disqualified from being appointed/continuing as Directors in terms of Section 164 (1) and (2) of the Companies Act, 2013.

Declaration by Independent Directors

ALL the Independent Directors of your Company have given their decLarations and confirmation that they fuLfiLL the criteria of Independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations and have aLso confirmed that they are not aware of any circumstance or situation, which exist or may be reasonabLy anticipated, that couLd impair or impact their abiLity to discharge their duties with an objective independent judgment and without any externaL influence.

Further, the Board after taking these decLarations/ discLosures on record and acknowLedging the veracity of the same, concLuded that the Independent Directors hoLd highest standards of integrity and possess the reLevant proficiency, expertise and experience to quaLify and continue as Independent Directors of the Company and are Independent of the Management of the Company.

In terms of Section 150 of the Companies Act, 2013 read with RuLe 6 of the Companies (Appointment and QuaLification of Directors) RuLes, 2014, as amended, Independent Directors of the Company have confirmed that they have registered themseLves with the databank

maintained by The Indian Institute of Corporate Affairs, Manesar ('IICA') and the said registration is renewed and active.

The Independent Directors of the Company are either exempted from the requirement to undertake the onLine proficiency seLf-assessment test conducted by IICA or have cLeared the onLine proficiency seLf-assessment test as applicable.

Key Managerial Personnel

The foLLowing persons were designated as the Key ManageriaL PersonneL ("KMP") of your 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, as on 31^st March 2024:

1.    Mr. Ramesh Iyer, Vice-Chairman & Managing Director

2.    Mr. RauL RebeLLo, Executive Director and MD & CEO-designate

3.    Mr. Vivek Karve, Chief FinanciaL Officer of the Company

4.    Ms. BrijbaLa BatwaL, Company Secretary

Changes in Key Managerial Personnel

•    On attaining superannuation, Mr. Ramesh Iyer has ceased to be the Vice Chairman & Managing Director and KMP of the Company effective cLose of business hours of 29^th April 2024.

•    Mr. RauL RebeLLo has assumed the office of Managing Director & CEO of the Company effective 30^th April 2024.

Directors' Responsibility Statement

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, ("the Act") your Directors, based on the representations received from the Operating Management and after due enquiry, confirm that:

i.    In the preparation of the annuaL accounts for financiaL year ended 31^st March 2024, the appLicabLe accounting standards have been foLLowed and there are no materiaL departures in adoption of these standards.

ii.    They have seLected such accounting poLicies and appLied them consistentLy and made judgments and estimates that are reasonabLe and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March 2024 and of the profit of the Company for the year.

iii.    They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irreguLarities.

iv.    They have prepared the annuaL accounts for financiaL year ended 31^st March 2024 on a going concern basis.

v.    They have Laid down adequate internaL financiaL controLs to be foLLowed by the Company and that such internaL financiaL controLs were operating effectiveLy during the financiaL year ended 31^st March 2024.

vi.    They have devised proper systems to ensure compLiance with provisions of aLL appLicabLe Laws and that such systems were adequate and operating effectiveLy during the financiaL year ended 31^st March 2024.

The questionnaires for performance evaLuation are comprehensive and in aLignment with the guidance note on Board evaLuation issued by the SEBI, vide its circuLar no. SEBI/HO/CFD/CMD/CIR/P/2017/004 dated 5^th January 2017 and are in Line with the criteria and methodoLogy of performance evaLuation approved by the NRC.

Outcome and results of the performance evaluation

ALL the Directors of your Company as on 31^st March 2024 had participated in the evaLuation process. The Directors expressed their satisfaction with the AnnuaL performance evaLuation process of Board & Committees. During the year under review, NRC ascertained and re-affirmed that the depLoyment of "questionnaire" as a methodoLogy, is effective for evaLuation of performance of Board and

Performance Evaluation of the Board

The Companies Act, 2013 ("Act") and the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations") stipuLate the evaLuation of the performance of the Board, its Committees, individuaL Directors and the Chairperson.

Your Company has formuLated a process for performance evaLuation of the Independent Directors, the Board, its Committees and other individual Directors which includes criteria for performance evaLuation of the Non-Executive Directors and Executive Directors.

Committees and IndividuaL Directors. The resuLts of the EvaLuation for the year under review were shared with the Board, Chairperson of respective Committees and individuaL Directors.

It was noted that the Meetings of the Board and Committees are weLL managed in terms of comprehensive updates sent weLL in advance, constructive participation and deLiberations at the meeting Led by the Chair, enabLing Board and Committees to fuLfiL their statutory / review roLe and focus on Governance and InternaL ControLs. It was aLso noted that the Company during the year under review faciLitated famiLiarisation on cyber security, Prohibition of Insider Trading ReguLations, BRSR framework and provided reguLar updates to Board on aLL key matters.

The results of Evaluation showed high LeveL of commitment and engagement of Board, its various Committees and senior leadership. Based on the outcome of the evaluation for the year under review, the Board shaLL enhance its focus on providing strategic direction, digital initiatives, oversee regulatory matters and maintaining high standards of governance, to enhance value for aLL stakeholders while deepening its focus on ESG and risk management.

Based on the results of the evaluation, the Board has agreed on an action plan to further improve the effectiveness and functioning of the Board. The suggestions from previous evaluations were implemented by the Company during FY2024.

Familiarisation Programme for Directors

Your Company has adopted a structured programme for orientation of aLL Directors including the Independent Directors so as to famiLiarise them with the Company-its operations, business, industry, environment in which it functions, Indian and gLobaL macro-economic front and the reguLatory regime appLicabLe to it. The Management updates the Board Members on a continuing basis of any significant changes therein and provides them an insight to their expected roles and responsibilities so as to be in a position to take weLL-informed and timeLy decisions and contribute significantLy to the Company. The Directors are provided with all the documents to enable them to have a better understanding of the Company, its operations and the industry in which it operates.

The Independent Directors of your 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. The terms of reference of aLL the Committees with updations, if any, is shared with aLL the Board Members on quarterly basis.

Managing Director and Senior Management provide an overview of the operations and famiLiarise the Directors on matters related to the Company's values and commitments. They are aLso introduced to the organisation structure, constitution of various committees, board procedures, risk management strategies etc.

Strategic Presentations are made to the Board where Directors get an opportunity to interact with Senior Management. Directors are aLso informed of the various developments in the Company through Press Releases, emails, etc. Your Company has a secured Board portal which inter-alia provides a one stop and seamless solution for access to Board/Committee materiaLs to aLL the Directors. The Board portaL aLso contains AnnuaL Report, Code of Conduct for Directors, terms of appointment, committee charters etc. for ease of access. This enabLes greater transparency to the Board processes.

Pursuant to the provisions of the Companies Act, 2013 and ReguLation 25(7) of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing Regulations"), your Company has during the year conducted famiLiarization programmes through briefings

at Board/ Committee meetings for aLL its Directors including Independent Directors.

DetaiLs of famiLiarization programs imparted to the Independent Directors during the financiaL year under review in accordance with the requirements of the Listing Regulations are available on the Company's website and can be accessed at the webLink: https:// www.mahindrafinance.com/investor-reLations/poLicy-and-sharehoLder-information#famiLiarization-program and is also provided in the Corporate Governance Report forming part of this AnnuaL Report.

Policies on Appointment of Directors and Senior Management and Remuneration of Directors, Key Managerial Personnel and Employees

i)    Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management

In accordance with the provisions of Section 134(3) (e) of the Companies Act, 2013 ("the Act") read with Section 178 of the Act and ReguLation 17 of the SEBI (Listing Obligations and Disclosure Requirements) ReguLations, 2015 ("the Listing ReguLations"), your Company has adopted a PoLicy on Appointment of Directors and Senior Management and succession pLanning for orderLy succession to the Board and the Senior Management, which, inter-alia, incLudes the criteria for determining quaLifications, positive attributes and independence of Directors, identification of persons who are quaLified to become Directors and who may be appointed in the Senior Management team, succession pLanning for Directors and Senior Management, and the Talent Management framework of the Company. During the year under review, there were no changes in the said policy.

The said poLicy is avaiLabLe on the website of the Company and can be accessed at https://www. mahindrafinance.com/investor-reLations/poLicy-and-sharehoLder-information#mmfsL-poLicies

ii)    Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel, Senior Management and other Employees of the Company

Your Company has also adopted the Policy on Remuneration of Directors and the Remuneration PoLicy for Key ManageriaL PersonneL, Senior Management and other EmpLoyees of the Company in accordance with the provisions of Sub-section (4) of Section 178 of the Act, ScaLe Based ReguLations notified by the Reserve Bank of India ("RBI") and Listing Regulations.

During the year under review the Policy on Remuneration of Directors of the Company was amended to, inter-aLia, aLign with existing LegaL provisions and introduce certain standard clauses.

The said PoLicy is upLoaded on the website of the Company and can be accessed at: http.s://www. mahindrafinance.com/investor-relations/policy-and-shareholder-information#mmfsl-poli^.ies

Adequacy of Internal Financial Controls with Reference to the Financial Statements

Your Company has in pLace adequate internaL financiaL controLs with reference to the FinanciaL Statements commensurate with the size, scaLe and compLexity of its operations.

Your Company uses various industry standard systems to enable, empower and engender businesses and also to maintain its Books of Accounts. The transactionaL controLs built into these systems ensure appropriate segregation of duties, the appropriate LeveL of approvaL mechanisms and maintenance of supporting records. The systems, Standard Operating Procedures and controls are reviewed by the Management.

Your Company's internaL financiaL controLs are depLoyed through InternaL ControL-Integrated Framework (2013) issued by the Committee of Sponsoring Organisations of the Treadway Commission ("COSO"), that addresses materiaL risks in your Company's operations and financiaL reporting objectives. Such controls have been assessed during the year under review taking into consideration the essentiaL components of internaL controLs stated in the Guidance Note on Audit of InternaL FinanciaL ControLs Over FinanciaL Reporting ("ICFR") issued by The Institute of Chartered Accountants of India. The risk controL matrices are reviewed on a quarterly basis and control measures are tested and documented on a quarterLy basis. The Company has IT systems in pLace making the ICFR process completely digital and strengthening the review and monitoring mechanism. Based on the assessments carried out by the Management during the year, no reportable materiaL weakness or significant deficiencies in the design or operation of internaL financiaL controLs were observed.

Your Company recognises that internaL financiaL controLs cannot provide absoLute assurance of achieving financiaL, operational and compliance reporting objectives because of its inherent Limitations. ALso, projections of any evaLuation of the internaL financiaL controLs to future periods are subject to the risk that the internaL financiaL controL may become inadequate because of changes in conditions or that the degree of compLiance with the policies or procedures may deteriorate. Accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.

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In compliance with RBI circular dated 3^rd February 2021, the Audit Committee has approved a Risk Based Internal Audit ("RBIA") framework, along with appropriate processes and plans for internal audit of FY2024.

Joint Statutory Auditor's certification on Internal Financial Controls

The Joint Statutory Auditors of your Company viz. M/s DeLoitte Haskins & SeLLs, Chartered Accountants and M/s. Mukund M. ChitaLe & Co., Chartered Accountants have examined the internaL financiaL controLs of the Company and have submitted an unmodified opinion on the adequacy and operating effectiveness of the internaL financiaL controLs over financiaL reporting as at 31^st March 2024.

Internal Audit Framework

Your Company has in place an adequate internal audit framework to monitor the efficacy of the internaL controLs with the objective of providing to the Audit Committee and the Board of Directors, an independent, objective and reasonabLe assurance on the adequacy and effectiveness of the Company's processes. The internaL audit approach verifies compLiance with the operationaL and system related procedures and controls.

Separate meetings between the Chief Internal Auditor and the Audit Committee

Separate meetings between the Chief InternaL Auditor and the Audit Committee, without the presence of Management, were enabLed to faciLitate free and frank discussion amongst them. The meetings were heLd on 28^th ApriL 2023, 22^nd September 2023, 27^th October 2023 and 27^th March 2024.

Risk Based Internal Audit (“RBIA”) framework

In compliance with RBI circular dated 3^rd February 2021, the Audit Committee has approved a Risk Based InternaL Audit ("RBIA") framework, aLong with appropriate processes and pLans for internaL audit of FY2024 and FY2025. The Risk Based InternaL Audit PLan is aLso being reviewed by the Statutory Auditors and Chief Risk Officer before being approved by the Audit Committee.

The audit pLan is aimed at evaLuation of the efficacy and adequacy of internaL controL systems and compLiance thereof, robustness of internaL processes, poLicies and accounting procedures and compliance with laws and reguLations. Based on the reports of internaL audit, function/ process owners undertake corrective action in their respective areas. Significant audit observations are tracked and presented to the Audit Committee, together with the status of the management actions and the progress of the impLementation of the recommendations on a reguLar basis.

Risk Management

Risk Management forms an integraL part of the Company's business. Your Company has a comprehensive Risk Management Policy in place and has laid down a well-defined risk management framework to identify, assess and monitor risks and strengthen controLs to mitigate risks. Your Company has established procedures to periodically pLace before the Risk Management Committee and the Board of Directors, the risk assessment and minimisation procedures being foLLowed by the Company and steps taken by it to mitigate these risks.

The Risk Management PoLicy, inter-aLia, includes identification of elements of risk, including Cyber Security and related risks as weLL as those risks which in the opinion of the Board may threaten the existence of the Company.

The 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. Your Company has a robust organisational structure for managing and reporting on risks. This risk management mechanism works at aLL the levels, which acts as the strategic defence cover of the Company's risk management and is supported by regular review, control, self-assessments and monitoring of key risk indicators. The Risk Management Committee ("RMC") constituted by the Board manages the integrated risk and reviews periodicaLLy the Risk Management PoLicy and strategy foLLowed by the Company.

In compLiance with ScaLe Based ReguLations, the Board of Directors have basis recommendation of RMC adopted ICAAP PoLicy and Framework with the objective of ensuring avaiLabiLity of adequate capitaL to support aLL risks in business as aLso enabLe effective risk management system in the Company.

The Chief Risk Officer ("CRO") oversees and strengthens the risk management function of the Company. The CRO is invited to the Board, Audit Committee, Asset Liability Committee and Risk Management Committee Meetings. The CRO aLong with members of the Senior Management apprises the Risk Management Committee and the Board on the risk assessment, process of identifying and evaLuating risks, major risks as weLL as the movement within the risk grades, the root cause of risks and their impact, key risk indicators, risk management measures and the steps being taken to mitigate these risks.

Auditors and Audit Reports

Joint Statutory Auditors and their Reports

M/s. DeLoitte Haskins & SeLLs, Chartered Accountants (ICAI Firm Registration No. 117365W) ["DHS"] and M/s. Mukund M. ChitaLe & Co., Chartered Accountants (ICAI Firm Registration No. 106655W) ["MCC"], the Joint Statutory Auditors of the Company have issued unmodified Audit Reports on the StandaLone and ConsoLidated FinanciaL Statements for the financiaL year ended 31^st March 2024. The report does not contain any quaLification, reservation or adverse remark or discLaimer.

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The Joint Statutory Auditors of the Company have issued unmodified Audit Reports on the Standalone and Consolidated Financial Statements for the financial year ended 31^st March 2024. The report does not contain any qualification, reservation or adverse remark or disclaimer.

The Joint Statutory Auditors hoLd vaLid peer review certificate as prescribed under the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations").

The Joint Statutory Auditors of the Company were present at the last Annual General Meeting ("AGM") held on 28^th JuLy 2023.

Adoption of Policy for Appointment of Statutory Auditors

In compLiance with the Reserve Bank of India GuideLines dated 27^th ApriL 2021 ("RBI GuideLines"), your Company has in pLace a PoLicy for appointment of Statutory Auditors of the Company. The said PoLicy was amended by the Board of Directors to specificaLLy cover independence of auditors and annuaL review of performance of statutory auditors in compLiance with the RBI GuideLines.

Appointment of Joint Statutory Auditors

The current Joint Statutory Auditors have compLeted their tenure of 3 consecutive years with the Company. Consequently, their tenure with the Company wiLL end at the concLusion of the 34^th AGM of the Company to be heLd in JuLy 2024. As per RBI GuideLines, the said audit firms wouLd be in-eLigibLe for re-appointment as Statutory Auditors of the Company for such cooLing period as specified in RBI guideLines. Hence, it is necessary to appoint new set of Joint Statutory Auditors of the Company.

Basis the recommendation of the Audit Committee, the Board of Directors, have approved and recommended the appointment of M/s. M M Nissim & Co LLP, Chartered Accountants (ICAI Firm Registration Number: 107122W/ W100672) and M/s. M P ChitaLe & Co., Chartered Accountants (ICAI Firm Registration Number: 101851W) as the Joint Statutory Auditors of your Company for a term of 3 consecutive years to hoLd office from concLusion of the 34^th AGM upto the concLusion of 37^th AGM to be heLd in the year 2027.

The Joint Statutory Auditors, as proposed, have given a confirmation to the effect that they are eLigibLe to be appointed and not disquaLified from acting as the Statutory Auditors .

Members are requested to consider and approve the appointment of M/s. M M Nissim & Co LLP, Chartered Accountants and M/s. M P ChitaLe & Co., Chartered Accountants, as the Joint Statutory Auditors of your Company . The proposaL is incLuded in the Notice of 34^th AGM of the Company.

Secretarial Auditor and Audit Report

M/s. Makarand M. Joshi & Co., Practicing Company Secretaries were appointed as the SecretariaL Auditor of the Company for conducting the SecretariaL Audit of your Company for FY2023 and FY2024 in accordance with the provisions of Section 204 of the Act read with the ruLes framed thereunder.

In accordance with the provisions of Sub-section (1) of

Section 204 of the Companies Act, 2013, the SecretariaL Audit Report for FY2024 issued by M/s. Makarand M. Joshi & Co., is appended to this Report as “Annexure MI"

M/s. Makarand M. Joshi & Co., was present at the Last AGM of the Company heLd on 28^th JuLy 2023.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer.

Appointment of Secretarial Auditor

The Board of Directors have decided to rotate the SecretariaL Auditors from good governance perspective, and accordingLy appointed M/s. KSR & Co Company Secretaries LLP as the SecretariaL Auditor of the Company for conducting the SecretariaL Audit of the Company for FY2025 and FY2026 in accordance with the provisions of Section 204 of the Act read with the ruLes framed thereunder.

M/s. KSR & Co Company Secretaries LLP is a Company Secretaries firm which has created a niche in Corporate Law practice with expertise in diverse domains akin to a fuLL-service Law firm. They have served reputed cLients across various sectors, having an exceLLent track record in the fieLd of Corporate Laws, Securities Laws, Foreign Exchange Management Laws, InteLLectuaL Property Laws, InsoLvency and Bankruptcy Law, IndustriaL & Labour Laws and EnvironmentaL Laws.

The firm undertakes Board Process Audits, Corporate Governance Audits, SecretariaL Audits, InternaL Audits on functions and activities, Corporate Actions /Transactions based Due DiLigence Audits.

Secretarial Audit of Material Subsidiary

The SecretariaL Audit of Mahindra RuraL Housing Finance Limited ("MRHFL"), a materiaL, debt Listed subsidiary of the Company, for FY2024 was carried out pursuant to Section 204 of the Companies Act, 2013. The SecretariaL Audit Report of MRHFL submitted by M/s. KSR & Co Company Secretaries LLP, does not contain any quaLification, reservation or adverse remark or discLaimer.

There is no materiaL unListed indian subsidiary of the Company as on 31^st March, 2024 and as such the requirement under ReguLation 24A of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("Listing ReguLations") regarding the SecretariaL Audit of materiaL unListed indian subsidiary is not appLicabLe to the Company for the FinanciaL Year 2023-24.

Annual Secretarial Compliance Report with additional confirmations on compliances

In compLiance with ReguLation 24A of Listing ReguLations, your Company has undertaken an audit for FY2024 for aLL the appLicabLe compLiances as per Listing ReguLations, 2015 and circuLars/guideLines issued thereunder.

The AnnuaL SecretariaL CompLiance Report ("ASCR") issued by M/s. Makarand M. Joshi & Co., Company Secretaries, SecretariaL Auditor for FY2024 with additionaL confirmations on compLiances by the Company

with respect to Insider Trading ReguLations, ReLated party Transactions, updation of PoLicies, discLosure of materiaL events to Stock Exchanges etc. as per revised ASCR format prescribed by BSE and NSE, has been fiLed with the Stock Exchanges, and is appended to this Report as “Annexure IV".

The Annual Secretarial Compliance Report does not contain any qualification, reservation or adverse remark.

Cost Records and Cost Audit

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148 of the Companies Act, 2013 are not appLicabLe in respect of the business activities carried out by your Company and hence such accounts and records were not required to be maintained by the Company.

Fraud Reporting

During the year under review, the Joint Statutory Auditors and the SecretariaL Auditor have not reported any instances of frauds committed in the Company by its officers or empLoyees, invoLving amount of Less than 1 crore to the Audit Committee under section 143(12) of the Companies Act, 2013 detaiLs of which need to be mentioned in this Report.

As reported in pubLic domain, during the end of 4^th quarter of the financiaL year ended 31^st March 2024, an incident of fraud was detected by the management at Company's branch at AizawL, Mizoram in respect of retaiL vehicLe Loans disbursed by the Company. The fraud invoLved forgery of KYC documents & asset reLated documents, Leading to embezzLement of Company funds. The fraud was perpetrated in the Branch through coLLusion amongst branch empLoyees, with segregated duties, thus compromising the existing maker-checker controLs. A few vehicLe deaLers and externaL parties (empLoyees of banks / oLd empLoyees of the Company) connived with these empLoyees in this frauduLent activity. Based on the resuLts of the assessment carried out by an accounting firm and further vaLidated by the management, 2887 Loan accounts were identified by the Management as potentiaLLy frauduLent in nature with an aggregate net recoverabLe baLance of ' 135.86 crore. The Company has made 100% provision for this amount, which impacted the profits for the quarter and year ended 31^st March 2024.

The Company has carried out an exhaustive check on aLL Live Loan accounts across its branches and has concLuded that there is no evidence of a simiLar fraud anywhere eLse in the country. As a proactive step, the Company has identified a few key initiatives to further strengthen control, incLuding but not Limited to acceLerating the timeLine for centraLization of document reviews, impLementing digitaL due diLigence tooLs for customer on-boarding and enhanced screening and sampLing of cases by the fraud controL unit, which is set up to seLect sampLe of disbursements across branches to screen the documents invoLved possibiLity for the possibiLity of them being frauduLent.

Further details on the above and related matters can be referred in Note no. 42 to the Standalone financial statements forming part of this AnnuaL report.

The Company is reinforcing its commitment to trust, integrity and transparency through enhanced measures for compliance, risk management, and governance.

Particulars of Contracts or Arrangements with Related Parties

Your Company has in place a robust process for approval of Related Party Transactions and on Dealing with Related Parties.

ALL contracts/arrangements/transactions entered into by the Company during the Financial Year with related parties were in the ordinary course of business and on an arm's length basis.

Omnibus approval of Audit Committee is obtained for Related Party Transactions which are of repetitive nature, which are reviewed on quarterly basis by the Audit Committee as per Regulation 23 of the Listing Regulations and Section 177 of the Companies Act, 2013.

all Related Party Transactions and subsequent material modifications, if any, were placed before the Audit Committee for review and approval. Necessary details for each of the Related Party Transactions as applicable along with the justification are provided to the Audit Committee in terms of the Company's Policy on Materiality of and DeaLing with ReLated Party Transactions and as required under SEBI CircuLar dated 22^nd November 2021.

The Company has not entered into Material Related Party Transactions as per the provisions of the Companies Act, 2013 and a confirmation to this effect as required under Section 134(3)(h) of the Companies Act 2013 is given in form AOC-2 as “Annexure V", which forms part of this AnnuaL Report.

In accordance with the applicable provisions of the Master Direction issued by the Reserve Bank of India and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations"), the 'Policy on Materiality of and Dealing with Related Party Transactions' as updated is avaiLabLe on the Company's website: https:// www.mahindrafinance.com/investor-relations/policy-and-sharehnlder-infnrmatinn#mmfsl-pnlicies

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As per the Whistle Blower Policy implemented by the Company, the Employees, Directors or any Stakeholders associated with the Company are free to report illegal or unethical behaviour, actual or suspected fraud, or violation of the Company's Code(s) of Conduct.

The transactions of the Company with the company belonging to the promoter/promoter group which holds more than 10% shareholding in the Company as required pursuant to para A of schedule V of the Listing Regulations is disclosed separately in the financial statements of the Company. Members of the Company had approved entering into MateriaL ReLated Party transaction with Mahindra & Mahindra Limited, (Promoter/ HoLding Company and a ReLated party) under ReguLation 23 of the Listing Regulations. During the year under review, the aggregate value of the transactions entered with Mahindra & Mahindra Limited did not exceed the materiaLity threshoLd as prescribed under ReguLation 23 of the Listing Regulations. Further details on the transactions with reLated parties are provided in the accompanying financial statements.

Whistle Blower Policy/Vigil Mechanism

Your Company promotes ethicaL behaviour in aLL its business activities and has estabLished a vigiL mechanism for its Directors, Employees, and Stakeholders associated with the Company to report their genuine concerns. The Vigil Mechanism as envisaged in the Companies Act, 2013 and the RuLes prescribed thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is implemented through the Whistle Blower 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 per the WhistLe BLower PoLicy implemented by the Company, the Employees, Directors or any Stakeholders associated with the Company are free to report illegal or unethical behaviour, actual or suspected fraud, or violation of the Company's Code(s) of Conduct or Corporate Governance PoLicies or any improper activity, through the channeLs provided beLow.

The Whistle Blower Policy provides for protected disclosure and protection to the Whistle Blower. Under the Whistle Blower Policy, the confidentiality of those reporting vioLation(s) is protected and they are not subject to any discriminatory practices. The Whistle-blower can make a protected disclosure by using any of the following channels for reporting:

1.    Independent third-party Ethics Helpline Service Portal: https://ethics.mahindra.com

2.    Toll free No: 000 800 100 4175

3.    Chairperson of the Audit Committee

The Whistle Blower Policy has been widely disseminated within the Company. The Policy is available on the website of the Company at the web link: http.s://www. mahindrafinance.com/investor-relations/policy-and-sharehnlder-infnrmatinn#mmfsl-pnlicies

During the year, the Company received 10 whistle bLower compLaints. ALL the cases were investigated and appropriate actions were taken.

The Audit Committee is apprised of the vigil mechanism on a periodic basis. During the year, no person was denied

access to the Chairperson of the Audit Committee. A quarterly report on the whistLe bLower compLaints is placed before the Audit Committee for its review.

Particulars of Employees and Related Disclosures

Details of employees who were in receipt of remuneration of not less than ' 1,02,00,000 during the year ended 31^st March 2024 or not Less than ' 8,50,000 per month during any part of the year, as required under provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be made available during 21 days before the Annual GeneraL Meeting in eLectronic mode to any SharehoLder upon request sent at the EmaiL ID: investorheLpLine [e-mail]. Such detaiLs are aLso avaiLabLe on Company's website and can be accessed at the web-link: https://www.mahindrafinance.com/investor-relations/ financial-information#annual-reports

Disclosures with respect to the remuneration of Directors, Key Managerial PersonneL and EmpLoyees as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules, 2014,isgivenin“AnnexureVI".

Disclosure in respect of remuneration/commission drawn by the Managing Director / Whole-time Director from Holding or Subsidiary Company

Mr. Ramesh Iyer, former Vice-Chairman & Managing Director and Mr. RauL RebeLLo, Managing Director & CEO did not receive any remuneration or commission from Holding/Subsidiaries of the Company during FY2024.

Disclosure Under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act")

Your Company is an equaL opportunity empLoyer and is committed to ensuring that the work environment at aU its locations is conducive to fair, safe and harmonious relations between employees. It strongly beLieves in upholding the dignity of aU its employees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictly prohibited.

Your Company has in pLace a comprehensive PoLicy in accordance with the provisions of POSH Act and Rules made thereunder.

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The Company conducts an online Induction Training through the learning platform M-Drona (Internal Training App) covering topics including POSH awareness, reconciliation before filing POSH complaint(s).

ALL empLoyees (permanent, contractuaL, temporary and trainees) are covered under this Policy. The Policy has been wideLy communicated internaLLy and is pLaced on the Company's intranet portal. The Company ensures that no employee is disadvantaged by way of gender discrimination.

The POSH Policy is available on the website of the Company and can be accessed at the web-link: https:// www.mahindrafinance.com/investor-reLations/poLicy-and-sharehnlder-infnrmatinn#mmfsl-pnlicies.

Your Company has compLied with the provisions reLating to the constitution of the Internal Complaints Committee ("ICC") under the POSH Act to redress compLaints received regarding sexuaL harassment.

To ensure that aLL the employees are sensitized regarding issues of sexual harassment, the Company conducts an onLine Induction Training through the Learning platform M-Drona (Internal Training App) covering topics including POSH awareness, reconciliation before filing POSH complaint(s) and consequences of filing the false compLaint(s).

The following is a summary of Sexual Harassment complaint(s) received and disposed of during the FY2024, pursuant to the POSH Act and Rules framed thereunder:

a)    Number of complaint(s) of Sexual Harassment received during FY 2024 - 1

b)    Number of complaint(s) disposed of during FY2024 - 1

c)    Number of cases pending as of 31^st March 2024- 0

Awareness and Training on POSH

Continuous awareness in this area has been created vide the POSH campaign reiterating Mahindra's commitment to providing a safe workplace to all its employees. During the year, the Company organised sensitisation and awareness programs vide inductions for new joiners, e-learning modules for aU employees, trainees, associates including sending emaiLers, creating standees and posters to sensitise aLL employees to conduct themseLves in a professional manner. Further, virtual and classroom training sessions were conducted by the Company's Ethics Counselors. The Company also organized offline Leadership conversations on gender sensitisation and empLoyee interactive sessions incLuding conscious incLusions.

d)    Number of workshops/awareness programme on the subject carried out during the year under review are as under:

•    Awareness program was conducted in which mailers & video on the Prevention of Sexual Harassment at the workplace along with POSH poLicies was circuLated to aLL empLoyees. POSH training was provided to aLL new joinees as a part of induction module.

•    An online e-learning module for employees on Prevention of Sexual Harassment covering topics on SexuaL Harassment, the process of filing complaints, dealing with Sexual

Harassment, etc. is developed for training. 99.79% of the employees have completed this training.

•    One Training program on ICC was conducted for aLL ICC members.

•    One Training program on POSH sensitization was conducted for the HR team.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014 is attached as “Annexure VII" to the Board's Report.

Policies

The details of the Key Policies adopted by your Company and changes made therein, if any, during the year under review are mentioned at “Annexure VIII" to the Board's Report.

Compliance with the Provisions of Secretarial Standard - 1 and Secretarial Standard - 2

The Directors have devised proper systems to ensure compliance with the provisions of the Secretarial Standards, i.e., SS-1 and SS-2, relating to 'Meetings of the Board of Directors' and 'GeneraL Meetings', respectively, issued by The Institute of Company Secretaries of India ("ICSI") and such systems are adequate and operating effectively.

Voluntary Adherence of Secretarial Standards by all Board Committees

Although, SS-1 compliance is required onLy for Board and its Committees mandatorily required to be constituted under the Companies Act, 2013 ("the Act"), the Company adheres and complies with the good practices enunciated in the said Secretarial Standards for aLL its mandatory and non-mandatory Board level Committees.

Your Company has compLied with appLicabLe SS-1 and SS-2, during the year under review.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations in future

There were no significant and materiaL orders passed by the regulators or courts or tribunals during the year impacting the going concern status of the Company and its future operations.

Disclosure pertaining to Insolvency & Bankruptcy Code

There were neither any appLications fiLed by or against the Company nor any proceedings were pending under the InsoLvency and Bankruptcy Code, 2016 during the year under review.

Disclosure on One-Time Settlement

During the year, the Company has not made any one-time settLement for Loans taken from the Banks or FinanciaL Institutions and hence the detaiLs of difference between amount of the vaLuation done at the time of one-time settLement and the vaLuation done whiLe taking Loan from the Banks or FinanciaL Institutions aLong with the reasons thereof is not appLicabLe.

General Disclosures

The Directors further state that no discLosure or reporting is required in respect of the foLLowing items, as there were no transactions/events related to these items during the financiaL year under review:

•    There was no issue of equity shares with differentiaL rights as to dividend, voting or otherwise;

•    There was no issue of shares (incLuding sweat equity shares) to the empLoyees of the Company under any scheme, save and except EmpLoyee Stock Option schemes referred to in this Report;

•    There was no raising of funds/issue of shares through PreferentiaL ALLotment, PubLic Issue, Rights Issue or QuaLified InstitutionaL PLacement;

•    There was no buy back of the equity shares during the year under review;

•    There were no voting rights which are not directLy exercised by the empLoyees in respect of equity shares for the subscription/purchase for which Loan was given by the Company (as there is no scheme pursuant to which such persons can beneficiaLLy hoLd shares as envisaged under Section 67(3)(c) of the Companies Act, 2013 ("the Act");

•    There was no suspension of trading of securities of the Company on account of corporate action or otherwise;

•    There was no revision made in the FinanciaL Statements or the Board's Report of the Company;

•    The Company being an NBFC, the provisions reLating to Chapter V of the Act, i.e., acceptance of deposit, are not applicable. Disclosures as per NBFC regulations have been made in this Annual Report.

Acknowledgments

The Board conveys its deep gratitude and appreciation to aLL the empLoyees of the Company for their tremendous efforts as weLL as their exempLary dedication and contribution to the Company's performance.

The Directors wouLd aLso Like to thank its sharehoLders, customers, vendors, business partners, bankers, government and aLL other business associates for their continued support to the Company and the Management.

For and on behalf of the Board Dr. Anish Shah

PLace : U.S.A.    Chairman

Date : 4^th May 2024    DIN: 02719429

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Mar 31, 2024

The Directors are pLeased to present their Thirty-Fourth Report together with the audited financial, statements of your Company for the FinanciaL Year ended 31^st March 2024 ("FY2024").

Financial Summary and Operational Highlights

Particulars	Consolidated		% Change	Standalone		% Change
Â	FY2024	FY2023	Â	FY2024	FY2023	Â
Total Income	15,970.32 |	12,832.40	24.45	13,562.42	11,056.09	22.67
Less: Finance Costs	6,959.20	5,094.30	Â	6,426.94	4,576.72	Â
Expenditure	6,204.20	4,695.64	Â	4,551.30	3,539.56	Â
Depreciation, Amortization and Impairment	274.85	225.96	Â	228.71	187.23	Â
Total Expenses	13,438.25	10,015.90	34.17	11,206.95	8,303.51	34.97
Profit before exceptional items and taxes	2,532.07	2,816.50	Â	2,355.47	2,752.58	Â
Share of profit of Associates & Joint Ventures	56.11	43.32	Â	Â
Exceptional items	-	(56.06)	Â	-	(54.51)	Â
Profit Before Tax	2,588.18	2,803.76	(7.69)	2,355.47	2,698.07	(12.70)
Less: Provision For Tax	Â			Â
Current Tax	716.10 |	498.15	Â	664.93 |	486.28	Â
Deferred Tax	(70.97)	234.41	Â	(69.08)	227.47	Â
Profit After Tax for the Year	1,943.05	2,071.20	(6.19)	1,759.62	1,984.32	(11.32)
Less: Profit for the year attributabLe to Non-controlling interests	10.36	(120)	Â	Â
Profit for the Year attributable to owners of the Company	1,932.69	2,072.40	(6.74)	1,759.62	1,984.32	(11.32)
BaLance of profit brought forward from earlier years	7,417.35	6,146.97	Â	6,376.60	5,247.99	Â
Add: Other Comprehensive income /(Loss)	(6.71)	(13.35)	Â	(4.97)	(12.92)	Â
BaLance avaiLabLe for appropriation	9,343.33	8,206.02	Â	8,131.25	7,219.39	Â
Less: Appropriations	Â			Â
Dividend paid on Equity Shares	740.23 |	443.87	Â	741.32 |	444.79	Â
Transfer to Statutory Reserves	352.94	402.86	Â	352.00	398.00	Â
Add/Less: Other Adjustments	Â			Â
Gross obLigation at fair vaLue to acquire Non-controlling interest	-	59.41	Â	-	-	Â
Changes in Group's Interest	114.13	(135)	Â	-	-	Â
BaLance carried forward to baLance sheet	8,364.29	7,417.35	Â	7,037.93	6,376.60	Â
Net worth	19,933.25	18,560.09	7.40	18,157.49	17,088.91	6.25

Consolidated Performance Highlights

•    Total. Income increased by 24.45% to ' 15,970.32 crore for FY2024 as compared to ' 12,832.40 crore in FY2023.

•    Profit Before Tax ("PBT") decreased by 7.69% to ' 2,588.18 crore for FY2024 as compared to ' 2,803.76 crore in FY2023.

•    Profit After Tax ("PAT") (Net of non-controLLing interest) decreased by 6.74% to ' 1,932.69 crore for FY2024 as compared to ' 2,072.40 crore in FY2023.

Standalone Performance Highlights

•    During the year under review, the Company has disbursed Loans of ' 56,208.22 crore as against ' 49,541.38 crore during the previous year, an increase of 13.46% over the same period in previous year.

•    Total. Income increased by 22.67% to ' 13,562.42 crore for the year ended 31^st March 2024 as compared to ' 11,056.09 crore for the previous year.

•    PBT decreased by 12.70% to ' 2,355.47 crore as compared to ' 2,698.07 crore for the previous year.

•    PAT decreased by 11.32 % to ' 1,759.62 crore as compared to ' 1,984.32 crore in the previous year.

•    The Assets Under Management ("AUM") stood at ' 1,02,596.77 crore as at 31^st March 2024 as against ' 82,769.87 crore as at 31^st March 2023.

Gross Stage 3 improved due to focused collection initiatives and macro tailwinds. The Gross Stage 3 Loan assets stood at ' 3,490.90 crore, Lower than that on 31^st March 2023 (' 3,717.10 crore). The Gross Stage 3 percentage to Business Assets decLined from 4.49% as at 31^st March 2023 to 3.40% as at 31^st March 2024.

Material changes from the end of the financial year till the date of this report

No material changes and commitments have occurred after the cLosure of the FinanciaL Year 2023-24 tiLL the date of this Report, which wouLd affect the financiaL position of your Company.

ECL and other updates

The Company has been updating the Expected Credit Loss modeL ("ECL") with the Latest set of data inputs on reasonable periodic intervals to capture the expected significant changes in macro-economic growth prospects and shifts in market drivers and changes in risk profiLe of customer credit exposures. During the current year the Company has updated its ECL modeL by incLuding muLti-factor macro-economic variabLes and product cLassification of Loan portfoLio for its retaiL vehicLe Loans and used industry LeveL benchmark aLLowance rate for its reLativeLy new portfoLio under Leasing business, which has been recommended by the Audit Committee and approved by Board of Directors. The Company hoLds provision towards expected credit Loss on Loans as at 31 March 2024 aggregating to ' 3,401.59 crore (as at 31 March 2023: ' 3,287.83 crore).

The Company's net Stage-3 assets ratio stood at 1.28% as at 31^st March 2024 as against 1.87% as at 31^st March 2023.

Transfer to Reserves

The Company has transferred an amount of ' 352 crore to the Statutory Reserves, in compliance with section 45-IC of the Reserve Bank of India ("RBI") Act, 1934. Further, the Board of your Company has decided not to transfer any amount to the GeneraL Reserve for the year under review. An amount of ' 7,037.93 crore is proposed to be retained in the Profit and Loss Account of the Company.

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Considering good performance and strong cash flows, your Directors are pleased to recommend a dividend of ' 6.30 per equity share (315%) on the face value of ' 2 each, for FY2024 vis-avis 300% dividend in FY2023.

The Company maintains sufficient Liquidity buffer to fuLfiL its obLigations arising out of issue of debentures. The Company being an NBFC, is exempt from transferring any amount to debenture redemption reserve in respect of privateLy pLaced or pubLic issue of debentures, as per the provisions of section 71 of the Companies Act, 2013 read with RuLe 18 of the Companies (Share CapitaL and Debentures) RuLes, 2014. In respect of secured Listed non-convertibLe debt securities, the Company maintains 100% security cover or higher security cover as per the terms of Information Memorandum, GeneraL Information Document ("GID"), Key Information Document ("KID"), as the case may be and/or Debenture Trust Deed, sufficient to discharge the LiabiLity towards principaL amount and interest thereon.

Dividend

Considering good performance and strong cash flows, your Directors are pLeased to recommend a dividend of ' 6.30 per equity share (315%) on the face vaLue of ' 2 each, for FY2024 vis-a-vis 300% dividend in FY2023. Dividend is subject to approvaL of the Members at the ensuing AnnuaL GeneraL Meeting. The dividend outgo for FY2024 wiLL absorb a sum of ' 778.38 crore, which constitutes 44.2% pay out of Company's StandaLone Profits for FY2024.

The Company has not paid any Interim Dividend during the financiaL year under review.

The dividend recommended is in accordance with the Company's Dividend Distribution Policy, within the ceiling and in compLiance with the framework prescribed in RBI guideLines on DecLaration of Dividend by NBFCs.

Tax on Dividend

In terms of the provisions of the Income-tax Act, 1961, the Company wiLL make payment of dividend after deduction of tax at source ("TDS") as per the prescribed rates, to those sharehoLders whose names appear as beneficiaL owner/ member in the List of beneficiaL owners to be furnished by NationaL Securities Depository Limited/ CentraL Depository Services (India) Limited in case of shares heLd in demateriaLised form, or in the Register of Members in case of shares heLd in physicaL form, as at the cLose of business hours on 16^th JuLy 2024 (Book CLosure).

Unclaimed dividend transferred to Investor Education and Protection Fund

In terms of the provisions of Sections 124 and 125 of the Companies Act, 2013 ("the Act") read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) RuLes, 2016, during the year under review, the Company has transferred an amount of ' 7,87,140 being the uncLaimed dividend for FY2016 to the Investor Education and Protection Fund ("IEPF"). The detaiLs of totaL amount(s) Lying in unpaid dividend account of the Company for Last seven years and due to be transferred to IEPF, is mentioned in the Report on Corporate Governance, forming part of this AnnuaL Report.

Dividend Distribution Policy

In compLiance with the provisions of ReguLation 43A of the SEBI (Listing ObLigations and Disclosure Requirements) ReguLations, 2015, the Company has formuLated Dividend Distribution PoLicy, setting out criteria and circumstances to be considered by the Board whiLe recommending dividend to the sharehoLders. The Dividend Distribution PoLicy provides for eLigibiLity criteria, aspects to be considered by the Board whiLe recommending dividend, ceiLing on dividend payout ratio etc. in accordance with the Reserve Bank of India guideLines on decLaration of dividend dated 24^th June 2021.

As set out in Dividend Distribution PoLicy, the Company's dividend payout is determined based on avaiLabLe financiaL resources, investment requirements and optimaL sharehoLder return. Within these parameters, the Company endeavours to maintain a totaL dividend pay-out ratio in the range of 20% to 30% of the annuaL standaLone Profit after Tax ("PAT") of the Company.

The Dividend Distribution PoLicy is appended as “Annexure I" and forms part of this AnnuaL Report.

The Dividend Distribution PoLicy can aLso be accessed on the Company's website at the web-Link: https://www. mahindrafinance.com/investor-reLations/poLicy-and-sharehoLder-information#mmfsL-poLicies

Operations

Your Company's main Line of business is financing of automobiLes and tractors for customers who use them mainLy for earning their LiveLihood and for their personaL mobiLity. It aLso focusses on other businesses Like pre-owned car Loans, SME financing, insurance broking (through its subsidiary, Mahindra Insurance Brokers Limited), mutuaL fund distribution (through its JV, Mahindra ManuLife Investment Management Private Limited), fixed deposits etc. AdditionaLLy, your Company is aLso foraying into other areas Like Leasing, consumer finance and Loan against property. By offering a wide range of easy and affordabLe products and services taiLored to fit their

cashflow cycLes, your Company continues to be a vitaL financier to its customers in semi-urban and ruraL areas. Your Company has retained its Leadership position in financing the Mahindra range of vehicLes and tractors. AdditionaLLy, your Company is expanding its connect with other Leading Car OriginaL Equipment Manufacturers ("OEMs").

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Your Company has retained its leadership position in financing the Mahindra range of vehicles and tractors. Additionally, your Company is expanding its connect with other leading Car Original Equipment Manufacturers ("OEMs").

Building Blocks for Growth, Efficiency, Customer

Experience

A.    Deeper Physical Reach

Your Company has an extensive PAN-India distribution network with 1,370 offices/branches spanning across 27 States and 7 Union Territories as on 31^st March 2024. Due to its extensive office network, your Company is Less dependent on any one region in the Country. AdditionaLLy, some regionaL, cLimatic, and cycLicaL dangers, such as heavy monsoons or droughts, are Lessened by geographic diversification. The vast office network of the Company enabLes each office to organicaLLy buiLd its business and use its cLient connections by providing financiaL products Like vehicLe financing, pre-owned car Loans, SME financing, insurance broking, mutuaL fund distribution, fixed deposits etc. There are guardraiLs defined centraLLy to ensure asset quaLity standards. Your Company beLieves that its efficient office network in ruraL and semi-urban areas has afforded an opportunity to meet the financiaL needs of the peopLe of India by identifying and comprehending their needs and aspirations.

B.    Enhancing Digital Reach

Ever evoLving technoLogy enabLed your Company to extend digitaL footprints across the geographies and customer segments. Your Company's focus on mobiLe technoLogy has made mobiLe app a cruciaL channeL for various aspects of customer service, fostering brand LoyaLty, customer retention, acquire new customers and revenue generation.

The 'MF Customer APP' which is avaiLabLe in 11 Languages (incLuding 9 Indian regionaL Languages), enabLes customers to appLy for vehicLe Loans, access and manage their Loan accounts, create E-mandate, make EMI payments using a variety of payment methods, incLuding debit cards, net banking, UPI and QR code. In the fiscaL year 2024, app users increased by 40%, reaching 8.7 Lakh users, and coLLections from the app doubLed.

To empower empLoyees, customers, and stakehoLders, your Company offers robust digitaL alternatives through a redesigned unified app for customer acquisition, underwriting, and coLLection processes. Embracing the shift from conducting business digitaLLy to becoming digitaLLy Led businesses is now an integraL part of your organizationaL strategy.

C.    Leveraging Technology

Your Company's digitaL initiatives extend across different segments and products, incLuding auto Loans, pre-owned car Loans, Leasing, and SMEs.

Your Company has roLLed out Lead management app which heLp saLes team to quaLify incoming Leads, anaLyse, nurture them and convert into new business opportunities. It aLso creates better experience for potentiaL customers.

The rollout of 'QR code' based offer at dealership heLps deaLers and saLes team of automotive verticaL to pitch right offers from your Company to the customers on an aLmost reLative basis.

The introduction of 'OneApp' has equipped on-field employees with decision-making capabilities through digitaL intervention, enhancing coLLection efficiency and transforming business digitaLLy. The 'Used Car Digi Loans' initiative, in coLLaboration with industry Leading brands, offers customers personaLized Loan offers from your Company, expediting purchasing decisions and improving customer satisfaction.

Your Company prioritizes enhancing core operations by adopting cLoud-based Loan origination systems, utiLizing advanced API pLatforms for scaLabLe transactions. DigitaLisation has streamLined Loan processing whiLe stiLL maintaining strict checks. Leveraging data sciences and artificiaL inteLLigence, your Company utiLises business inteLLigence dashboards and machine Learning modeLs for strategic initiatives in lending, retention, and business expansion.

As part of endeavour to communicate with customers across a variety of digitaL pLatforms, your Company has set up an end-to-end hyper personaLised marketing tech pLatform.

Your Company has started several digital interventions spanning across a! employee categories (fieLd force, support staff, office, remote staff, work from home empLoyees), across aLL geographic regions, as a part of ongoing effort to improve empLoyee experience.

In terms of risk management, your Company aLigns processes with ISO 27001:2013 and COSO framework to minimize risks. Your Company reguLarLy assesses risk, which invoLves impLementing new technoLogy, keeping track of it and having externaL/internaL speciaLists audit the same. By impLementing manuaL and automated technoLogies, the risks discovered during the assessment are suitabLy managed by mitigating, minimising, or transferring the risks. In accordance with the government's pLanned data privacy initiatives, the Company is adopting data privacy practices.

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Your Company's strategic priority is to deliver a sustainable profitable growth characterised by continued growth of 15-20% Assets Under Management and a stable asset quality (Gross Stage-3 assets < 4.5%).

D.    Data as Competitive Advantage

Your Company's 25+ years of rich experience in ruraL and semi-urban markets gives it an edge whiLe using anaLytics and artificiaL inteLLigence. Your Company has introduced its own aLgorithms to provide Low-risk customers with quicker Loan approvaLs at variabLe interest rates, which wiLL aid in growing market share, enhancing portfoLio quaLity and boosting profitabiLity. The integrated activation of DigitaL, AnaLytics and TechnoLogy wiLL significantLy improve customer acquisition, retention, cross-seLLing and coLLections. Through the strategic utiLization of data and artificiaL inteLLigence, your Company is eLevating the reaLm of customer experience, crafting bespoke financiaL soLutions and offers taiLored to the individuaL needs of our customers, thereby fostering growth and enhancing LiveLihoods. Your Company's steadfast commitment to driving operationaL exceLLence is exempLified through the automation of underwriting decisions using machine learning, a move that is heLping the Company both augment productivity as weLL as fortify profitabiLity. By Leveraging advanced data science, your Company has buiLt capabiLity to proactiveLy identify and mitigate risks within the portfoLio, ensuring resiLience in the face of evoLving market dynamics. Your Company's dedication to innovation is underscored by substantial investments in Data and AI technoLogies, propeLLing our franchise towards future readiness and cementing our status as a formidabLe force within the competitive Landscape.

E.    Growth Drivers for Future

The Company's vision is to be "A leading and responsible financial solutions partner of choice for emerging India."

Our vision signifies our commitment to service our customers in emerging India in a responsible manner and simuLtaneousLy achieve profitabLe growth. It further estabLishes our commitment to be a provider of comprehensive financiaL soLutions, beyond Lending. The phrase "partner of choice" hoLds significance as it reflects our dedication to prioritising digitaL initiatives, enhancing customer experience and expanding our range of products.

The strategic priority is to deLiver a sustainabLe profitabLe growth characterised by continued growth of 15-20% in Assets Under Management ("AUM") and a stable asset quality (Gross Stage-3 assets < 4.5%).

Your Company is concentrating on developing its core products and expanding into new growth areas. Financing of Pre-owned cars, used tractors and commerciaL vehicLes have a Lot of head room to grow within the vehicLe segments whiLe increasing market share for its existing range of products.

With an aim to provide comprehensive range of financiaL soLutions under one roof, your Company has entered into strategic tie-ups during the year under review viz. co-Lending arrangement with State Bank of India and Lendingkart and partnership agreement with Bank of Baroda for co-sourcing of car Loan Leads. These arrangements provide wider outreach, better interest rates and credit to the unserved segments of the society. Your Company wiLL keep on further refining its risk poLicy norms and underwriting to ensure that asset quaLity continues to stay top-cLass.

Other Developments

•    Buy out of stake in Mahindra Insurance Brokers Limited

Mahindra Insurance Brokers Limited ("MIBL"), subsidiary of the Company, is engaged in the business of direct and reinsurance broking.

Pursuant to the approvaL received from Insurance ReguLatory and DeveLopment Authority of India ("IRDAI"), your Company has acquired 20,61,856 equity shares of ' 10 each of MIBL (20% stake), at an aggregate price of ' 206.39 crore. Consequent to this MIBL became a whoLLy owned subsidiary of the Company with effect from 22^nd September 2023.

•    Corporate Insurance Agency

Your Company proposes to carry on the supplemental business activity of soLiciting/ procuring insurance business by becoming a Corporate Agent and providing speciaLized insurance soLutions in the areas of Life insurance, heaLth insurance and generaL insurance-both group and individuaL (Corporate Agent-Composite) in the geographies that the Company operates in, subject to approvaL of IRDAI.

The sharehoLders of the Company vide speciaL resoLution passed through postaL baLLot on 19^th January 2024 approved amendment to the Memorandum of Association ("MOA") of the Company to enabLe the Company to carry on insurance business inter-aLia as a Corporate Agent and undertake aLL incidentaL activities.

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Your Company proposes to carry on the supplemental business activity of soliciting/ procuring insurance business by becoming a Corporate Agent and providing specialized insurance solutions in the areas of life insurance, health insurance and general insurance-both group and individual.

The corporate agency License wouLd heLp in broadening your Company's product portfoLio by incorporating insurance solutions. It would help customers with their financiaL and insurance needs being met by a singLe entity. The process wouLd augment the Company's existing sources of revenue and profits as it depLoys its common infrastructure of branch network and feet on street. As on the date of the report, your Company has made an appLication to IRDAI, seeking approvaL for registering itseLf as Corporate Agent.

Strategic Tie-ups / Partnerships

Co-lending partnership with State Bank of India

Your Company entered into strategic co-lending partnership with State Bank of India ("SBI"), India's pioneer bank. This coLLaboration is a step forward in enhancing financiaL accessibiLity and incLusivity.

Company's strong ruraL distribution network and expertise in the financiaL sector and SBI's competitive capitaL cost, provides customers with a competitive advantage and joint financiaL support thereby enabLing credit to the unserved segments of the economy at an affordabLe cost. Under the said partnership, your Company faciLitates Leads and manages Loan servicing whiLe serving as a singLe point of contact for prospective customers.

Co-lending partnership with Lendingkart

Your Company has entered into Co-lending partnership with Lendingkart, a pioneer in financiaL services. This colending partnership provides business loans to the SmaLL & Medium Enterprise ("SME") sector, thereby fostering financiaL incLusion for smaLL and medium enterprises and enabLing diversification of Company's product portfoLio.

Co-sourcing partnership with Bank of Baroda

Your Company has entered into partnership agreement for co-sourcing of car Loan Leads. Under this tie-up, your Company generates new and pre-owned car Loan Leads for Bank of Baroda through its widespread fieLd and branch distribution channeLs, compLemented by Bank of Baroda's wide network across the country for Loan processing. The said arrangement aims at providing comprehensive range of financiaL soLutions under one roof and enabLing credit access to a wide spectrum of customers across Locations.

Change in Nature of Business

There has been no change in the nature of business and operations of the Company during the year under review.

RBI Compliances

Reserve Bank of India ("RBI") has notified ScaLe Based regulations ("SBR") on 22^nd October 2021. Your Company has been categorised as an NBFC-Upper Layer vide press reLease dated 30^th September 2022, issued by RBI. Your Company has aLways endeavored to maintain the highest standards of compLiance within the organisation and shaLL

The Company had outstanding borrowings (excLuding securitisation and TREPS) of ' 85,097.72 crore as on 31^st March 2024, breakup of which is given as under:

 

Particulars	Fixed Deposits	Bank Loans (TL/ OD/CC/ WCDL)	NonConvertible Securities (Privately placed & Public NCD)	Subordinate Debt (Privately placed & Public NCD)	Commercial Paper	ICD	External Commercial Borrowings	Total
Amount in crore (?)	7,174.74	44,859.83	21,843.82	4,005.66	4,882.12	229.50	2,102.05	85,097.72
% to outstanding borrowings (excLuding securitisation and TREPS)	8.43	52.72	25.67	4.71	5.74	0.27	2.46	100.00

Figures are as per reported Ina as financiaL statements.

 

continue to do so going ahead. The Company continues to comply with aLL the appLicabLe Laws, regulations, guidelines etc. prescribed by the RBI, from time to time incLuding the norms pertaining to capital adequacy, non-performing assets etc. Your Company's asset LiabiLity management is reviewed on quarterly basis by a focused Board level committee viz. Asset LiabiLity Committee. Your Company's liquidity coverage ratio ("LCR") was 313% as on 31^st March 2024 against the mandatory requirement of 85%.

Your Company has adopted aLL the mandatory appLicabLe poLicies under SBR Like Large Exposure PoLicy, InternaL CapitaL Adequacy Assessment PoLicy (ICAAP), CompLiance PoLicy etc.

Compliance Risk Assessment Framework and Compliance Testing program (“CRAFT”)

Your Company has put in pLace CompLiance Risk Assessment Framework and CompLiance Testing program in compLiance with RBI circuLar dated 11^th April 2022.

Business Continuity Policy

In order to have robust framework & process for Business continuity, your Company has implemented Business Continuity PoLicy ("BCP") which inter-aLia incLudes identification, monitoring, reporting, responding and managing the risks incLuding mitigating risks of a significant / proLonged business disruption in order to protect the interests of the Company's customers, empLoyees and stakehoLders.

Your Company continues to invest in taLent, systems and processes to further strengthen the controL, compLiance, risk management and governance standards in the organisation.

Internal Ombudsman

Your Company has appointed an InternaL Ombudsman ("IO") in compLiance with the RBI CircuLar dated 15^th November 2021. A Report of number of compLaints escaLated to IO and status of disposaL of such compLaints during the period under review is being pLaced before the Board for its review in compLiance with the said RBI circuLar.

Finance

During the year under review, Reserve Bank of India ("RBI") focused on withdrawaL of accommodation to ensure that inflation progressively aLigns with the target, whiLe supporting growth. AccordingLy RBI has maintained the REPO Rate at 6.50% during FY2024. Liquidity conditions remained tight throughout the year with the banking sector Liquidity remaining LargeLy negative during the FY2024.

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Your Company has been categorised as an NBFC-Upper Layer and continues to comply with all the applicable Laws, regulations, guidelines etc. prescribed by the RBI.

Inflation in India has remained beLow 6% (RBI upper toLerance Limit) throughout the year. Consumer Price Index ("CPI") inflation was 4.85% in March 2024. GLobaLLy, inflation showed a downward trajectory and seems to be moderating paving the way for a growth revivaL. However, this comes with a caution as successive shocks Like the Russian-Ukraine war, IsraeL-Hamas-Iran conflict, gLobaL uncertainty are stiLL weighing on the economy and macro financiaL stabiLity incLuding financiaL sector stress. The rupee has remained stabLe against the US doLLar throughout the year in the range of ' 82/$ to ' 83/$.

The 2 Year and 10 Year G Sec curve have remained around 7.05% and 7.15% respectiveLy throughout the financiaL year. During the year Interest cost on borrowed funds remained eLevated for the Company i.e., 7.69% (interest cost to average borrowing).

During the year under review, your Company continued with its diverse methods of sourcing funds incLuding borrowing through Secured and Unsecured Debentures, Term Loans, ExternaL CommerciaL Borrowings, Securitisation, Fixed Deposits, CommerciaL Papers, Inter Corporate Deposit etc. and maintained prudentiaL Asset LiabiLity match throughout the year. Your Company sourced Long-term debentures and Loans from banks and other institutions at attractive rates. Your Company continues to expand its borrowing profiLe by tapping new Lenders and geographies.

Securitisation

During the year, your Company successfuLLy compLeted three securitisation transactions aggregating to ' 2,929 crore.

Non-Convertible Debentures

During the year under review, your Company raised an aggregate of ' 6,572.86 Crore (' 8650 Crore being the face vaLue) through issuance of Non-ConvertibLe debentures on private pLacement basis as mentioned hereunder:

1.    ' 5,865.14 crore, raised though issuance of Secured RedeemabLe Non-ConvertibLe Debentures ("NCDs").

2.    ' 705.62 crore raised through issuance of Unsecured RedeemabLe Non-ConvertibLe Subordinated Debentures eLigibLe for Tier II CapitaL.

3.    ' 2.1 crore raised through issuance of PartLy paid-up NCDs.

As specified in the respective offer documents, the funds raised from issuance of NCDs were utiLised for various financing activities, onward Lending, repaying the existing indebtedness, working capitaL and for generaL corporate purposes of the Company. DetaiLs of the end-use of funds were furnished to the Audit Committee on a quarterLy basis. The NCDs are Listed on the debt market segment of BSE Limited.

During the year, your Company has redeemed NCDs worth ' 3,969.70 crore and subordinated debt worth ' 127.80 crore on private pLacement basis.

Your Company is in compLiance with the appLicabLe guideLines issued by the RBI and Securities and Exchange Board of India in this regard.

There has been no defauLt in making payments of principaL and interest on aLL the NCDs issued by the Company on a private pLacement basis and through pubLic issue. Further, there was no deviation/variation in use of proceeds raised from the objects stated in the offer document. As on 31^st March 2024, there was no unpaid/uncLaimed interest on NCDs issued on a private pLacement basis. With respect to the three pubLic issuances of NCDs made by the Company, aggregate PrincipaL payment of ' 10,93,000/-and Interest of ' 31,02,515/- was uncLaimed by the investors as on 31^st March 2024.

Credit Rating

Your Company enjoys highest rating for its Long term and short term borrowing programmes from aLL the credit rating agencies that it works with. Your Company has been rated by CRISIL Ratings Limited ("CRISIL") & India Ratings and Research Private Limited ("India Ratings") for its NonConvertibLe Debentures program, CommerciaL Paper, Banking FaciLities & Fixed Deposits. Further, CARE Ratings Limited ("CARE") and Brickwork Ratings India Pvt. Ltd. ("BWR") has rated your Company for the Non-ConvertibLe Debentures program. These rating agencies have reaffirmed the highest credit rating for your Company's short term & Long term borrowing instruments. Your Company beLieves that its credit ratings and strong brand equity enabLes it to borrow funds at competitive rates. The detaiLs of ratings are given in the Corporate Governance Report, forming part of this AnnuaL Report.

Capital Adequacy

As on 31^st March 2024, the CapitaL to Risk Assets Ratio ("CRAR") of your Company was 18.86% which is weLL above the minimum requirement of 15% CRAR prescribed by the Reserve Bank of India.

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Your Company enjoys highest rating for its long-term and short-term borrowing programmes from all the credit rating agencies that it works with.

Commercial Paper

As at 31^st March 2024, the Company had CommerciaL Paper ("CPs") with an outstanding amount (face vaLue) of ' 4,975 crore. CPs constituted approximateLy 5.4% of the outstanding borrowings as at 31^st March 2024. The CPs of the Company are Listed on the debt market segment of the NationaL Stock Exchange of India Limited.

Borrowings

In order to expand the business of the Company and to cater the enhanced budgeted disbursements, the Board of Directors of the Company have subject to the approvaL of the sharehoLders of the Company, approved increase in the overaLL borrowing Limit from ' 1,10,000 crore to ' 1,30,000 crore.

Out of the above, Tier I capitaL adequacy ratio stood at 16.39% and Tier II capitaL adequacy ratio stood at 2.47% respectiveLy.

Share Capital

The issued, subscribed and paid-up Equity Share CapitaL as on 31^st March 2024 was ' 247.1 crore, consisting of 123,55,29,920 Equity Shares of the face vaLue of ' 2 each, fuLLy paid-up.

There was no change in the issued, subscribed and paid-up share capitaL during the year under review.

As on 31^st March 2024, none of the Directors of the Company hoLd instruments convertibLe into equity shares of the Company. DetaiLs of RSUs granted to Executive Directors are given the Corporate Governance Report forming part of this AnnuaL Report.

Economy

Global Economy

FinanciaL year 2024 witnessed demand regardLess of tightening financiaL conditions, simmering geo-poLiticaL risks and adverse weather patterns. For instance, the US FederaL Reserve increased poLicy rates to the highest LeveL in over two decades, but eLevated government spending supported tight Labour market conditions and hence robust retaiL demand. Hot wars near the BLack Sea, the Red Sea and the Gaza strip pushed up trading costs, however this came against a backdrop of Low

input cost pressures brought about by improving supply chain conditions and expectations of weak gLobaL growth. FinaLLy EL Nino conditions Led to deficient rains hampering agricultural output. In this midst, aggressive output curbs announced by Organization of the PetroLeum Exporting Countries (OPEC) pushed up crude oil prices close to USD 100/bbL during the year; fortunately, higher supply from America brought temporary respite to fueL costs. As a result of countervailing factors, demand momentum and consumer sentiment were stronger than expected resuLting in centraL banks tightening financing conditions even further and pushing poLicy rate cut expectations deeper into financial year 2025.

Domestic Economy

In India, El Nino conditions disrupted agricultural output, however, lower input costs and higher construction activity supported ruraL income growth. The main growth push came from rising services' exports, Leveraged consumption by wealthier households and public sector infrastructure spending. This has resulted in over 8% growth in the Last three quarters of caLendar year 2023. FuLL financial year 2024 growth is at 7.2%. Apart from improving consumer sentiment, the economy is benefiting from revivaL in corporate sector project announcements which augurs weLL for job generation and near 7% growth in financiaL year 2025. The RBI has kept poLicy rates on hoLd after raising them by 250 bps in the current cycLe, instead the regulator engaged in macro-prudential tightening by raising risk weights for unsecured personaL Loans and bank Lending to NBFCs. WhiLe the RBI presentLy maintains its stance of withdrawing accommodation, space to cut poLicy rates by 50 bps to 6% in financiaL year 2025 couLd emerge if headLine inflation eases towards 4% on good monsoons.

Management Discussion and Analysis

In accordance with the appLicabLe provisions of the Master Direction issued by the Reserve Bank of India and the SEBI (Listing Obligations and Disclosure Requirements) ReguLations, 2015, a detaiLed anaLysis of the Company's performance is discussed in the Management Discussion and AnaLysis Report, which forms part of this AnnuaL Report.

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Your Company voluntarily observes a 'Silent / Quiet period' starting from 1^st day of the start of the month after the end of the quarter for which the financial results are to be announced till the time of announcement of said results. During this period, no meetings with investors/ analysts/funds are held to discuss unpublished financial performance of the Company to ensure protection of the Company's UPSI.

Corporate Governance

Your Company practices a culture that is built on core values and ethical governance practices. Your Company is committed to integrity and transparency in all its dealings and places high emphasis on business ethics. The Board of your Company exercises its fiduciary responsibiLities in the widest sense of term and endeavours to enhance Long-term sharehoLder vaLue. The Governance framework is anchored by the cLearLy defined poLicies and procedures covering areas such anti-bribery and anticorruption, Prevention of SexuaL Harassment at WorkpLace and Whistle Blower Policy. Company's disclosure regime is aimed at achieving best practices, globally.

A Report on Corporate Governance aLong with a Certificate from M/s. Makarand M. Joshi & Co., SecretariaL Auditors, certifying compLiance with the conditions of Corporate Governance forms part of this AnnuaL Report.

Ethics Framework

The Ethics & Governance framework is anchored by cLearLy defined poLicies and procedures, covering areas such as Anti-Bribery and Anti-Corruption Policy ("ABAC"), PoLicy on Gifts & Entertainment ("G&E"), PoLicy on Prevention of SexuaL Harassment at WorkpLace ("POSH"), Whistle-Blower Policy ("WB") to ensure robust Corporate Governance.

The Code of Conduct and aLL the Company's poLicies are accessibLe on the Company's website; in the Governance section at the web-Link: https://www.mahindrafinance. co m/investor-re lations/poli cy-and-shareh old er-infnrmatinn#mmfsl-pnlirie.s

During the year, ABAC, POSH and WB policies were revised to aLign for ease of comprehension and to aLign with internal and external environment. It enables the Company to make the right choices and demonstrate the highest standards of integrity and ethicaL behaviour.

The Code of Conduct Committee and the Audit Committee ensures that the Ethics & Governance framework is executed effectiveLy and the decisions on substantiated cases are taken in a fair, just and consistent manner across business.

Investor Relations

During the current year, your Company has met multiple investors and analysts-both domestic and international. These sessions were undertaken through a mix of one-on-one or group meetings. Your Company also participated in muLtipLe domestic conferences organised by reputed broking houses, in addition to accessing overseas investors through Non-Deal Roadshows ("NDRs"). Having meetings in virtuaL format (through conference caLLs and video conferencing) enabLed accessing a Larger investor base.

Your Company holds quarterly and annual earnings calls through structured conference caLLs and/or webLinks, detaiLs of which are made avaiLabLe to pubLic through the Company's website and stock exchange(s).

During these meetings/ earnings calls, the interactions are based on generaLLy avaiLabLe information accessibLe to the public in a non-discriminatory manner. No unpublishec price-sensitive information is shared during such meetings Your Company believes in transparent communication and have been voLuntariLy discLosing criticaL information regarding Company's performance through monthLy updates.

Silent period

As a good governance practice, your Company voluntarily observes a 'SiLent / Quiet period' starting from 1^st day of the start of the month after the end of the quarter for which the financiaL resuLts are to be announced tiLL the time of announcement of said resuLts. During this period no meetings with investors/anaLysts/funds are heLd tc discuss unpubLished financiaL performance of the Company to ensure protection of the Company's UnpubLished Price Sensitive Information ("UPSI").

Consolidated Financial Statements

The ConsoLidated FinanciaL Statements of your Company its subsidiaries, associate/joint venture for FY2024 prepared in accordance with the reLevant provisions of the Companies Act, 2013 ("the Act") and appLicabLe Indian Accounting Standards along with all relevant documents and the Auditors' Report form part of this AnnuaL Report

Pursuant to the provisions of Section 136 of the Act, the StandaLone and ConsoLidated FinanciaL Statements of the Company, aLong with reLevant documents and financiaL statement of each of the subsidiaries of the Company are avaiLabLe on the website of the Company and can be accessed at the web-Link: https://wwwmahindrafinance c.nm/inve.stnr-relatinn.s/financ.ial-infnrmatinn#financ.ial-results

Subsidiaries, Joint Venture(s) and Associate(s)

A report on the performance and financiaL position of each of the Company's subsidiaries, associate/ joint venture is included in the Consolidated Financial Statements and the saLient features of their financiaL statements and their contribution to overaLL performance of the Company as required under Section 129(3) of the Companies Act 2013 ("the Act") read with RuLe 8(1) of The Companies (Accounts) RuLes, 2014, is provided in Form AOC-1 annexed as ‘Annexure A' to the Consolidated Financial Statements and forms part of this AnnuaL Report.

Material Subsidiary

ReguLation 16 of the SEBI (Listing ObLigations anc DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations") defines a "materiaL subsidiary" to mean a subsidiary, whose income or net worth exceeds ten percent of the consoLidated income or net worth respectiveLy, of the Listed entity and its subsidiaries in the immediately preceding accounting year.

Accordingly, Mahindra Rural Housing Finance Limited was a materiaL, debt Listed subsidiary, of your Company for the financiaL year ended 31^st March 2024.

Operational and performance highlights of the Company's Subsidiary/Joint venture Companies for FY2024 are given hereunder:

Mahindra Rural Housing Finance Limited

Mahindra Rural Housing Finance Limited ("MRHFL"), the Company's subsidiary, engaged in the business of providing Loans for purchase, renovation and construction of houses to individuaLs in the Low and middLe income category of the country, registered a totaL income of ' 1,294.44 crore as compared to ' 1,349.80 crore for the previous year, decLine of 4.10% over previous financiaL year. Profit Before Tax was 81.59% Lower at ' 4.84 crore as compared to ' 26.29 crore for the previous year. Profit After Tax was 83.45% Lower at ' 3.60 crore as compared to ' 21.75 crore in the previous year.

During the year under review, MRHFL disbursed loans aggregating to ' 2,071 crore serving more than 28,000 households as against ' 1,969 crore in the previous year. MRHFL is expanding its footprint in affordabLe housing.

Mahindra Insurance Brokers Limited

Mahindra Insurance Brokers Limited ("MIBL"), whoLLy owned subsidiary of the Company (effective 22^nd September 2023) is engaged in the business of Direct and Reinsurance Broking.

During the year under review, there was growth of 13% in Gross Premium faciLitated for the Corporate and RetaiL business Lines, increasing from ' 4,036.80 crore in FY2023 to ' 4,555.86 crore in FY2024. The TotaL Income increased by 157% from ' 426.51 crore in FY2023 to ' 1,094.95 crore in the FY2024. The Profit Before Tax increased by 264% from ' 46.05 crore to ' 167.50 crore and the Profit After Tax increased by 259% from ' 34.44 crore to ' 123.52 crore during the same period.

Mahindra Manulife Investment Management Private Limited

Mahindra ManuLife Investment Management Private Limited ("MMIMPL") acts as an Investment Manager for the schemes of Mahindra ManuLife MutuaL Fund ("MutuaL Fund"). As on 31^st March 2024, MMIMPL was acting as the investment manager to 22 schemes of the MutuaL Fund. The average Assets Under Management in these 22 schemes were ' 19,659 crore as on 31^st March 2024 as compared to ' 9,691 crore as on 31^st March 2023, deLivering a growth of 103% in assets. Of these assets, ' 17,613 crore were in equity and hybrid schemes in March 2024, as compared to ' 8,294 crore in March 2023, a growth of 112%. MMIMPL has empaneLed 28,406 distributors and now has 9,12,891 investor accounts in these 22 schemes.

During the year under review, the totaL income of MMIMPL was ' 63.54 crore as compared to ' 44.12 crore for the previous year. The operations for the year under consideration have resuLted in a Loss of ' 27.27 crore as against a Loss of ' 30.86 crore during the previous year.

Mahindra Manulife Trustee Private Limited

Mahindra ManuLife Trustee Private Limited ("MMTPL") acts as the Trustee to Mahindra ManuLife MutuaL Fund ("MutuaL Fund").

During the year, MMTPL earned trusteeship fees of ' 107.03 Lakhs and other income of ' 10.29 Lakhs as compared to ' 73.76 lakhs and ' 7.28 lakhs, respectively, for the previous year. MMTPL recorded a profit of ' 59.72 lakhs for the year under review as compared to profit of ' 16.06 lakhs in the previous year.

Mahindra Ideal Finance Limited (Sri Lanka)

Your Company holds a 58.2% stake in Mahindra Ideal Finance Limited (Sri Lanka) {"MIFL"} with a total investment of ' 77.97 crore. Leveraging Mahindra Finance's expertise of over 28 years in the financiaL services sector and the LocaL management's expertise of the domestic market. MIFL is poised to buiLd a Leading financiaL services business in Sri Lanka.

With improving economic and business environment in Sri Lanka, MIFL witnessed significant rebound in its business. MIFL restarted its vehicle leasing disbursements albeit with caution, strict credit standards, and asset safeguards in pLace. GoLd Loan disbursements aLso surged during H2 FY2024. Year-round coLLection efficiency was above 100%. By 31^st March 2024, Company's GS-3 LeveL dropped to 5.25%, which is industry leading in the context of the Sri Lankan market.

MIFL's totaL income for the FY2024 was SriLankan rupee ("LKR") 2,309 miLLion vs. LKR 1,924 miLLion for FY2023. Profit Before Tax was 35% higher at LKR 334 miLLion as compared to LKR 248 miLLion for the previous year. Profit After Tax was 19% higher at LKR 103 miLLion as compared to LKR 87 miLLion in the previous year. MIFL continued investments in order to grow its business and enhance the customer experience and reach. During the course of the financiaL year, MIFL's branch network across the island country grew to 32 branches.

Mahindra Finance CSR Foundation

Mahindra Finance CSR Foundation was incorporated on 2^nd ApriL 2019 as a whoLLy owned subsidiary of the Company registered under Section 8 of the Act, to promote and support CSR projects and activities of the Company and its group Companies.

The foundation has obtained Registration under Section 12AA and Section 80G of the Income Tax Act, 1961 and CSR Registration Number.

Joint Venture/Associate

Mahindra Finance USA LLC [“MFUSA"]

MFUSA's retaiL and deaLer disbursement registered an increase of 4.40% to USD 917.58 miLLion for the year ended 31^st March 2024 as compared to USD 877.18 miLLion for the previous year.

TotaL Income increased by 25.54% to USD 77.84 miLLion for the year ended 31^st March 2024 as compared to USD 62.01 miLLion for the previous year. Profit before tax was 15.49% higher at USD 22.86 miLLion as compared to USD 19.80 miLLion for the previous year. Profit after tax increased by 14.64% to USD 17.21 miLLion as compared to USD 15.01 miLLion in the previous year.

Changes in Subsidiaries, Joint Venture or Associate Companies during the year

During the year under review, your Company acquired 20% stake in Mahindra Insurance Brokers Limited ("MIBL"), heLd by IncLusion Resources Private Limited for an aggregate consideration of ' 206.39 crore, consequent to which it became a whoLLy owned subsidiary of the Company with effect from 22^nd September 2023.

Except as mentioned above, there were no changes in the Company's Subsidiaries, Joint Venture/Associate Companies.

Fixed Deposits and Loans/Advances

Your Company offers a wide range of Fixed Deposit schemes that cater to the investment needs of various cLasses of investors. These Deposits carry attractive interest rates with superior service enabLed by robust processes and technoLogy. In order to tap ruraL and semiurban savings, your Company continues to expand its network and make its presence feLt in the most remote areas of the country.

During the year, CRISIL has reaffirmed a rating of 'CRISIL AAA/StabLe' for your Company's Fixed Deposits. AdditionaLLy, Company's Fixed Deposit program aLso has AAA rating from India Ratings. This rating indicates that the degree of safety regarding timeLy payment of interest and principal is very strong. Your Company's Deposits continue to be a preferred investment avenue amongst the investors.

As on 31^st March 2024, your Company has mobiLised funds from Fixed Deposits to the tune of ' 7,197.20 crore, with an investor base of over 95,979 investors.

Your Company continues to serve the investors by introducing severaL customer centric measures on an ongoing basis to further strengthen its processes in sync with the requirements of the Fixed Deposit ("FD") hoLders. Your Company periodicaLLy sends various intimations via SMS, e-maiLs, post, courier etc., to its investors as weLL as sends reminder emaiLs to cLients whose TDS is LikeLy to be deducted before any pay-out/accruaL. Your Company aLso provides a digitaL pLatform for onLine appLication/ renewaL of deposits, onLine generation of TDS certificates from customer/ broker portaL and seamLess investment process for its empLoyees.

Your Company has roLLed out severaL initiatives aimed at offering a superior experience to fixed deposit hoLders. Some key ones incLude:

•    An integrated web portal has been developed to faciLitate onLine appLication/ onLine renewaL of Fixed Deposits, Loan against FDs, profiLe updates etc. which can be accessed at https://wwwmahindrafinance. com/investment/fixed-deposit

•    OnLine submission of Forms 15G/15H by aLL eLigibLe Depositors through the FD Customer portal is made available on the Company's website.

•    TDS certificate(s) are made avaiLabLe on the

Customer portaL and Broker portaL, in addition to the same being sent to the concerned Depositors, from time to time.

•    In order to offer various payment options to Depositors, more payment gateways have been added across various FD investment portals.

•    An advanced version of Customer ReLationship Management ("CRM") has been launched to record the queries, requests and compLaints for future data anaLysis in order to enhance customer service. An integrated service portaL (E-Sarathi) has been introduced to address the queries of Depositors routed through the ChanneL Partners on reaL-time basis during working hours.

•    The process of recording of CentraL Know Your Customer ("CKYC") detaiLs of the Depositors has been strengthened by introducing various controL measures.

•    Separate categorisation of VIP customers to address the queries with a dedicated ReLationship Manager is introduced.

•    AdditionaL 448 Branches have been enroLLed for accepting and servicing FD hoLders.

•    An automated customer service feedback process has been introduced to have better understanding of the customer expectations.

•    Communication channeLs for transactionaL and non-transactionaL activities reLated to fixed Deposits have been strengthened to ensure deposit hoLder is informed and updated on reaL time basis.

There has been no defauLt in repayment of deposits or payment of interest during the year.

Your Company being a Non-Banking FinanciaL Company the discLosures required as per RuLe 8(5)(v) and (vi) of the Companies (Accounts) RuLes, 2014 read with Sections 73 and 74 of the Companies Act, 2013, are not appLicabLe to the Company.

The information pursuant to CLause 35(1) of Master Direction    DNBR.PD.002/03.10.119/2016-17    dated

25^th August 2016 issued by the Reserve Bank of India on Non-Banking FinanciaL Companies Acceptance of PubLic Deposits (Reserve Bank) Directions, 2016 ("NBFC ReguLations"), regarding unpaid/uncLaimed pubLic deposits as on 31^st March 2024, is furnished beLow:

i.    TotaL number of accounts of PubLic Deposits of the Company which have not been cLaimed by the depositors after the date on which the deposit became due for repayment: 4,217.

ii.    TotaL amounts due under such accounts remaining uncLaimed beyond the dates referred to in cLause (i) as aforesaid: ' 4.36 crore.

Initiatives taken to reduce the unclaimed amounts pertaining to Fixed Deposits:

i) Penny drop testing one month prior to maturity and interest pay out process is being conducted to reduce rejection cases.

ii)    Deposit hoLders are being reached out via SMS/ CaLLs/ EmaiL/PhysicaL Letters, as appLicabLe incLuding sending communication in vernacuLar Language for quick understanding by the customers.

iii)    In case of death of depositors, cLaim settLement process is advised to joint depositors/nominee/ LegaL heir, as the case may be.

iv)    UncLaimed FDs are being vaLidated with the depositor's Loan account with the Company, if any.

v)    In case the cheque is undeLivered, the Company deposits the amount in the bank account of the customer, after necessary confirmations.

Transfer of Unclaimed amounts pertaining to Fixed Deposits to IEPF:

Pursuant to Section 125 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) RuLes, 2016 ("the IEPF RuLes") as amended from time to time, matured deposits remaining uncLaimed for a period of seven years from the date they became due for payment are required to be transferred to the Investor Education and Protection Fund ("IEPF") estabLished by the CentraL Government. Further, interest accrued on the deposits which remain uncLaimed for a period of seven years from the date of payment are aLso required to be transferred to the IEPF under Section 125(2)(k).

During the year, the Company has transferred to the IEPF an amount of ' 0.16 crore being the uncLaimed amount of matured fixed deposits and ' 0.05 crore towards uncLaimed/ unpaid interest accrued on the deposits. The concerned depositor can cLaim the deposit and/or interest from the IEPF by foLLowing the procedure Laid down in the IEPF RuLes.

Loans and Advances

During the year under review, the Company has not given any Loans and advances in the nature of Loans to its subsidiaries or associate or to firms/companies in which Directors are interested.

AccordingLy, the discLosure of particuLars of Loans/ advances, etc., as required to be furnished in the AnnuaL Accounts of the Company pursuant to ReguLation 34[3] and 53[f] read with paragraph A of ScheduLe V of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 is not appLicabLe to the Company.

Particulars of Loans, Guarantees or Investments in Securities

Your Company, being an NBFC registered with RBI and engaged in the business of giving Loans in ordinary course of its business, is exempt from compLying with the provisions of Section 186 of the Companies Act, 2013 ("the Act") with respect to Loans.

Pursuant to the provisions of Section 186(4) of the Act, detaiLs with regard to the investments made by the Company, as appLicabLe, are given in Note no. 52 (iv) of the StandaLone financiaL statements, forming part of this AnnuaL Report.

Achievements

Awards/Recognitions received by your Company during the year are enumerated hereunder:

Business

•    Awarded the CRIF Data Excellence Award in the Commercial (NBFC) category.

CSR

•    Received speciaL commendation for CSR FLagship Program 'Swabhimaan' at The CSR Journal Excellence Awards 2023 under the category of 'Education & SkiLL Training'.

•    Honoured with the Rotary CSR Award for 'Distinguished Service in Community Development' for Company's CSR initiative 'Swabhimaan'.

•    Won the award for Best FinanciaL IncLusion Initiative for Company's FinanciaL & DigitaL Literacy CSR Initiative at the DNA Awards 2023 presented during Banking Frontiers NBFC's Tomorrow Conclave.

Sustainability

•    GLobaLLy ranked 45^th by Futures Cape amongst top 100 Indian companies for SustainabiLity & CSR under Responsible Business 2020 by Futures Cape.

•    IncLuded in Dow Jones SustainabiLity Index (DJSI) -OnLy Company in India in Diversified and FinanciaL sector to be incLuded in the DJSI SustainabiLity Yearbook 2021 and having a score of 50 percentiLe in previous year.

•    Became the first Indian Company in the "Banks, Diverse FinanciaLs, and Insurance" sector to have science-based targets vaLidated by the Science based target initiative ("SBTi").

Human Resources

•    Recognised as one of 'India's 100 Best Companies to Work For' by Great PLace To Work India.

•    Recognised as India's Best WorkpLace for MiLLenniaLs by Great PLace To Work India-2024.

•    Awarded IAC 2024 Award for 'Pioneering Work in

ScuLpting TaLent for Tomorrow' in Private Sector at the Industry Academia Conference-2024.

•    Recognised as 'Best NBFC in TaLent & Workforce' by Business Today.

Marketing

•    Won the 'Best DigitaL Initiatives' award at ASSOCHAM 18^th AnnuaL Summit & Awards on Banking & FinanciaL Sector Lending Companies.

•    Won the 'Best Product/Service Innovation' award at ASSOCHAM 18^th AnnuaL Summit & Awards on Banking & FinanciaL Sector Lending Companies.

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Your Company became the first Indiar Company in the "Barks, Diverse FinanciaLs and Insurance" sector to have science-based targets vaLidated by the SBTi.

Employee Stock Option Scheme - 2010 and Restricted Stock Unit Plan - 2023

With a view to continue the practice of rewarding performance of the empLoyees, creating ownership cuLture and to retain, motivate and attract taLent in Light of growing business and to aLign interests of sharehoLders with that of empLoyees, with the approvaL of Members at AnnuaL GeneraL Meeting ("AGM") heLd on 28^th JuLy 2023, your Company has formuLated a Restricted Stock Unit PLan nameLy 'Mahindra and Mahindra FinanciaL Services Limited-Restricted Stock Unit PLan 2023' ("MMFSL RSU PLan-2023"), contempLating grant of59,44,320 Restricted Stock Units ("RSUs") exercisabLe into equivaLent equity shares, constituting 0.48% of the paid-up share capitaL of the Company as on 31^st March 2024.

During the year under review, your Company granted 2,83,171 Restricted Stock Units (RSU's) to the eLigibLe empLoyees under MMFSL- RSU PLan 2023. No options were granted to the eLigibLe empLoyees under the Mahindra & Mahindra FinanciaL Services Limited EmpLoyees' Stock Option Scheme-2010 ("2010 Scheme").

The Company does not have any scheme to fund its empLoyees to purchase the shares of the Company.

The 2010 Scheme and the MMFSL RSU PLan-2023 of the Company is in compLiance with the Securities and Exchange Board of India (Share Based EmpLoyee Benefits and Sweat Equity) ReguLations, 2021 ("SBEBSE ReguLations") and there were no amendments to the aforesaid Scheme and PLan during FY2024. A Certificate from M/s. Makarand M. Joshi & Co., SecretariaL Auditor of the Company for FY2024, certifying that the Company's above-mentioned Scheme and PLan have been impLemented in accordance with the SBEBSE ReguLations and the resoLution passed by the Members, wouLd be made avaiLabLe for inspection by the Members through eLectronic mode at the AnnuaL GeneraL Meeting ("AGM") scheduLed to be heLd on 23^rd JuLy 2024.

The appLicabLe discLosures as stipuLated under SBEBSE ReguLations for the year ended 31^st March 2024, with regards to the 2010 Scheme, MMFSL RSU PLan 2023 and Company's stock option trust is upLoaded on the Company's website and can be accessed at the web-Link: https://www.mahindrafinance.cnm/investnr-relatinns/ financial-infnrmatinn#annual-repnrts

Sustainability Initiatives

Guided by our parent Company Mahindra Group's motto "Rise for Good" your Company has undertaken meaningfuL initiatives to make sustainabiLity as an integraL part of operations and ethos. SustainabiLity has been a part of organization's phiLosophy since its estabLishment. At Mahindra Finance, sustainabiLity is imbibed in its business phiLosophy and is seen as part of its intrinsic DNA.

Your Company has aLigned its performance with the three piLLars of the Mahindra Group SustainabiLity Framework for Long-term vaLue creation. The aLignment with materiaL topics of the framework aLLows us to remain consistent with

our parent organization's vision and strategy. In Line with our sustainabiLity strategy, we have taken a precautionary approach to avoid negative impacts on the environment.

Your Company's approach and accompLishments on SustainabiLity echoes its mission of transforming peopLe Lives and contributing to peopLe, pLanet and profit.

Your Company and its subsidiaries have been enabLing customers to meet their aspirations through a diversified portfoLio of financiaL product offerings. Mahindra RuraL Housing Finance Limited heLps peopLe buiLd their homes through affordabLe housing finance soLutions. Mahindra Insurance Brokers Limited secures their Life and assets with insurance soLutions and Mahindra ManuLife Investment Management Private Limited offers investment options through its asset management soLutions. Your Company Lays strong emphasis on customer centricity with a customer base spread across different viLLages in India, with majority of them beLonging to the 'Earn and Pay' segment.

Your Company continued to focus on integrating SustainabiLity into its business practices across vaLued stakehoLders through key initiatives. Your Company was recognised for its sustainabiLity initiatives with the accoLades as stated in Achievements section.

Business Responsibility and Sustainability Report

In compLiance with ReguLation 34(2)(f) of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015, as appLicabLe, your Company's Business ResponsibiLity and SustainabiLity Report for the year ended 31^st March 2024, forms part of this AnnuaL Report.

The Board of Directors have adopted a poLicy viz. 'Business ResponsibiLity and SustainabiLity Reporting PoLicy' ("BRSR PoLicy"), which inter-aLia, incorporates sustainabiLity eLements and aLigns the PoLicy with NationaL GuideLines on ResponsibLe Business Conduct ("NGRBC").

Business Responsibility and Sustainability-Training and Initiatives

Keeping in mind our responsibiLity throughout our vaLue chain to ensure sustainabLe practices, we expanded the Business ResponsibiLity and SustainabiLity Reporting ("BRSR") training for our vaLue chain partners, by emphasizing on the best practices and case studies of its 9 principLes based on NGRBC. The participative and coLLaborative approach towards the stakehoLders provides a visibiLity of Environment SociaL and Governance ("ESG") practices across the vaLue chain and enabLes the Company to execute its sustainabiLity strategy.

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Your Company's approach and accompLishments on SustainabiLity echoes its mission of transforming Lives of peopLe and contributing to peopLe, planet and profit.

"Making Sustainability Personal” Initiatives

We at Mahindra finance beLieve in making SustainabiLity PersonaL. In view of this, 100% of our empLoyees were provided training on BRSR and Human Rights issues.

Initiatives Like "Green DiwaLi", "I Am ResponsibLe" activities were impLemented to promote ESG cuLture and sustainabLe consumption practices amongst empLoyees. We beLieve this wiLL enabLe sustainabLe behaviouraL changes & knowLedge deveLopment as a core vaLue of the Company.

Other Key Initiatives

This year your Company took significant initiatives on deveLoping robust road map to address Carbon and Water neutraLity. Your Company made proactive efforts to reduce CO₂ emissions (carbon footprint) through Project "Mahindra HariyaLi" by pLanting 3,97,900+ sapLings throughout the country.

ALso keeping in mind the energy security, your Company has instaLLed energy efficient technoLogy Like 5-star inverter AC's, LED, and BLDC fans to reduce our energy consumption as weLL as reducing carbon footprint.

Given the nature of the business, your Company made a significant step towards adopting digitaL pLatforms which not onLy brings in increased efficiency in our operation but aLso ensures significant reduction in consumption of paper.

As a service sector, the major waste contributor is paper and E waste. Promoting a circuLar economy strategy for its disposaL, your Company Launched a zero waste to LandfiLL project thereby ensuring to send paper waste to paper miLLs for recycLing purpose onLy through authorized vendors and in exchange receiving wheat straw-based copier paper for further consumption. This initiative ensures reduction in our dependabiLity of virgin resources and promotion of circuLar economy and sustainabLe consumption in business.

In addition to this, your Company aLso initiated responsibLe E waste management by authorized deaLers to recycLe the E waste. Your Company's incLusive sustainabLe business modeL is future ready and weLL equipped to enabLe its stakehoLder's progress.

Some of the Company's ESG initiatives incorporated that faLL under the SociaL (S) category, specificaLLy focusing on the S1: Labour Practices & Decent Work subcategory:

•    EmpLoyee HeaLth and Safety: Your Company prioritizes empLoyee weLLbeing by impLementing safety procedures and advisories, conducting training programs Like Mock Fire DriLLs, Defensive Driving and First Aid, EstabLishing an Emergency Response Team.

•    Diversity and IncLusion: The Women Safety Ambassador program promotes safety awareness specificaLLy for femaLe empLoyees, fostering a more incLusive safety cuLture. These initiatives demonstrate your Company's commitment in creating a safe and heaLthy work environment for its empLoyees, aLigning with the sociaL aspects of ESG reporting.

•    EmpLoyee DeveLopment: Your Company offers the "Nurturing Leaders" program to enhance

Leadership capabilities and buiLd a strong taLent pipeLine. This program contributes to a skiLLed and engaged workforce (S1 (GRI CATEGORY 400):    Labour Practices & Decent Work).

Your Company understands that it is essentiaL to safeguard its employees from illness, injuries, emergencies, health and safety hazards as well as any other wellbeing issues. Initiatives like Spectrum 2023, podcast series, Live Webcasts etc., are implemented at the executive and strategic levels to highlight our top leadership team's involvement in promoting diversity, inclusion, and unbiased practices. Our brand pillar "Rise for a More Equal World," which focuses on fostering a sense of inclusion and belonging in the Mahindra Financial Services sector, sought to deepen understanding of inclusion, break down unconscious bias, and dismantle stereotypes, resulting in a culture in which everyone feels valued, respected, and empowered to deliver business results.

Various trainings were provided to employees such as

1.    Unconscious Bias Training : Workshops for senior leadership and mid-level management to identify and address unconscious biases in decision-making.

2.    Spectrum-Inclusion Week : A week-long celebration of inclusion with learning activities, employee contests, and sociaL media engagement.

3.    Perspective Building Sessions : Senior leaders share their personaL journeys and approaches to D&I, emphasizing its importance to name a few.

Women play an important role in our success story and are encouraged to take on leadership positions. Recognizing the particular obstacles and untapped potential of women in leadership roles, your Company has created "She is on the Rise," a uniquely customized program meant to empower our female managers and push their success.

For the wellbeing of employee's, platforms such as the Alyve application, and the Employee Engagement Platform have been launched. The Alyve application has facilitated health as well as Eye Check-ups for 3000+ employees PAN India along with hosting mental wellness workshops.

Through the employee engagement platform, peer to peer appreciation and interaction were fostered through hobby club activities like book reading, photography etc.

Stakeholder engagement: Including employees and management in the training process fosters a sense of ownership and improves effectiveness. Your Company engages with its key stakeholders at regular intervals through implementation partners' meet, vendor meets, vehicle dealers meet, customer meets etc.

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Your Company Lays strong emphasis on customer centricity with a customer base spread across different villages in India, with majority of them belonging to the 'Earn and Pay' segment.

Equal Opportunity & Diversity: The Company's equal opportunity for persons with disabilities demonstrates a focus on fair treatment in the workplace (S1.1 Discrimination).

Women Employee Resource Group

•    Mahindra World of Women (MWOW): Events and workshops for women employees to network, share experiences, and develop leadership skills are conducted.

•    She is on the Rise: A program designed to empower women managers and address the challenges they face in leadership roles.

•    Policies for Women Employees: These address work-life balance challenges, including menstrual wellness leave, childcare support, maternity transition support and IVF reimbursement.

•    Prarambh Program: To empower women in Financial Services, your Company's Prarambh program is a strategic partnership with Manipal Academy of BFSI to address the gender gap in the financial services sector. This initiative provides a specialized training program exclusively for women candidates, equipping them with the skills necessary for successful careers at your Company. The Program empowers women and creates a more diverse talent pool, bringing valuable perspectives and skillsets like empathy and communication to the financial sector.

Governance (G) Category:

Corporate Governance:

Anti-Corruption Policy: The existence of an anti-bribery and anti-corruption policy demonstrates a commitment to ethical business practices (G4.5 Corruption).

Through the inclusive business model, your Company endeavours to cater to the bottom of the pyramid in the rural and semi-urban areas, enabling them to earn their livelihood through varied financial products and services. Through a wide network of branches, we are promoting local employment and building strong lasting relationships with our stakeholders.

Your Company has always been conscious of its role as a responsible corporate citizen and is building an inclusive organisation by empowering all the stakeholders and facilitating their contribution towards growth that is both holistic and long term. Through its wide network of branches with locaLy recruited employees, strong and lasting relationships with its stakeholders, large customer base, vast experience and market knowledge, your Company is providing financial resources to underserviced regions of the country.

Integrated Reporting

Your Company i s pleased to present i ts holistic performance for FY2024, in the Integrated Report of the Company. This

report includes details such as the organisation's strategy, governance framework, performance and prospects of value creation based on the six capitals-Financial, Manufactured, Intellectual, Human, Social & Relationship and Natural capital.

Corporate Social Responsibility (CSR)

With a vision to transform rural and semi-urban India into a self-reliant, flourishing landscape, your Company started its journey in 1991 and has grown into a leading NBFC with an employee base of around 26,662 employees all over India. By working with around 28 implementing partners in the areas of Education & Livelihood, Healthcare and Environment, your Company strives to become an asset in the communities where it operates. Your Company's Corporate Social Responsibility (CSR) initiatives are aligned with the Company's purpose to drive positive change in the lives of our communities and aligned with national priorities.

1. CSR Committee

Your Company has duly constituted a CSR Committee in accordance with Section 135 of the Companies Act, 2013 to assist the Board and the Company in fulfilling the corporate social responsibility objectives of the Company. The Committee presently comprises of the following Directors:

Name	Category
Mr. Dhananjay Mungale	Independent Director
(Chairperson)	Â
Ms. Rama Bijapurkar	Independent Director
Mr. Raul Rebello	Managing Director & CEO

*Mr. Ramesh Iyer ceased to be member of the Committee upon superannuation with effect from 29^th April 2024. Mr. Raul Rebello was inducted as the member of the Committee with effect from 30^th April 2024.

During the year under review, 3 (three) CSR Committee Meetings were held, details of which are provided in the Corporate Governance Report. The CSR Committee inter-alia, reviews and monitors the CSR as well as BRSR activities. The terms of reference of the CSR Committee were enhanced to inter-alia include formulation of BRSR Policies as against Business Responsibility Policies, undertake periodic assessment of BRSR activities.

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With a vision to transform rural and semiurban India into a self-reliant, flourishing landscape, your Company started its journey in 1991 and has grown into a leading NBFC with an employee base of around 26,662 employees all over India.

2.    CSR Policy

The CSR Policy approved by the Board encompasses the approach and guidance given by the Board taking into account the recommendations of the CSR Committee, including principles for management of the CSR Project(s)/Program(s) and formulation of the Annual Action Plan.

During the year under review, the CSR Policy of the Company was amended to inter-alia, align it with CSR Rules and broad base CSR mission statement.

The CSR Policy has been hosted on the website of the Company at: https://www.mahindrafinance. cnm/investnr-relatinns/pnlicy-and-sharehnlder-infnrmatinn#mmfsl-pnlir.ie.s

3.    CSR Initiatives

i.    ‘Swabhimaan'- CSR Flagship Program

Your Company had launched CSR flagship program for Drivers Community in FY2021 (Project "Swabhimaan" or "Self- Respect"), which is aimed at upliflment of drivers and their family members.

In FY2024, to further solidify its commitment towards the well-being of the driver communities, your Company successfully implemented its flagship program- 'Swabhimaan. This multiyear program's focus has been to address the professional, financial, and familial challenges faced by the drivers and their families and further contribute to their overall well-being. In FY2024, we reached out to over 19,100+ beneficiaries across India. Through the Swabhimaan program, your Company provided 4-wheeler vehicle driving training to 960+ youth, E/Auto Rickshaw Training to 300+ women from underprivilege families, road safety training to 15,590+ existing drivers and awarded scholarships to 2,270+ children of drivers. Through above interventions, your Company impacted lives of 2,000+ women beneficiaries.

ii.    Financial & Digital Literacy Awareness Program

Your Company launched two pilot projects on Financial & Digital Literacy Awareness Program. The objective of the first project for MSME was to provide financial & digital Literacy, business skills training for Nano and Micro-enterprises like people working at Kirana Store, Job Work, Retail Shops, Restaurants. The objective of another project for GiG workers was imparting financial planning skills to individuals such as farmers, drivers, self-employed from low-income community to achieve better savings, awareness of financial instruments, safeguard from digital frauds with basic details about vehicle maintenance.

Under this program, we conducted minimum 40 hours training for 39,210+ final year female students in classrooms across government/ government aided colleges, polytechnics industrial training    institutions, employer

premises etc. to enhance their employability prospects. The modular MPC training program focusses on life, language and aptitude skills To facilitate students who have been trained in the MPC are placed with organizations working in their core trade/ domain an innovative, tech-enabled job drive, known as 'Job Utsav' is conducted to bring together the best employers and a great talent pool trained under the MPC program.

v.    Mahindra Pride Skill centers (MPSC)

You Company continued its support to MPSC which are specifically designed to economically empower women through training in domain and employability skills. The major focus are / ITES, retail, hospitality, BFSI and other sectors By addressing the unique requirements of the job market and emphasising the development of both technical and soft skills, the model aims to equip women with the knowledge, skills and confidence needed to succeed in their careers As part of this initiative, 1,000 women were trained under IT / ITES, retail, hospitality, TaUy IT&GST and 80% of the trained women were supported in securing a gainful employment.

vi.    Project Hariyali

The Project Hariyali is a continuation of the Hariyali programme started in 2010 in Araku This program focuses on natural resource management and global regenerative organic farming protocols as a means to increasing a community's income and improving its agricultural eco-system for an overall wellbeing of the community. In FY2024, your Company planted 3,45,900+ saplings of coffee fruit, legume and forest species in the Araku region jointly with local communities.

vii.    Water Conservation Project

As part of the Environmental Sustainability, your Company constructed 4 Rainwater Harvesting Structures in the ZP Schools / Adivasi Padas of Shahapur and 7 Farm Ponds on the farmer's lands in village Kheware, Murbad, Thane Maharashtra along with protective fencing to the ponds, solar panels in farm pond and solar pumps. This project is expected to conserve 4,80,00,000 liters of rainwater for irrigation which will ensure accessibility of water round the year for household and farming purpose and enable farmers to take 2/3 crops. This project is expected to support 2,450 beneficiaries from the rural areas of Maharashtra.

 

Through above projects, your Company created awareness amongst 26,200+ individuals from semi urban & urban areas. During the training, we encouraged 4,900+ individual to downLoad Digi Locker app in their respective cell phone which helps them to build backup and instantly access important documents like Aadhar, PAN, driving licenses, vehicle registration certificates, academic marksheets etc.

iii.    Nanhi Kali

Reaffirming its commitment to the cause of education, your Company continued its support to the Project Nanhi Kali which has benefitted over 5,880+ underprivileged girl children from socially and economically marginalised families living in urban, rural, and tribal parts of India.

With the aim of helping girls complete schooling, Project Nanhi Kali provides girls (from Class 1-10) with comprehensive support including two hours of daily after-school remedial classes at Nanhi Kali Academic Support Centres. To further enhance the quality of education imparted to the girls, Project Nanhi Kali has partnered with a leading EdTech organisation, Educational Initiatives. The girls also receive an annual school supplies kit comprising a school bag, stationery and feminine hygiene material, enabling them to attend school with dignity.

Further, to accelerate bridging the digital gender gap in India, and to promote gender equality and empowerment of girls through education and training programmes, Nanhi Kali's Digital Equalizer for Girls Training Programme was introduced for underprivileged girls enrolled in Classes 9-12. In FY2024, your Company trained 14,543 girls as part of this innovative initiative.

iv.    Mahindra Pride Classroom (MPC)

Your Company continued Mahindra Pride Classroom to reach out to marginalised and socially excluded women to create job opportunities in various sectors and enable women to become financially independent and participate actively in the workforce.

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Through the Swabhimaan program, your Company provided 4-wheeLer vehicle driving training to 960+ youth, E/Auto Rickshaw Training to 300+ women from underprivilege families, road safety training to 15,590+ existing drivers and awarded scholarships to 2,270+ children of drivers.

viii.    Project Sehat

In the area of healthcare, your Company organised nationwide blood donation drives in which 3,900+ Blood Units were collected, Pan India. Your Company also conducted 8 health camps benefitting 1,630 individuals.

ix.    Project Hunnar: Skill development for Persons with Disabilities

Your Company continued its support to Persons with Disabilities by training 250+ beneficiaries under 'Hunnar' program in various skills in Banking and Financial Services and Insurance ("BFSI"), hospitality and Information Technology Enabled Services ("ITES") sectors to enhance their employability.

Employees Volunteering

Your Company has always encouraged the employees to participate in various CSR initiatives to drive positive changes amongst the community. During the reporting period, 22,500+ employees (85%) contributed 1,22,700+ person hours in various virtual and CSR Calendar initiatives undertaken by the Company like blood donation, tree plantation, Swachh Bharat, visit to municipal school, visit to Orphanages, Old age Homes & centres for Differently Abled to reaffirm its pledge to the society. Through employees volunteering, planted ~52,000 saplings to increase green cover near our branches.

Apart from the key thrust areas, your Company contributed funds for other causes such as preservation and promotion of the fine arts and culture, welfare of the armed forces and supporting underprivileged community.

In FY2024, your Company conducted "CSR Implementation Partner's Meet" on 7^th Feb 2024with the participation of 12 implementation partners. Such stakeholder engagement presents the opportunity to foster collaborations, interact with the senior management, networking and sharing of best practices amongst varied implementation partners. During the meet, your Company honoured three of its partners (NGO) as "Best CSR implementation Partners 2023" and rest with Token of appreciation. It also organized capacity building workshop on "Data driven impact measurement" for its implementation partners.

4. CSR Spend

As per the provisions of Section 135 of the Companies Act, 2013 ("the Act") read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules"), the mandatory CSR spend of the Company for FY2024 was ' 29.96 crore, against which your Company has spent ' 25.27 crore during the year and an amount of ' 4.71 crore has been transferred to MMFSL Unspent CSR Account 2024, (the Company has transferred an unspent amount of ' 4.71 crore vis-a-vis ' 4.69 crore) which shaU be spent within prescribed timelines towards ongoing program on Financial & Digital Literacy Awareness.

Further, in terms of the CSR Rules, Chief Financial Officer has certified that the funds disbursed have been utilised for the purpose and in the manner approved by the Board for FY2024.

5.    Annual Report on CSR Activities

The Annual Report on the CSR activities undertaken by your Company during the year under review, as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is set out in “Annexure II" of this Report.

6.    Impact Assessment of CSR Projects

In compliance with the rule 8(3) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, executive summary and web links of impact assessment reports with respect to Company's CSR projects which meet the prescribed criteria, will be provided once the same are completed. Your Company has engaged independent agencies to carry out the impact assessment for the aforesaid projects.

Cyber Security

To secure the Company's digital transformation efforts, your Company has ensured that it has complete visibility of all digital assets-on-premises, in the cloud, and across IoT devices and remote networks. Processes have been defined and implemented to ensure as the advances in the journey of digital transformation our technology infrastructure also transforms to identify and mitigate the emerging risks.

Your Company has also embarked on the journey to align itself with the data privacy related legal and regulatory guidelines covering collection, storage and usage of sensitive data. The Company has implemented threat monitors such as Web Application FirewaH (WAF), Data Loss Prevention, Web Content Filtering, Endpoint Detection & Response (EDR), Threat Intel Services etc. followed by protection of data through encryption, masking (transit and rest) etc. which helps in detecting/ blocking the intrusions and attempts of data breach.

The Company also imparts periodical cyber and data privacy related trainings to staff including to Board Members which helps them to recognize common tricks that malicious actors use to infiltrate systems thus, securing the human link as well.

During the year under review a cyber incident had occurred, details of which are given in note no. 43 to the Standalone financial statements forming part of this Annual report. The Company was able to build back the applications from the immutable backups. The core systems remained unimpacted and peripheral systems were restored soon after.

Your Company has implemented a robust risk management and governance framework supported by policies, processes, threat intel services, tools, technologies, continuous & periodic cyber assessments to identify the

emerging and existing risks that our digital, assets are exposed to.

Your Company wiLL continue its focus on security monitoring and incident response through its security operations centre.

Annual Return

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with rule 12(1) of the Companies (Management and Administration) RuLes, 2014, the Annual Return in Form No. MGT-7, is available on the Company's website and can be accessed at the web-link https://www.mahindrafinance.com/investor-reLations/ financiaL-information#annuaL-reports

Board & Its Committees Board

Your Company recognises and embraces the importance of a diverse Board in its success. The confluence of Directors on the Board with different knowledge and skiLLs, perspective, regional and industry experience, cultural and geographical background ensures that your Company retains its competitive advantage.

As on 31^st March 2024, the Board of your Company consisted of 11 Directors comprising of a Non-Executive Chairman, 2 Executive Directors, 2 Non-Executive NonIndependent Directors and 6 Independent Directors, of whom 2 are Women Directors.

Committees constituted by the Board of Directors

The Board Committees are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

The details of the Board Committees along with their composition, powers, terms of reference, etc. are given in the Report on Corporate Governance, which forms part of this Annual Report.

Audit Committee

As on 31^st March 2024, the Audit Committee comprised of 5 Independent Directors and 1 Non-Executive Non-Independent Director:

Name	Category
Mr. C. B. Bhave	Chairman of the Committee (Independent Director)
Mr Dhananjay MungaLe	Independent Director
Ms. Rama Bijapurkar	Independent Director
Mr MiLind Sarwate	Independent Director
Mr. Diwakar Gupta	Independent Director
Mr Amarjyoti Barua	Non-Executive Non- Independent Director, appointed w.e.f. 27th October 2023

Changes in Audit Committee Members:

• Mr. Amit Kumar Sinha ceased to be a Member of the Committee with effect from dose of business hours on 28^th July 2023.

The composition of Audit Committee is over and above the minimum requirement prescribed under the Act, SEBI Listing ReguLations, and the RBI Regulations for NBFCs (the 'NBFC Regulations') of having a minimum of two-thirds of independent directors, incLuding the Chairman. ALL members of the Committee are non-executive directors possessing financiaL Literacy, and expertise in accounting or financiaL management reLated matters.

During the year under review, 7 Audit Committee Meetings were heLd. Further, the terms of reference of the Audit Committee were enhanced during the year under review, to incLude oversight of Information Security Audit of the Company in terms of RBI Master Direction dated 7^th November 2023 on Information TechnoLogy Governance, Risk, ControLs and Assurance Practices.

ALL the recommendations of the Audit Committee were approved and accepted by the Board during the year under review.

Meetings and Postal Ballot

The Board of Directors met 5 times during the year under review i.e., on 28^th April 2023, 28^th JuLy 2023, 27^th October 2023, 14^th December 2023 and 30^th January 2024, as against the statutory requirement of at Least four meetings. The requisite quorum was present at aLL the Board Meetings. The maximum time gap between any two Meetings was not more than one hundred and twenty days. These Meetings were weLL attended. The 33^rd AGM of the Company was heLd on 28^th JuLy 2023 through Video Conference.

During the year under review, no Extraordinary General Meeting ("EGM") of the Members was heLd.

During the year under review, members by way of speciaL resoLution passed through postaL baLLot on 19^th January 2024, approved alteration to the Memorandum of Association ("MOA") of the Company by inserting sub-cLause 1f. under "Main objects of the Company to authorise the Company to soLicit, procure insurance business inter-aLia as a Corporate Agent and undertake aLL incidentaL activities and amendment to cLause III. (v) of the MOA to excLude the restriction on the Company to undertake any business faLLing under the purview of Insurance Act, 1938. The voting resuLts were announced on 20^th January 2024 and submitted to the stock exchanges where securities of the Company were Listed.

DetaiLed information on the Meetings of the Board, its Committees, Postal BaLLot and the AGM is included in the Report on Corporate Governance, which forms part of this Annual Report.

A caLendar of aLL the meetings is prepared and circuLated weLL in advance to the Directors.

Meetings of Independent Directors

The Independent Directors met twice during the year under review, on 24^th August 2023 and 27^th March

2024. The Meetings were conducted without presence of the WhoLe-time Director(s), the Non-Executive NonIndependent Directors, Chief FinanciaL Officer or any other Management PersonneL to enabLe the Independent Directors to discuss matters pertaining to, inter-aLia, review of performance of Non-Independent Directors and the Board as a whoLe, review the performance of the Chairman of the Company, assess the quaLity, quantity and timeLiness of flow of information between the Company Management & the Board and its Committees and free flow discussion on any matter that is necessary for the Board to effectiveLy and reasonably perform their duties.

Directors and Key Managerial Personnel

Appointment/Re-appointment of Directors during FY2024 and upto the date of this report

•    Appointment of Mr. Raul Rebello as the Executive Director

Pursuant to the recommendation of Nomination and Remuneration Committee ("NRC") and the Board of Directors, the Members of the Company at the AnnuaL GeneraL Meeting heLd on 28^th JuLy

2023,    appointed Mr. RauL RebeLLo (DIN: 10052487), as the WhoLe-time Director and KMP designated as Executive Director and MD & CEO-designate with effect from 1^st May 2023 to 29^th ApriL 2024 (both days incLusive) and as the Managing Director of your Company designated as Managing Director & CEO with effect from 30^th ApriL 2024 up to 30^th ApriL 2028 (both days incLusive), LiabLe to retire by rotation.

Mr. RauL RebeLLo assumed the position of "Managing Director & CEO" of the Company w.e.f., 30^th ApriL

2024,    after superannuation of Mr. Ramesh Iyer, ViceChairman and Managing Director of the Company effective cLose of business hours of 29^th ApriL 2024.

•    Appointment of Mr. Ashwani Ghai as a NonExecutive, Non-Independent Director of the Company

Pursuant to the recommendation of NRC, the Board of Directors of the Company appointed Mr. Ashwani Ghai (DIN: 09733798), as an AdditionaL Director of your Company, with effect from 23^rd June 2023. The Members of the Company have at the AnnuaL GeneraL Meeting heLd on 28^th JuLy 2023, approved the appointment of Mr. Ashwani Ghai as a Non-Executive, Non-Independent Director of the Company, LiabLe to retire by rotation.

•    Appointment of Mr. Amarjyoti Barua as a NonExecutive, Non-Independent Director of the Company

Pursuant to the recommendation of NRC and the Board of Directors of the Company, the Members of the Company have at the AnnuaL GeneraL Meeting heLd on 28^th JuLy 2023, approved the appointment of Mr. Amarjyoti Barua (DIN: 09202472) as a Non-Executive Non-Independent Director of your Company with effect from 28^th JuLy 2023, LiabLe to retire by rotation.

•    Re-appointment of Mr. Milind Sarwate as an Independent Director of the Company

Based on the recommendation of NRC and the Board of Directors, the Members of the Company have by means of a SpeciaL ResoLution passed at the AnnuaL GeneraL Meeting heLd on 28^th JuLy 2023, approved re-appointment of Mr. MiLind Sarwate (DIN: 00109854), as an Independent Director of the Company for a second term of five consecutive years each, commencing from 1^st ApriL 2024 to 31^st March 2029 (both days incLusive) not LiabLe to retire by rotation.

•    Appointment of Mr. Vijay Kumar Sharma as an Additional Director (Independent and NonExecutive)

Basis recommendation of the NRC, the Board of Directors of the Company have subject to the approvaL of the members of the Company, approved the appointment of Mr. Vijay Kumar Sharma (DIN: 02449088) as an AdditionaL Director (Independent and Non-Executive) for a 1^st term of 5 consecutive years with effect from 15^th May 2024 to 14^th May 2029, not LiabLe to retire by rotation. In the opinion of the Board, Mr. Vijay Kumar Sharma hoLds high standards of integrity, expertise and experience (incLuding the proficiency). He is exempted from the requirement to undertake the onLine proficiency seLf-assessment test.

The necessary resoLution seeking approvaL of the members of the Company for appointment of Mr. Vijay Kumar Sharma as an Independent Director has been incorporated in the Notice of 34^th AnnuaL GeneraL Meeting of the Company.

Cessation of Directors

•    Mr. Siddhartha Mohanty (DIN: 08058830) NonExecutive Non-Independent Director, representing Life Insurance Corporation of India ("LIC") on the Board of the Company ceased to be the Director of your Company effective 12^th May 2023 as he assumed charge as Chairperson of LIC.

•    Mr. Amit Kumar Sinha (DIN: 09127387), Non-Executive Non-Independent Director of the Company was LiabLe to retire by rotation at the 33^rd AGM of the Company heLd on 28^th JuLy 2023 and was eLigibLe for re-appointment. However, Mr. Sinha did not seek re-appointment due to his transition to a new roLe in Mahindra Group and consequentLy ceased to be Director of your Company w.e.f. 28^th JuLy 2023.

The Board records appreciation for services rendered by Mr. Siddhartha Mohanty and Mr. Amit Kumar Sinha.

•    On attaining superannuation, Mr. Ramesh Iyer ceased to be the Vice-Chairman & Managing Director of your Company effective cLose of business hours of 29^th ApriL 2024.

An annuaL performance evaLuation exercise was carried out compLiance with the appLicabLe provisions of the Act, Listing ReguLations, the Company's Code of Independent Directors and the criteria and methodoLogy of performance evaluation approved by the NRC as under:

 

Evaluating body	Evaluatee	Broad criteria and parameters of evaluation	Process of evaluation
The Board, the NRC and the Independent Directors	The Board as a whole	Review of fuLfiLment of Board's responsibilities including strategic direction, financiaL reporting, risk management framework, ESG, grievance redressaL, succession pLanning, knowLedge of industry trends, diversity of Board etc. and feedback to improve Board's effectiveness.	Internal assessment through a structured and separate rating based questionnaire for each of the evaluations. The evaLuation is carried out on a secured online portal whereby the evaluators are able to submit their ratings and quaLitative feedback, detaiLs of which are accessibLe onLy to the NRC Chairperson. The NRC aLso reviews the impLementation and compLiance of the evaluation exercise done annually. The resuLts and outcome are evaLuated, deliberated upon and noted by the Independent Directors, the NRC and the Board at their respective meetings.
The Board	The Committees of the Board (separately for each Committee)	Structure, composition, attendance and participation, meetings of Committees, effectiveness of the functions handLed, independence of the Committee from the Board, contribution to decisions of the Board etc.
The Board, the NRC, and the Independent Directors	Independent Directors including those seeking re-appointment, Non-Independent Directors, and the MD (excluding the Director being evaluated)	QuaLifications, experience, skiLLs, independence criteria, integrity of the Directors, contribution and attendance at meetings, abiLity to function as a team and devote time, fuLfiLment of functions, abiLity to chaLLenge views of others in a constructive manner, knowLedge acquired with regard to the Company's business, understanding of industry, fairness and transparency demonstrated, adequacy of resource staffing.
The Board, the NRC and the Independent Directors	Chairperson	SkiLLs, expertise, effectiveness of Leadership, effective engagement with other Board members during and outside meetings, aLLocation of time to other Board members at the meetings and ability to steer the meetings, commitment, impartiality, ability to keep shareholders' interests in mind, effective engagement with shareholders during general meetings etc.	Â

 

The Board of Directors pLaces on record its deepest appreciation for the exempLary contribution, strategic foresight, innovative thinking, and steadfast commitment to excellence of Mr. Ramesh Iyer which has propeLLed Mahindra & Mahindra Financial. Services Limited to new heights, earning the organization recognition and respect within the industry. The Board is confident that Mr. RauL RebeLLo, the Managing Director & CEO wiU build a stronger edifice on the strength of this solid foundation laid by Mr. Ramesh Iyer during his long tenure as Managing Director of your Company.

During the year under review, no Independent Director resigned from the Board.

Retirement by Rotation

In terms of provisions of Section 152 of the Companies Act, 2013, Dr. Anish Shah, Non- Executive Chairman is liable to retire by rotation and, being eligible, has offered himself for re-appointment at the 34^th Annual General Meeting of the Company scheduled to be held on 23^rd July 2024.

Re-appointment of Independent Directors

No Independent Director of your Company is due for reappointment in FY2025.

Fit and Proper and Non-Disqualification declaration by Directors

ALL the Directors of the Company have confirmed that they satisfy the "fit and proper" criteria as prescribed under Chapter XI of RBI Master Direction No. RBI/DoR/2023-24/106 DoR. FIN.REC.No.45/03.10.119/2023-24 dated 19^th October 2023, as amended, and that they are not disqualified from being appointed/continuing as Directors in terms of Section 164 (1) and (2) of the Companies Act, 2013.

Declaration by Independent Directors

ALL the Independent Directors of your Company have given their decLarations and confirmation that they fuLfiLL the criteria of Independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations and have aLso confirmed that they are not aware of any circumstance or situation, which exist or may be reasonabLy anticipated, that couLd impair or impact their abiLity to discharge their duties with an objective independent judgment and without any externaL influence.

Further, the Board after taking these decLarations/ discLosures on record and acknowLedging the veracity of the same, concLuded that the Independent Directors hoLd highest standards of integrity and possess the reLevant proficiency, expertise and experience to quaLify and continue as Independent Directors of the Company and are Independent of the Management of the Company.

In terms of Section 150 of the Companies Act, 2013 read with RuLe 6 of the Companies (Appointment and QuaLification of Directors) RuLes, 2014, as amended, Independent Directors of the Company have confirmed that they have registered themseLves with the databank

maintained by The Indian Institute of Corporate Affairs, Manesar ('IICA') and the said registration is renewed and active.

The Independent Directors of the Company are either exempted from the requirement to undertake the onLine proficiency seLf-assessment test conducted by IICA or have cLeared the onLine proficiency seLf-assessment test as applicable.

Key Managerial Personnel

The foLLowing persons were designated as the Key ManageriaL PersonneL ("KMP") of your 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, as on 31^st March 2024:

1.    Mr. Ramesh Iyer, Vice-Chairman & Managing Director

2.    Mr. RauL RebeLLo, Executive Director and MD & CEO-designate

3.    Mr. Vivek Karve, Chief FinanciaL Officer of the Company

4.    Ms. BrijbaLa BatwaL, Company Secretary

Changes in Key Managerial Personnel

•    On attaining superannuation, Mr. Ramesh Iyer has ceased to be the Vice Chairman & Managing Director and KMP of the Company effective cLose of business hours of 29^th April 2024.

•    Mr. RauL RebeLLo has assumed the office of Managing Director & CEO of the Company effective 30^th April 2024.

Directors' Responsibility Statement

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, ("the Act") your Directors, based on the representations received from the Operating Management and after due enquiry, confirm that:

i.    In the preparation of the annuaL accounts for financiaL year ended 31^st March 2024, the appLicabLe accounting standards have been foLLowed and there are no materiaL departures in adoption of these standards.

ii.    They have seLected such accounting poLicies and appLied them consistentLy and made judgments and estimates that are reasonabLe and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March 2024 and of the profit of the Company for the year.

iii.    They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irreguLarities.

iv.    They have prepared the annuaL accounts for financiaL year ended 31^st March 2024 on a going concern basis.

v.    They have Laid down adequate internaL financiaL controLs to be foLLowed by the Company and that such internaL financiaL controLs were operating effectiveLy during the financiaL year ended 31^st March 2024.

vi.    They have devised proper systems to ensure compLiance with provisions of aLL appLicabLe Laws and that such systems were adequate and operating effectiveLy during the financiaL year ended 31^st March 2024.

The questionnaires for performance evaLuation are comprehensive and in aLignment with the guidance note on Board evaLuation issued by the SEBI, vide its circuLar no. SEBI/HO/CFD/CMD/CIR/P/2017/004 dated 5^th January 2017 and are in Line with the criteria and methodoLogy of performance evaLuation approved by the NRC.

Outcome and results of the performance evaluation

ALL the Directors of your Company as on 31^st March 2024 had participated in the evaLuation process. The Directors expressed their satisfaction with the AnnuaL performance evaLuation process of Board & Committees. During the year under review, NRC ascertained and re-affirmed that the depLoyment of "questionnaire" as a methodoLogy, is effective for evaLuation of performance of Board and

Performance Evaluation of the Board

The Companies Act, 2013 ("Act") and the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations") stipuLate the evaLuation of the performance of the Board, its Committees, individuaL Directors and the Chairperson.

Your Company has formuLated a process for performance evaLuation of the Independent Directors, the Board, its Committees and other individual Directors which includes criteria for performance evaLuation of the Non-Executive Directors and Executive Directors.

Committees and IndividuaL Directors. The resuLts of the EvaLuation for the year under review were shared with the Board, Chairperson of respective Committees and individuaL Directors.

It was noted that the Meetings of the Board and Committees are weLL managed in terms of comprehensive updates sent weLL in advance, constructive participation and deLiberations at the meeting Led by the Chair, enabLing Board and Committees to fuLfiL their statutory / review roLe and focus on Governance and InternaL ControLs. It was aLso noted that the Company during the year under review faciLitated famiLiarisation on cyber security, Prohibition of Insider Trading ReguLations, BRSR framework and provided reguLar updates to Board on aLL key matters.

The results of Evaluation showed high LeveL of commitment and engagement of Board, its various Committees and senior leadership. Based on the outcome of the evaluation for the year under review, the Board shaLL enhance its focus on providing strategic direction, digital initiatives, oversee regulatory matters and maintaining high standards of governance, to enhance value for aLL stakeholders while deepening its focus on ESG and risk management.

Based on the results of the evaluation, the Board has agreed on an action plan to further improve the effectiveness and functioning of the Board. The suggestions from previous evaluations were implemented by the Company during FY2024.

Familiarisation Programme for Directors

Your Company has adopted a structured programme for orientation of aLL Directors including the Independent Directors so as to famiLiarise them with the Company-its operations, business, industry, environment in which it functions, Indian and gLobaL macro-economic front and the reguLatory regime appLicabLe to it. The Management updates the Board Members on a continuing basis of any significant changes therein and provides them an insight to their expected roles and responsibilities so as to be in a position to take weLL-informed and timeLy decisions and contribute significantLy to the Company. The Directors are provided with all the documents to enable them to have a better understanding of the Company, its operations and the industry in which it operates.

The Independent Directors of your 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. The terms of reference of aLL the Committees with updations, if any, is shared with aLL the Board Members on quarterly basis.

Managing Director and Senior Management provide an overview of the operations and famiLiarise the Directors on matters related to the Company's values and commitments. They are aLso introduced to the organisation structure, constitution of various committees, board procedures, risk management strategies etc.

Strategic Presentations are made to the Board where Directors get an opportunity to interact with Senior Management. Directors are aLso informed of the various developments in the Company through Press Releases, emails, etc. Your Company has a secured Board portal which inter-alia provides a one stop and seamless solution for access to Board/Committee materiaLs to aLL the Directors. The Board portaL aLso contains AnnuaL Report, Code of Conduct for Directors, terms of appointment, committee charters etc. for ease of access. This enabLes greater transparency to the Board processes.

Pursuant to the provisions of the Companies Act, 2013 and ReguLation 25(7) of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing Regulations"), your Company has during the year conducted famiLiarization programmes through briefings

at Board/ Committee meetings for aLL its Directors including Independent Directors.

DetaiLs of famiLiarization programs imparted to the Independent Directors during the financiaL year under review in accordance with the requirements of the Listing Regulations are available on the Company's website and can be accessed at the webLink: https:// www.mahindrafinance.com/investor-reLations/poLicy-and-sharehoLder-information#famiLiarization-program and is also provided in the Corporate Governance Report forming part of this AnnuaL Report.

Policies on Appointment of Directors and Senior Management and Remuneration of Directors, Key Managerial Personnel and Employees

i)    Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management

In accordance with the provisions of Section 134(3) (e) of the Companies Act, 2013 ("the Act") read with Section 178 of the Act and ReguLation 17 of the SEBI (Listing Obligations and Disclosure Requirements) ReguLations, 2015 ("the Listing ReguLations"), your Company has adopted a PoLicy on Appointment of Directors and Senior Management and succession pLanning for orderLy succession to the Board and the Senior Management, which, inter-alia, incLudes the criteria for determining quaLifications, positive attributes and independence of Directors, identification of persons who are quaLified to become Directors and who may be appointed in the Senior Management team, succession pLanning for Directors and Senior Management, and the Talent Management framework of the Company. During the year under review, there were no changes in the said policy.

The said poLicy is avaiLabLe on the website of the Company and can be accessed at https://www. mahindrafinance.com/investor-reLations/poLicy-and-sharehoLder-information#mmfsL-poLicies

ii)    Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel, Senior Management and other Employees of the Company

Your Company has also adopted the Policy on Remuneration of Directors and the Remuneration PoLicy for Key ManageriaL PersonneL, Senior Management and other EmpLoyees of the Company in accordance with the provisions of Sub-section (4) of Section 178 of the Act, ScaLe Based ReguLations notified by the Reserve Bank of India ("RBI") and Listing Regulations.

During the year under review the Policy on Remuneration of Directors of the Company was amended to, inter-aLia, aLign with existing LegaL provisions and introduce certain standard clauses.

The said PoLicy is upLoaded on the website of the Company and can be accessed at: http.s://www. mahindrafinance.com/investor-relations/policy-and-shareholder-information#mmfsl-poli^.ies

Adequacy of Internal Financial Controls with Reference to the Financial Statements

Your Company has in pLace adequate internaL financiaL controLs with reference to the FinanciaL Statements commensurate with the size, scaLe and compLexity of its operations.

Your Company uses various industry standard systems to enable, empower and engender businesses and also to maintain its Books of Accounts. The transactionaL controLs built into these systems ensure appropriate segregation of duties, the appropriate LeveL of approvaL mechanisms and maintenance of supporting records. The systems, Standard Operating Procedures and controls are reviewed by the Management.

Your Company's internaL financiaL controLs are depLoyed through InternaL ControL-Integrated Framework (2013) issued by the Committee of Sponsoring Organisations of the Treadway Commission ("COSO"), that addresses materiaL risks in your Company's operations and financiaL reporting objectives. Such controls have been assessed during the year under review taking into consideration the essentiaL components of internaL controLs stated in the Guidance Note on Audit of InternaL FinanciaL ControLs Over FinanciaL Reporting ("ICFR") issued by The Institute of Chartered Accountants of India. The risk controL matrices are reviewed on a quarterly basis and control measures are tested and documented on a quarterLy basis. The Company has IT systems in pLace making the ICFR process completely digital and strengthening the review and monitoring mechanism. Based on the assessments carried out by the Management during the year, no reportable materiaL weakness or significant deficiencies in the design or operation of internaL financiaL controLs were observed.

Your Company recognises that internaL financiaL controLs cannot provide absoLute assurance of achieving financiaL, operational and compliance reporting objectives because of its inherent Limitations. ALso, projections of any evaLuation of the internaL financiaL controLs to future periods are subject to the risk that the internaL financiaL controL may become inadequate because of changes in conditions or that the degree of compLiance with the policies or procedures may deteriorate. Accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.

®

In compliance with RBI circular dated 3^rd February 2021, the Audit Committee has approved a Risk Based Internal Audit ("RBIA") framework, along with appropriate processes and plans for internal audit of FY2024.

Joint Statutory Auditor's certification on Internal Financial Controls

The Joint Statutory Auditors of your Company viz. M/s DeLoitte Haskins & SeLLs, Chartered Accountants and M/s. Mukund M. ChitaLe & Co., Chartered Accountants have examined the internaL financiaL controLs of the Company and have submitted an unmodified opinion on the adequacy and operating effectiveness of the internaL financiaL controLs over financiaL reporting as at 31^st March 2024.

Internal Audit Framework

Your Company has in place an adequate internal audit framework to monitor the efficacy of the internaL controLs with the objective of providing to the Audit Committee and the Board of Directors, an independent, objective and reasonabLe assurance on the adequacy and effectiveness of the Company's processes. The internaL audit approach verifies compLiance with the operationaL and system related procedures and controls.

Separate meetings between the Chief Internal Auditor and the Audit Committee

Separate meetings between the Chief InternaL Auditor and the Audit Committee, without the presence of Management, were enabLed to faciLitate free and frank discussion amongst them. The meetings were heLd on 28^th ApriL 2023, 22^nd September 2023, 27^th October 2023 and 27^th March 2024.

Risk Based Internal Audit (“RBIA”) framework

In compliance with RBI circular dated 3^rd February 2021, the Audit Committee has approved a Risk Based InternaL Audit ("RBIA") framework, aLong with appropriate processes and pLans for internaL audit of FY2024 and FY2025. The Risk Based InternaL Audit PLan is aLso being reviewed by the Statutory Auditors and Chief Risk Officer before being approved by the Audit Committee.

The audit pLan is aimed at evaLuation of the efficacy and adequacy of internaL controL systems and compLiance thereof, robustness of internaL processes, poLicies and accounting procedures and compliance with laws and reguLations. Based on the reports of internaL audit, function/ process owners undertake corrective action in their respective areas. Significant audit observations are tracked and presented to the Audit Committee, together with the status of the management actions and the progress of the impLementation of the recommendations on a reguLar basis.

Risk Management

Risk Management forms an integraL part of the Company's business. Your Company has a comprehensive Risk Management Policy in place and has laid down a well-defined risk management framework to identify, assess and monitor risks and strengthen controLs to mitigate risks. Your Company has established procedures to periodically pLace before the Risk Management Committee and the Board of Directors, the risk assessment and minimisation procedures being foLLowed by the Company and steps taken by it to mitigate these risks.

The Risk Management PoLicy, inter-aLia, includes identification of elements of risk, including Cyber Security and related risks as weLL as those risks which in the opinion of the Board may threaten the existence of the Company.

The 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. Your Company has a robust organisational structure for managing and reporting on risks. This risk management mechanism works at aLL the levels, which acts as the strategic defence cover of the Company's risk management and is supported by regular review, control, self-assessments and monitoring of key risk indicators. The Risk Management Committee ("RMC") constituted by the Board manages the integrated risk and reviews periodicaLLy the Risk Management PoLicy and strategy foLLowed by the Company.

In compLiance with ScaLe Based ReguLations, the Board of Directors have basis recommendation of RMC adopted ICAAP PoLicy and Framework with the objective of ensuring avaiLabiLity of adequate capitaL to support aLL risks in business as aLso enabLe effective risk management system in the Company.

The Chief Risk Officer ("CRO") oversees and strengthens the risk management function of the Company. The CRO is invited to the Board, Audit Committee, Asset Liability Committee and Risk Management Committee Meetings. The CRO aLong with members of the Senior Management apprises the Risk Management Committee and the Board on the risk assessment, process of identifying and evaLuating risks, major risks as weLL as the movement within the risk grades, the root cause of risks and their impact, key risk indicators, risk management measures and the steps being taken to mitigate these risks.

Auditors and Audit Reports

Joint Statutory Auditors and their Reports

M/s. DeLoitte Haskins & SeLLs, Chartered Accountants (ICAI Firm Registration No. 117365W) ["DHS"] and M/s. Mukund M. ChitaLe & Co., Chartered Accountants (ICAI Firm Registration No. 106655W) ["MCC"], the Joint Statutory Auditors of the Company have issued unmodified Audit Reports on the StandaLone and ConsoLidated FinanciaL Statements for the financiaL year ended 31^st March 2024. The report does not contain any quaLification, reservation or adverse remark or discLaimer.

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The Joint Statutory Auditors of the Company have issued unmodified Audit Reports on the Standalone and Consolidated Financial Statements for the financial year ended 31^st March 2024. The report does not contain any qualification, reservation or adverse remark or disclaimer.

The Joint Statutory Auditors hoLd vaLid peer review certificate as prescribed under the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("the Listing ReguLations").

The Joint Statutory Auditors of the Company were present at the last Annual General Meeting ("AGM") held on 28^th JuLy 2023.

Adoption of Policy for Appointment of Statutory Auditors

In compLiance with the Reserve Bank of India GuideLines dated 27^th ApriL 2021 ("RBI GuideLines"), your Company has in pLace a PoLicy for appointment of Statutory Auditors of the Company. The said PoLicy was amended by the Board of Directors to specificaLLy cover independence of auditors and annuaL review of performance of statutory auditors in compLiance with the RBI GuideLines.

Appointment of Joint Statutory Auditors

The current Joint Statutory Auditors have compLeted their tenure of 3 consecutive years with the Company. Consequently, their tenure with the Company wiLL end at the concLusion of the 34^th AGM of the Company to be heLd in JuLy 2024. As per RBI GuideLines, the said audit firms wouLd be in-eLigibLe for re-appointment as Statutory Auditors of the Company for such cooLing period as specified in RBI guideLines. Hence, it is necessary to appoint new set of Joint Statutory Auditors of the Company.

Basis the recommendation of the Audit Committee, the Board of Directors, have approved and recommended the appointment of M/s. M M Nissim & Co LLP, Chartered Accountants (ICAI Firm Registration Number: 107122W/ W100672) and M/s. M P ChitaLe & Co., Chartered Accountants (ICAI Firm Registration Number: 101851W) as the Joint Statutory Auditors of your Company for a term of 3 consecutive years to hoLd office from concLusion of the 34^th AGM upto the concLusion of 37^th AGM to be heLd in the year 2027.

The Joint Statutory Auditors, as proposed, have given a confirmation to the effect that they are eLigibLe to be appointed and not disquaLified from acting as the Statutory Auditors .

Members are requested to consider and approve the appointment of M/s. M M Nissim & Co LLP, Chartered Accountants and M/s. M P ChitaLe & Co., Chartered Accountants, as the Joint Statutory Auditors of your Company . The proposaL is incLuded in the Notice of 34^th AGM of the Company.

Secretarial Auditor and Audit Report

M/s. Makarand M. Joshi & Co., Practicing Company Secretaries were appointed as the SecretariaL Auditor of the Company for conducting the SecretariaL Audit of your Company for FY2023 and FY2024 in accordance with the provisions of Section 204 of the Act read with the ruLes framed thereunder.

In accordance with the provisions of Sub-section (1) of

Section 204 of the Companies Act, 2013, the SecretariaL Audit Report for FY2024 issued by M/s. Makarand M. Joshi & Co., is appended to this Report as “Annexure MI"

M/s. Makarand M. Joshi & Co., was present at the Last AGM of the Company heLd on 28^th JuLy 2023.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer.

Appointment of Secretarial Auditor

The Board of Directors have decided to rotate the SecretariaL Auditors from good governance perspective, and accordingLy appointed M/s. KSR & Co Company Secretaries LLP as the SecretariaL Auditor of the Company for conducting the SecretariaL Audit of the Company for FY2025 and FY2026 in accordance with the provisions of Section 204 of the Act read with the ruLes framed thereunder.

M/s. KSR & Co Company Secretaries LLP is a Company Secretaries firm which has created a niche in Corporate Law practice with expertise in diverse domains akin to a fuLL-service Law firm. They have served reputed cLients across various sectors, having an exceLLent track record in the fieLd of Corporate Laws, Securities Laws, Foreign Exchange Management Laws, InteLLectuaL Property Laws, InsoLvency and Bankruptcy Law, IndustriaL & Labour Laws and EnvironmentaL Laws.

The firm undertakes Board Process Audits, Corporate Governance Audits, SecretariaL Audits, InternaL Audits on functions and activities, Corporate Actions /Transactions based Due DiLigence Audits.

Secretarial Audit of Material Subsidiary

The SecretariaL Audit of Mahindra RuraL Housing Finance Limited ("MRHFL"), a materiaL, debt Listed subsidiary of the Company, for FY2024 was carried out pursuant to Section 204 of the Companies Act, 2013. The SecretariaL Audit Report of MRHFL submitted by M/s. KSR & Co Company Secretaries LLP, does not contain any quaLification, reservation or adverse remark or discLaimer.

There is no materiaL unListed indian subsidiary of the Company as on 31^st March, 2024 and as such the requirement under ReguLation 24A of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015 ("Listing ReguLations") regarding the SecretariaL Audit of materiaL unListed indian subsidiary is not appLicabLe to the Company for the FinanciaL Year 2023-24.

Annual Secretarial Compliance Report with additional confirmations on compliances

In compLiance with ReguLation 24A of Listing ReguLations, your Company has undertaken an audit for FY2024 for aLL the appLicabLe compLiances as per Listing ReguLations, 2015 and circuLars/guideLines issued thereunder.

The AnnuaL SecretariaL CompLiance Report ("ASCR") issued by M/s. Makarand M. Joshi & Co., Company Secretaries, SecretariaL Auditor for FY2024 with additionaL confirmations on compLiances by the Company

with respect to Insider Trading ReguLations, ReLated party Transactions, updation of PoLicies, discLosure of materiaL events to Stock Exchanges etc. as per revised ASCR format prescribed by BSE and NSE, has been fiLed with the Stock Exchanges, and is appended to this Report as “Annexure IV".

The Annual Secretarial Compliance Report does not contain any qualification, reservation or adverse remark.

Cost Records and Cost Audit

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148 of the Companies Act, 2013 are not appLicabLe in respect of the business activities carried out by your Company and hence such accounts and records were not required to be maintained by the Company.

Fraud Reporting

During the year under review, the Joint Statutory Auditors and the SecretariaL Auditor have not reported any instances of frauds committed in the Company by its officers or empLoyees, invoLving amount of Less than 1 crore to the Audit Committee under section 143(12) of the Companies Act, 2013 detaiLs of which need to be mentioned in this Report.

As reported in pubLic domain, during the end of 4^th quarter of the financiaL year ended 31^st March 2024, an incident of fraud was detected by the management at Company's branch at AizawL, Mizoram in respect of retaiL vehicLe Loans disbursed by the Company. The fraud invoLved forgery of KYC documents & asset reLated documents, Leading to embezzLement of Company funds. The fraud was perpetrated in the Branch through coLLusion amongst branch empLoyees, with segregated duties, thus compromising the existing maker-checker controLs. A few vehicLe deaLers and externaL parties (empLoyees of banks / oLd empLoyees of the Company) connived with these empLoyees in this frauduLent activity. Based on the resuLts of the assessment carried out by an accounting firm and further vaLidated by the management, 2887 Loan accounts were identified by the Management as potentiaLLy frauduLent in nature with an aggregate net recoverabLe baLance of ' 135.86 crore. The Company has made 100% provision for this amount, which impacted the profits for the quarter and year ended 31^st March 2024.

The Company has carried out an exhaustive check on aLL Live Loan accounts across its branches and has concLuded that there is no evidence of a simiLar fraud anywhere eLse in the country. As a proactive step, the Company has identified a few key initiatives to further strengthen control, incLuding but not Limited to acceLerating the timeLine for centraLization of document reviews, impLementing digitaL due diLigence tooLs for customer on-boarding and enhanced screening and sampLing of cases by the fraud controL unit, which is set up to seLect sampLe of disbursements across branches to screen the documents invoLved possibiLity for the possibiLity of them being frauduLent.

Further details on the above and related matters can be referred in Note no. 42 to the Standalone financial statements forming part of this AnnuaL report.

The Company is reinforcing its commitment to trust, integrity and transparency through enhanced measures for compliance, risk management, and governance.

Particulars of Contracts or Arrangements with Related Parties

Your Company has in place a robust process for approval of Related Party Transactions and on Dealing with Related Parties.

ALL contracts/arrangements/transactions entered into by the Company during the Financial Year with related parties were in the ordinary course of business and on an arm's length basis.

Omnibus approval of Audit Committee is obtained for Related Party Transactions which are of repetitive nature, which are reviewed on quarterly basis by the Audit Committee as per Regulation 23 of the Listing Regulations and Section 177 of the Companies Act, 2013.

all Related Party Transactions and subsequent material modifications, if any, were placed before the Audit Committee for review and approval. Necessary details for each of the Related Party Transactions as applicable along with the justification are provided to the Audit Committee in terms of the Company's Policy on Materiality of and DeaLing with ReLated Party Transactions and as required under SEBI CircuLar dated 22^nd November 2021.

The Company has not entered into Material Related Party Transactions as per the provisions of the Companies Act, 2013 and a confirmation to this effect as required under Section 134(3)(h) of the Companies Act 2013 is given in form AOC-2 as “Annexure V", which forms part of this AnnuaL Report.

In accordance with the applicable provisions of the Master Direction issued by the Reserve Bank of India and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations"), the 'Policy on Materiality of and Dealing with Related Party Transactions' as updated is avaiLabLe on the Company's website: https:// www.mahindrafinance.com/investor-relations/policy-and-sharehnlder-infnrmatinn#mmfsl-pnlicies

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As per the Whistle Blower Policy implemented by the Company, the Employees, Directors or any Stakeholders associated with the Company are free to report illegal or unethical behaviour, actual or suspected fraud, or violation of the Company's Code(s) of Conduct.

The transactions of the Company with the company belonging to the promoter/promoter group which holds more than 10% shareholding in the Company as required pursuant to para A of schedule V of the Listing Regulations is disclosed separately in the financial statements of the Company. Members of the Company had approved entering into MateriaL ReLated Party transaction with Mahindra & Mahindra Limited, (Promoter/ HoLding Company and a ReLated party) under ReguLation 23 of the Listing Regulations. During the year under review, the aggregate value of the transactions entered with Mahindra & Mahindra Limited did not exceed the materiaLity threshoLd as prescribed under ReguLation 23 of the Listing Regulations. Further details on the transactions with reLated parties are provided in the accompanying financial statements.

Whistle Blower Policy/Vigil Mechanism

Your Company promotes ethicaL behaviour in aLL its business activities and has estabLished a vigiL mechanism for its Directors, Employees, and Stakeholders associated with the Company to report their genuine concerns. The Vigil Mechanism as envisaged in the Companies Act, 2013 and the RuLes prescribed thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is implemented through the Whistle Blower 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 per the WhistLe BLower PoLicy implemented by the Company, the Employees, Directors or any Stakeholders associated with the Company are free to report illegal or unethical behaviour, actual or suspected fraud, or violation of the Company's Code(s) of Conduct or Corporate Governance PoLicies or any improper activity, through the channeLs provided beLow.

The Whistle Blower Policy provides for protected disclosure and protection to the Whistle Blower. Under the Whistle Blower Policy, the confidentiality of those reporting vioLation(s) is protected and they are not subject to any discriminatory practices. The Whistle-blower can make a protected disclosure by using any of the following channels for reporting:

1.    Independent third-party Ethics Helpline Service Portal: https://ethics.mahindra.com

2.    Toll free No: 000 800 100 4175

3.    Chairperson of the Audit Committee

The Whistle Blower Policy has been widely disseminated within the Company. The Policy is available on the website of the Company at the web link: http.s://www. mahindrafinance.com/investor-relations/policy-and-sharehnlder-infnrmatinn#mmfsl-pnlicies

During the year, the Company received 10 whistle bLower compLaints. ALL the cases were investigated and appropriate actions were taken.

The Audit Committee is apprised of the vigil mechanism on a periodic basis. During the year, no person was denied

access to the Chairperson of the Audit Committee. A quarterly report on the whistLe bLower compLaints is placed before the Audit Committee for its review.

Particulars of Employees and Related Disclosures

Details of employees who were in receipt of remuneration of not less than ' 1,02,00,000 during the year ended 31^st March 2024 or not Less than ' 8,50,000 per month during any part of the year, as required under provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be made available during 21 days before the Annual GeneraL Meeting in eLectronic mode to any SharehoLder upon request sent at the EmaiL ID: investorheLpLine [e-mail]. Such detaiLs are aLso avaiLabLe on Company's website and can be accessed at the web-link: https://www.mahindrafinance.com/investor-relations/ financial-information#annual-reports

Disclosures with respect to the remuneration of Directors, Key Managerial PersonneL and EmpLoyees as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules, 2014,isgivenin“AnnexureVI".

Disclosure in respect of remuneration/commission drawn by the Managing Director / Whole-time Director from Holding or Subsidiary Company

Mr. Ramesh Iyer, former Vice-Chairman & Managing Director and Mr. RauL RebeLLo, Managing Director & CEO did not receive any remuneration or commission from Holding/Subsidiaries of the Company during FY2024.

Disclosure Under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act")

Your Company is an equaL opportunity empLoyer and is committed to ensuring that the work environment at aU its locations is conducive to fair, safe and harmonious relations between employees. It strongly beLieves in upholding the dignity of aU its employees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictly prohibited.

Your Company has in pLace a comprehensive PoLicy in accordance with the provisions of POSH Act and Rules made thereunder.

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The Company conducts an online Induction Training through the learning platform M-Drona (Internal Training App) covering topics including POSH awareness, reconciliation before filing POSH complaint(s).

ALL empLoyees (permanent, contractuaL, temporary and trainees) are covered under this Policy. The Policy has been wideLy communicated internaLLy and is pLaced on the Company's intranet portal. The Company ensures that no employee is disadvantaged by way of gender discrimination.

The POSH Policy is available on the website of the Company and can be accessed at the web-link: https:// www.mahindrafinance.com/investor-reLations/poLicy-and-sharehnlder-infnrmatinn#mmfsl-pnlicies.

Your Company has compLied with the provisions reLating to the constitution of the Internal Complaints Committee ("ICC") under the POSH Act to redress compLaints received regarding sexuaL harassment.

To ensure that aLL the employees are sensitized regarding issues of sexual harassment, the Company conducts an onLine Induction Training through the Learning platform M-Drona (Internal Training App) covering topics including POSH awareness, reconciliation before filing POSH complaint(s) and consequences of filing the false compLaint(s).

The following is a summary of Sexual Harassment complaint(s) received and disposed of during the FY2024, pursuant to the POSH Act and Rules framed thereunder:

a)    Number of complaint(s) of Sexual Harassment received during FY 2024 - 1

b)    Number of complaint(s) disposed of during FY2024 - 1

c)    Number of cases pending as of 31^st March 2024- 0

Awareness and Training on POSH

Continuous awareness in this area has been created vide the POSH campaign reiterating Mahindra's commitment to providing a safe workplace to all its employees. During the year, the Company organised sensitisation and awareness programs vide inductions for new joiners, e-learning modules for aU employees, trainees, associates including sending emaiLers, creating standees and posters to sensitise aLL employees to conduct themseLves in a professional manner. Further, virtual and classroom training sessions were conducted by the Company's Ethics Counselors. The Company also organized offline Leadership conversations on gender sensitisation and empLoyee interactive sessions incLuding conscious incLusions.

d)    Number of workshops/awareness programme on the subject carried out during the year under review are as under:

•    Awareness program was conducted in which mailers & video on the Prevention of Sexual Harassment at the workplace along with POSH poLicies was circuLated to aLL empLoyees. POSH training was provided to aLL new joinees as a part of induction module.

•    An online e-learning module for employees on Prevention of Sexual Harassment covering topics on SexuaL Harassment, the process of filing complaints, dealing with Sexual

Harassment, etc. is developed for training. 99.79% of the employees have completed this training.

•    One Training program on ICC was conducted for aLL ICC members.

•    One Training program on POSH sensitization was conducted for the HR team.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014 is attached as “Annexure VII" to the Board's Report.

Policies

The details of the Key Policies adopted by your Company and changes made therein, if any, during the year under review are mentioned at “Annexure VIII" to the Board's Report.

Compliance with the Provisions of Secretarial Standard - 1 and Secretarial Standard - 2

The Directors have devised proper systems to ensure compliance with the provisions of the Secretarial Standards, i.e., SS-1 and SS-2, relating to 'Meetings of the Board of Directors' and 'GeneraL Meetings', respectively, issued by The Institute of Company Secretaries of India ("ICSI") and such systems are adequate and operating effectively.

Voluntary Adherence of Secretarial Standards by all Board Committees

Although, SS-1 compliance is required onLy for Board and its Committees mandatorily required to be constituted under the Companies Act, 2013 ("the Act"), the Company adheres and complies with the good practices enunciated in the said Secretarial Standards for aLL its mandatory and non-mandatory Board level Committees.

Your Company has compLied with appLicabLe SS-1 and SS-2, during the year under review.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations in future

There were no significant and materiaL orders passed by the regulators or courts or tribunals during the year impacting the going concern status of the Company and its future operations.

Disclosure pertaining to Insolvency & Bankruptcy Code

There were neither any appLications fiLed by or against the Company nor any proceedings were pending under the InsoLvency and Bankruptcy Code, 2016 during the year under review.

Disclosure on One-Time Settlement

During the year, the Company has not made any one-time settLement for Loans taken from the Banks or FinanciaL Institutions and hence the detaiLs of difference between amount of the vaLuation done at the time of one-time settLement and the vaLuation done whiLe taking Loan from the Banks or FinanciaL Institutions aLong with the reasons thereof is not appLicabLe.

General Disclosures

The Directors further state that no discLosure or reporting is required in respect of the foLLowing items, as there were no transactions/events related to these items during the financiaL year under review:

•    There was no issue of equity shares with differentiaL rights as to dividend, voting or otherwise;

•    There was no issue of shares (incLuding sweat equity shares) to the empLoyees of the Company under any scheme, save and except EmpLoyee Stock Option schemes referred to in this Report;

•    There was no raising of funds/issue of shares through PreferentiaL ALLotment, PubLic Issue, Rights Issue or QuaLified InstitutionaL PLacement;

•    There was no buy back of the equity shares during the year under review;

•    There were no voting rights which are not directLy exercised by the empLoyees in respect of equity shares for the subscription/purchase for which Loan was given by the Company (as there is no scheme pursuant to which such persons can beneficiaLLy hoLd shares as envisaged under Section 67(3)(c) of the Companies Act, 2013 ("the Act");

•    There was no suspension of trading of securities of the Company on account of corporate action or otherwise;

•    There was no revision made in the FinanciaL Statements or the Board's Report of the Company;

•    The Company being an NBFC, the provisions reLating to Chapter V of the Act, i.e., acceptance of deposit, are not applicable. Disclosures as per NBFC regulations have been made in this Annual Report.

Acknowledgments

The Board conveys its deep gratitude and appreciation to aLL the empLoyees of the Company for their tremendous efforts as weLL as their exempLary dedication and contribution to the Company's performance.

The Directors wouLd aLso Like to thank its sharehoLders, customers, vendors, business partners, bankers, government and aLL other business associates for their continued support to the Company and the Management.

For and on behalf of the Board Dr. Anish Shah

PLace : U.S.A.    Chairman

Date : 4^th May 2024    DIN: 02719429

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Mar 31, 2024

The Directors present their Report together with the Audited Financial Statements of your Company for the year ended 31^st March, 2024.

A. FINANCIAL AND OPERATIONAL HIGHLIGHTS

(Rs. in crores)
Â	Standalone		Consolidated
Particulars	Â	Â	2024	2023
Revenue from Operations...........	98,763.42	84,960.26	1,38,279.30	1,21,268.55
Income from investment related to subsidiaries, associates and joint ventures...	2,456.00	1,684.37	798.97	93.41
Other income.......................................	1,938.43	923.71	2,176.42	1,166.95
Profit before Depreciation, Finance Costs, Exceptional items, Share of profit of associates and joint ventures and Taxation.........................................	17,060.59	12,987.56	27,068.35	21,491.78
Less: Depreciation, Amortisation and Impairment Expenses...........	3,438.85	3,154.46	4,723.78	4,356.81
Profit before Finance Costs, Exceptional items, Share of profit of associates and joint ventures and Taxation...................	13,621.74	9,833.10	22,344.57	17,134.97
Less: Finance Costs..........................	138.77	272.78	7,488.21	5,829.70
Profit before Exceptional items, Share of profit of associates and joint ventures and Taxation	13,482.97	9,560.32	14,856.36	11,305.27
Add: Share of profit of associates and joint ventures...	-	Â	1,121.43	1,505.44
Profit before Exceptional items and Taxation.........................................	13,482.97	9,560.32	15,977.79	12,810.71
Add: Exceptional items..................	-	(1,429.54)	-	1,249.52
Profit before Taxation....................	13,482.97	8,130.78	15,977.79	14,060.23
Less: Tax Expense.............................	2,765.17	1,582.14	3,707.97	2,685.75
Profit for the year............................	10,717.80	6,548.64	12,269.82	11,374.48
Profit/(Loss) for the year attributable to :	Â	Â	Â	Â
Owners of the Company..............	10,717.80	6,548.64	11,268.64	10,281.50
Non-controlling interest..............	-	-	1,001.18	1,092.98
Balance of profit for earlier years...........................................................	37,478.03	32,450.64	48,187.61	39,174.21
Profits available for appropriation........................................	48,195.83	38,999.28	59,456.25	49,455.71
Less: Dividend Paid on Equity Shares........................................................	2,020.73	1,435.89	1,810.14	1,284.77
Add: Other adjustment to retained earnings$.............................	134.03	(85.36)	71.75	16.67
Balance carried forward...............	46,309.13	37,478.03	57,717.86	48,187.61
$ For details refer to 'Statement of Changes in Equity' in the Standalone Financial Statements and 'Consolidated Statement of Changes in Equity' in the Consolidated Financial Statements respectively forming part of the Annual Report.

Financial Year 2024 witnessed demand resilience regardless of tightening financial conditions, simmering geo-political risks and adverse weather patterns.

For instance, the US Federal Reserve increased policy rates to the highest level in over two decades, but elevated Government spending supported tight labour market conditions. Hot wars near the Black Sea, the Red Sea and the Gaza strip pushed up trading costs, however this came against a backdrop of low input cost pressures brought about by improving supply chain conditions and expectations of weak global growth. Finally, El Nino conditions led to deficient rains in India impacting rural incomes which were partly offset by stronger construction activity. In this midst, aggressive output curbs announced by OPEC pushed up crude oil prices close to USD 100/bbl during the year; fortunately, higher supply from the Americas brought temporary respite to fuel costs.

As a result of countervailing factors, demand momentum and consumer sentiment were stronger than expected resulting in central banks tightening financing conditions even further and pushing policy rate cut expectations deeper into Financial Year 2025.

In India, the growth push came from stronger services exports, leveraged consumption from wealthier households and public infrastructure capex. India's real GDP grew at over 8% during the last three quarters of Calendar Year 2023. The ongoing revival in private sector project announcements portends sustained momentum in job creation going into Financial Year 2025.

The Profit for the year before Depreciation, Finance Costs, Exceptional items and Taxation recorded an increase of 31.36% at Rs. 17,060.59 crores as against Rs. 12,987.56 crores in the previous year. Profit after tax increased by 63.66% at Rs. 10,717.80 crores as against Rs. 6,548.64 crores in the previous year.

Your Company remains committed to its extensive cost restructuring initiatives and efficiency enhancements, yielding substantial savings. By maintaining a sharp focus on cost controls, streamlining processes, and introducing innovative products that consistently surpass customer expectations, your Company sustains profitable growth despite the current economic conditions.

Earnings Per Share (EPS)

The Standalone basic EPS of the Company stood at Rs. 89.42 for the Financial Year ended 31^st March, 2024 as against Rs. 54.70 for the Financial Year ended 31^st March, 2023 and Diluted EPS stood at Rs. 89.08 as against Rs. 54.49 in the previous year.

Details of Material Changes from the end of the Financial Year till the date of this Report

No material changes and commitments have occurred after the closure of the Financial Year 2023-24 till the date of this Report, which would affect the financial position of your Company.

Performance Review

Automotive Sector*

Your Company's Automotive Sector posted total sales of 8,24,939 vehicles (7,46,833 four-wheelers and 78,106 three-wheelers) as against a total of 6,98,456 vehicles (6,39,374 four-wheelers and 59,082 three-wheelers) in the previous year, registering a growth of 18.1%.

In the domestic market, your Company sold a total of 8,00,276 vehicles as compared to 6,66,349 vehicles in the previous year, resulting in a growth of 20.1%.

In the Passenger Vehicle (PV) segment, your Company sold 4,59,877 vehicles [including 4,59,864 Utility Vehicles (UVs) and 13 Vans] as compared to the previous year's volume of 3,59,253 vehicles [including 3,56,961 Utility Vehicles (UVs), 2,078 Vans and 214 Cars] registering a growth of 28%.

In the Commercial Vehicle (CV) segment, your Company sold 2,62,810 vehicles [including 44,093 vehicles <2T GVW, 1,91,603 vehicles between 2-3.5T GVW, 15,809 Light Commercial Vehicles (LCVs) in the 3.5T-7.5T segment, 1,818 vehicles in the 7.5T-12T GVW segment, 6,146 Heavy Commercial Vehicles (HCVs) and 3,341 LCV Passenger] registering a growth of 5.7% over the previous year's volumes of 2,48,576 vehicles [including 40,419 vehicles <2T GVW, 1,98,121 vehicles between 2-3.5T GVW, 1,959 LCVs in the 3.5T-7.5T segment, 1,657 vehicles in the 7.5-12T GVW segment, 4,742 HCVs and 1,678 LCV Passenger].

In the three-wheeler segment, your Company sold 77,589 three-wheelers in the domestic market, registering a growth of 32.6% over the previous year's volume of 58,520 three-wheelers.

For the year under review, the Indian automotive industry (except 2W) grew by 10.1%, with the PV industry growth of 8.4% and CV industry growth of 0.6%. The UV segment

showed growth of 25.8%. Within the CV industry, the LCV goods <7.5T segment de-grew by 2.9% while the Medium and Heavy Commercial Vehicles (MHCV) Goods Segment de-grew by 0.2%.

Your Company's UV volumes stood at 4,59,864 units, a growth of 28.8%. The UV market share for your Company stood at 18.2%. Scorpio, Thar, XUV700 and Bolero continued to be strong brands for your Company in the UV segment.

In the LCV<7.5T segment, your Company retained its No. 1 position with 46.3% Market Share. Your Company sold a total of 2,51,505 vehicles in this segment, which is a growth of 4.6% over the previous year.

In the MHCV Goods Segment, your Company sold 7,964 trucks as against 6,399 trucks in the previous year. This is a growth of 24.5%. Your Company's market share in the MHCV segment stands at 2.5%.

Your Company is the pioneer for Electric Vehicles (EVs) in India, and for the year under review, in the electric three-wheeler segment, your Company sold 66,190 vehicles as against 43,693 vehicles in the previous year, with a growth of 51.5%. In the electric four-wheeler segment, your Company sold 8,025 vehicles as against 2,416 vehicles in the previous year.

During the year under review, your Company posted an export volume of 24,663 vehicles as against the previous year's exports of 32,107 vehicles representing a de-growth of 23.2%.

The sales of spare parts for the year stood at Rs. 4,288.40 crores (including exports of Rs. 310.3 crores) as compared to Rs. 3,824.26 crores (including exports of Rs. 396.51 crores) in the previous year, registering a growth of 12.1%.

* The figures include sales made by subsidiary Mahindra Last Mile Mobility Limited with effect from 1^st September, 2023.

Farm Equipment Sector

Your Company's Farm Equipment Sector recorded total sales of 3,78,386 tractors (domestic + export) as against 4,07,545 tractors sold in the previous year. These figures for the current year sales and previous year sales include tractors sold under the Trakstar brand, which is the third brand of your Company under the subsidiary Gromax Agri Equipment Limited.

For the year under review, the tractor industry in India recorded sales of 8,75,724 tractors, a de-growth of 7.4%. Tractor Industry recorded de-growth in Financial Year 2024 on account of erratic monsoon due to El Nino, lesser water availability and high base of FY23. Southern and Western states continue to face severe stress. Shift of Chaitra Navratri from March to April has also contributed in significant industry drop.

In the domestic market, your Company sold 3,64,526 Tractors, as compared to 3,89,531 Tractors in the previous year (these figures include tractors sold by Gromax Agri Equipment Limited), recording a de-growth of 6.4%. It is the 2^nd highest ever volume sold by your Company. With a market share at 41.6%, a gain of 0.4% over previous year, your Company remains the Market Leader for the 41^st consecutive year.

Your Company has launched next generation product platforms in FY 24 like Mahindra OJA, Swaraj 'Target' and 'Naya Swaraj', all of which have significantly contributed to a good performance.

Your Company continues to focus on growing the farm mechanisation space, by offering affordable mechanisation solutions. The portfolio comprises of Rotavators, Cultivators, Harvesters, Rice Transplanters, Balers and Sprayers.

For the year under review, your Company exported 13,860 tractors which is a de-growth of 23.1% over the previous year. Overall exports are under pressure due to global slow down.

Net Sales of Spare parts for the Financial Year 2024 stood at Rs. 1,121.2 crores (including exports of Rs. 105 crores) as compared to Rs. 1,070.5 crores (including exports of Rs. 97.4 crores) in the previous Financial Year 2023, registering a growth of 4.7%.

Please refer to the paragraph on Operating Results in the Management Discussion & Analysis section for detailed analysis.

Other Businesses

Powerol

Mahindra Powerol has been significantly ruling the power back-up industry from last 20+ years. Your Company is at No. 2 position in overall Power generation market by volume.

Mahindra Powerol is spread across 300+ sales and service centres nationwide with over 12 overseas locations. In alignment with this strategy, Powerol's unique business model evenly allocates revenue between product sales and services, with each accounting for 50%. In addition to Telecom, Powerol has also been focusing on increasing the retail market share by HkVA range extensions. With the successful launch of CPCB4+ gensets, your Company has already sold more than 500 units in the market so far.

Powerol's focus on green energy, has also initiated EV charger business for home charger installations. It has already installed over 5,000 chargers nationwide. Accompanied with this, Powerol is also into Energy Storage Solutions segments through Li-ion batteries.

Construction Equipment

For the year under review, your Company (under the Mahindra Earth Master brand) sold 1,118 Backhoe Loaders (BHLs), a 13% increase as against 989 sold in the previous year. Your Company also has a presence in the Road Construction Equipment Business through motor graders (under the Mahindra RoadMaster brand).

For the year under review, your Company sold 306 motor graders, a 62.7% increase as against 188 sold in the previous year. Your Company also has a presence in the Sugar Cane Haulage Market (under the Mahindra HaulMaster brand) in the export market. The BHL industry grew by 22% and the motor grader industry grew by 28% due to increased focus from the Government of India on infrastructure.

Two-Wheeler Business

In line with the strategy for the two-wheeler business, your Company through its subsidiary, Classic Legends Private Limited had re-introduced the iconic brands 'Jawa' and 'Yezdi' to the Indian market in the Financial Year 2019 and 2022 respectively. During Financial Year 2022-23, '42 Bobber' was introduced and during Financial Year 2023-24, 'Jawa 350' was introduced to the Indian market. In addition, the Company forayed into new international markets through iconic British brand BSA in UK and European markets.

The volumes in domestic market for Financial Year 2023-24 got impacted with delays in launching improved products and subdued marketing spend. Exports volume fell owing to slowdown in the UK/European economies and the Russia-Ukraine conflicts, impacting demand sentiments. However, with tied-up funding for the next level of growth and new external investors coming on board, the focus for FY25 is on Product improvements, New launches, Dealer developments, Network expansion, Cost reductions, to grow the volumes and improve the margins multi-fold in FY25 and going forward.

Current Year's review

During the period 1^st April, 2024 to 15^th May, 2024, 93,296 vehicles were produced as against 82,438 vehicles and 90,395 vehicles were dispatched as against 79,043 vehicles during the corresponding period in the last year. During the same period 50,481 tractors were produced and 49,065 tractors dispatched as against 51,237 tractors produced and 49,249 tractors dispatched during the corresponding period in the previous year.

Global growth is holding up better than expected despite the simmering conflict in Russia-Ukraine, escalation of conflict in Israel-Palestine and non-state actors disrupting trade near the

Red Sea, which has pushed out policy rate cut expectations deeper into Financial Year 2025. Fortunately, improvement in supply chain conditions has lowered input cost pressures providing households some respite against rising cost of living.

In India, El Nino conditions have disrupted agricultural output, but lower input costs and higher construction activity is supporting rural income growth. The growth push in Financial Year 2024 came from services exports, leveraged consumption by wealthier households and public sector infrastructure spending. Continuation of leveraged consumption and an uptick in investments should support growth in Financial Year 2025, even as expectations of above normal monsoons improve agricultural incomes and lower inflation. The economy is benefiting from revival in corporate sector project announcements and improving consumer sentiment, which augurs well for job generation in Financial Year 2025. From the supply side, sustained improvement in growth is likely post general elections in India, led by financial services, manufacturing, and construction sectors.

Finance

Financial Year 2023-24 saw global geopolitics reaching a pivotal moment, with the tensions affecting international relations on every continent. The global economic recovery proved surprisingly resilient - inflation receded significantly in most major economies, recession was mostly avoided, supply chain disruption eased considerably, and labour markets remained historically tight. Global growth rose by an estimated 3.2% in 2023, up from 2.3% in 2022, largely due to resilience in the United States and several large emerging markets, coupled with more fiscal support in China. The International Monetary Fund ("IMF") forecasts the world economy to continue growing at 3.2% during 2024 and 2025, as well.

Decisive monetary policy actions by central banks around the world led to sharp disinflation process. Headline inflation fell to 6.8% in 2023 from a peak of 9.4% in 2022 and is set to fall further in 2024. However, the path of future rate cuts is not yet clear as commodity price spikes stemming from geopolitical tensions, including those from the war in Ukraine and the conflict in Middle East could, along with persistent core inflation, raise interest rate expectations. Financial market expectations of US policy rate reductions this year have been pared back significantly.

The US dollar (DXY) remained strong in the wake of resilient economic growth and hawkish Fed policy commentary. Global equity markets ended the financial year on a high with strongest performance since 2019, led by a bull run in major markets such as the US, India and Japan on the prospect

of monetary easing, robust profitability of large corporates and the anticipated productivity gains related to artificial intelligence. With Russia on sanctions, war in Middle East and production cuts by OPEC+, Crude prices remained volatile.

India seized global spotlight, emerging as the fastest growing major economy of the world in 2023-24 coupled with navigating diplomatic challenges with finesse. India's economic activity exhibited resilience with GDP growth for FY 2023-24 pegged at 7.6%, buoyed by strong domestic demand and backed by robust macroeconomic fundamentals.

The upturn in the investment cycle, broad-based revival in manufacturing and services sectors and Government's capex push aided growth. Consumer price inflation (CPI) dropped to 5.4% from 6.7% in previous year on account of base effect, normal monsoon and supply side interventions. The RBI Monetary Policy Committee kept the policy repo rate unchanged at 6.5% since its last rate hike in February

2023.    Bank credit growth remained robust with improving economic activity, increasing by 16.3% (y-o-y) as at March

2024.    Corporate Borrowing Costs generally hardened, amidst tightening of liquidity conditions.

The Indian Rupee largely remained rangebound, depreciating by 1.4% during the year, due to strong macroeconomic fundamentals and improvements in India's external position with the moderation in the current account deficit (CAD), revival of capital flows, and rising foreign exchange reserves. India's foreign exchange reserves hit a record high of US$ 645.6 billion on 29^th March, 2024. Net FPI inflows at US$ 41.6 billion in 2023-24 were the highest since 2015-16.

Amidst the aforesaid backdrop, the Bankers continue to rate your Company as a prime customer and extend facilities/ services at prime rates. Your Company follows a prudent financial policy and aims not to exceed an optimum financial gearing at any time. The Company's Gross Debt to Equity Ratio is 0.03 as at 31^st March, 2024. Further, your Company continued to focus on managing cash efficiently and ensured that it had adequate liquidity and back-up lines of credit. During the year, your Company raised short term trade finance of Rs. 650 crores under RBI's interest equalization scheme. Sufficient liquidity prompted pre-repayment of some of the long term borrowings. Further, during the year, your Company repaid/prepaid Rs. 3,712.16 crores of long-term borrowings whilst maintaining an optimum liquidity level of Rs. 16,469 crores as at 31^st March, 2024.

Further, your Company has been rated by CRISIL Ratings Limited ("CRISIL"), ICRA Limited ("ICRA"), India Ratings and Research Private Limited ("India Ratings") and CARE Ratings Limited

("CARE") for its Banking facilities. All have re-affirmed the highest credit rating for your Company's Short-Term facilities. For Long Term facilities and Non-Convertible Debentures, CRISIL, ICRA, CARE and India Ratings have re-affirmed their credit ratings of CRISIL AAA/Stable, [ICRA]AAA (stable), CARE AAA; Stable, and IND AAA/Stable for the respective facilities rated by them. With the above rating affirmations, your Company continues to enjoy the highest level of rating from all Major Rating Agencies at the same time.

The AAA rating indicates the highest degree of safety regarding timely servicing of financial obligations and is also a vote of confidence reposed in your Company's Management by the rating agencies. It is an acknowledgement of the strong credit profile of your Company over the years, resilience in earnings despite cyclical upturns/downturns, robust financial flexibility arising from the significant market value of its holdings and prudent management.

Your Company is a "Large Corporate" as per the criteria specified under Securities and Exchange Board of India ("SEBI") Operational Circular No. SEBI/HO/DDHS/P/CIR/2021/613 dated 10^th August, 2021, as amended from time to time. The Company has complied with the provisions of the said Circular and has made required disclosures in this regard.

Redemption of Non-Convertible Debentures

As mentioned in the previous Annual Report, during the year under review, your Company has fully redeemed the following Unsecured Listed, Rated Redeemable Non-Convertible Debentures ("NCDs") issued on private placement basis on the due dates or as per the respective terms of issue:

Particulars of NCDs	ISIN	Amount (in Rs.)	Issue date	Date of Redemption
M&M 6.65% -10,000 Debentures of Rs. 10,00,000 each	INE101A08096	1,000 crores	20th April, 2020	20th April, 2023 (Redeemed upon Maturity as per the terms of the issue)
M&M 6.78% -10,000 Debentures of Rs. 10,00,000 each	INE101A08104	1,000 crores	24th April, 2020	24th April, 2023 (Redeemed upon Maturity as per the terms of the issue)
M&M 6.19% -500 Debentures of Rs. 10,00,000 each	INE101A08112	500 crores	8th June, 2020	8th June, 2023 (redeemed prior to Maturity pursuant to Put Option exercised by all the Debenture holders to redeem the NCDs as per the terms of the issue.)

Investor Relations (IR)

Your Company always believes in striving hard to achieve excellence and leading from the front with adhering to best practices in IR while maintaining a relationship of trust with investors and analysts.

In the Financial Year 2024, your Company increased its interaction with investors through various conferences and conducted inperson individual, group, video and audio conference calls. The leadership, including the Managing Director and Chief Executive Officer, ED & CEO - Auto & Farm Sector, Group CFO and Head Group Strategy spent significant time interacting with investors to communicate the strategic direction for the business, capital allocation policy, plan for scaling up growth gems, various ESG activities undertaken by the Group and addressing investor/ analyst queries and concerns.

During the year, your Company interacted with more than 1,000 Indian and Foreign investors and analysts (excluding quarterly earnings calls, analyst meets and specific event related meets). All events hosted in the Financial Year 2024 including quarterly earnings calls, analyst meets, product launch events, etc. were well attended by investors and analysts.

Your Company ensures that critical information about the Company is available to all the investors by uploading all such information on the Company's website.

Dividend

As per the Dividend Distribution Policy, dividend payout would have to be determined based on available financial resources, investment requirements and taking into account optimal shareholder return. Within these parameters, the Company would endeavour to maintain a total dividend pay-out ratio in the range of 20% to 35% of the annual standalone Profits after Tax (PAT) of the Company.

Your Directors, considering the good performance and a strong cash flow, decided to recommend a Dividend of Rs. 21.10 (422%) per Ordinary (Equity) Share of the face value of Rs. 5 each out of the Profits for the Financial Year ended 31^st March, 2024.

The Equity Dividend Outgo for the Financial Year 2023-24 would absorb a sum of Rs. 2,623.85 crores resulting in a payout of 24.48% of the standalone net profit of the Company for the Financial Year 2023-24 [as against Rs. 2,020.73 crores comprising the dividend of Rs. 16.25 per Ordinary (Equity) Share of the face value of Rs. 5 each resulting in a payout of 25.33% for the previous year]. Dividend will be payable subject to approval of Members at the ensuing Annual General Meeting and deduction of tax at source to those Shareholders whose names appear in the Register of Members as on the Book Closure Date. The Board of your Company decided not to transfer any amount to the General Reserve for the year under review.

Dividend Distribution Policy

The Dividend Distribution Policy containing the requirements mentioned in Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") is attached as Annexure I and forms part of this Annual Report.

The Dividend Distribution Policy of the Company is also uploaded on the Company's website at the following Web-link:    https://www.mahindra.com/investor-relations/policies-

and-documents.

B. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company, its subsidiaries, associates and joint ventures prepared in accordance with the Companies Act, 2013 and applicable Indian Accounting Standards along with all relevant documents and the Auditors' Report form part of this Annual Report. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiaries, associates and joint ventures.

The Consolidated Revenue from operations is Rs. 1,38,279 crores in the current year as compared to Rs. 1,21,269 crores in the previous year, registering an increase of 14%.

The consolidated profit before exceptional items, share of profit of associates and joint ventures and tax for the year is Rs. 14,856 crores as against Rs. 11,305 crores in the previous year, registering an increase of 31.4%. The consolidated profit after tax after non-controlling interest and exceptional items for the year is Rs. 11,269 crores as against Rs. 10,282 crores in the previous year, registering an increase of 9.6%.

The Financial Statements as stated above are also available on the website of the Company and can be accessed at the Web-link: https://www.mahindra.com/resources/FY24/ AnnualReport.zip.

Subsidiaries, Joint Ventures and Associate Companies

The Mahindra Group entities continue to play a pivotal role in driving the overall revenue growth and performance of your Company.

Tech Mahindra Limited, Flagship Company in the IT Sector, reported a consolidated operating revenue of Rs. 51,996 crores in the current year as compared to Rs. 53,290 crores in the previous year, registering a decrease of 2.4%. Its consolidated profit after tax after non-controlling interests

is Rs. 2,358 crores as compared to Rs. 4,831 crores in the previous year, registering a decrease of 51.2%.

The Group's finance company, Mahindra & Mahindra Financial Services Limited, a listed subsidiary of the Company (Mahindra Finance), reported a consolidated operating revenue of Rs. 15,797 crores during the current year as compared to Rs. 12,700 crores in the previous year, registering an increase of 24.4%. The consolidated profit after tax after non-controlling interests for the year is Rs. 1,933 crores as compared to Rs. 2,072 crores in the previous year, registering a decrease of 6.7%.

Mahindra Lifespace Developers Limited, a listed subsidiary in the business of real estate and infrastructure, reported a consolidated operating revenue of Rs. 212 crores as compared to Rs. 607 crores in the previous year, registering a decrease of 65.1%. The consolidated profit after tax after non-controlling interest for the year is Rs. 98 crores as compared to Rs. 101 crores in the previous year, registering a decrease of 3%.

Mahindra Holidays & Resorts India Limited, a listed subsidiary in the business of timeshare, registered a consolidated operating revenue of Rs. 2,705 crores as compared to Rs. 2,517 crores in the previous year, registering an increase of 7.5%. The consolidated profit after tax after non-controlling interests for the year is Rs. 116 crores as compared to Rs. 115 crores in the previous year, registering an increase of 0.9%.

Mahindra Logistics Limited, a listed subsidiary in the logistics business, reported a consolidated operating revenue of Rs. 5,506 crores as compared to Rs. 5,128 crores in the previous year registering an increase of 7.4%. The consolidated loss after tax after non-controlling interests for the year is Rs. 55 crores as compared to a profit of Rs. 26 crores in the previous year, registering a decrease of 311.5%.

Swaraj Engines Limited, a listed subsidiary in the business of manufacturing of Diesel Engines and its components, reported operating revenue of Rs. 1,419 crores as compared to Rs. 1,422 crores in the previous year registering a decrease of 0.2%. The profit after tax for the year is Rs. 138 crores as compared to Rs. 134 crores in the previous year, registering an increase of 3%.

During the year under review, Mahindra Last Mile Mobility Limited, Illuminate Hybren Private Limited (formerly known as Icarus Hybren Private Limited), Hazel Hybren Private Limited, Gelos Solren Private Limited, Furies Solren Private Limited, Kyros Hybren Private Limited, Jade Hybren Private Limited,

Layer Hybren Private Limited, Migos Hybren Private Limited and ZipZap Logistics Private Limited have become Subsidiaries of your Company.

During the year under review, MSPL International DMCC, Gipps Aero Pty Ltd, GA8 Airvan Pty Ltd, GA200 Pty Ltd, Nomad TC Pty Ltd, Airvan 10 Pty Ltd, Airvan Flight Services Pty Ltd, Megasolis Renewables Private Limited (formerly known as Mahindra Renewables Private Limited), Mega Suryaurja Private Limited, Astra Solren Private Limited, Neo Solren Private limited, Brightsolar Renewable Energy Private Limited, Emergent Solren Private Limited, Mahindra Mexico S. de. R. L., V-Link Automotive Services Private Limited, V-Link Fleet Solutions Private Limited and Kiinteisto Oy Vierumaen Kaari have ceased to be subsidiaries of your Company.

Further, Mahindra Waste To Energy Solutions Limited ceased to be a wholly owned subsidiary of your Company and became an Associate of your Company during the year under review. Subsequently, name of Mahindra Waste To Energy Solutions Limited has been changed to Blue Planet Integrated Waste Solutions Limited.

Subsequent to year end, Mahindra North American Technical Centre, Inc has been merged with Mahindra Automotive North America Inc. and ceased to be a subsidiary of your Company.

Subsequent to year end, Neon Hybren Private Limited, Orion Hybren Private Limited, Pulse Hybren Private Limited, Quest Hybren Private Limited became subsidiaries of your Company.

During the year under review, Sanyo Special Steel Manufacturing India Private Limited, CIE Automotive India Limited (formerly known as Mahindra CIE Automotive Limited) and Zoomcar Inc. have ceased to be Associates of your Company.

Further, during the year, Icarus Hybren Private Limited has changed its name to Illuminate Hybren Private Limited.

A Report on the performance and financial position of each of the subsidiaries, associates and joint venture companies included in the Consolidated Financial Statements and their contribution to the overall performance of the Company, is provided in Form AOC-1 and forms part of this Annual Report.

The Policy for determining material subsidiaries as approved by the Board is uploaded on the Company's

website and can be accessed in the Governance section at the Web-link: https://www.mahindra.com/investor-relations/ policies-and-documents.

C. JOINT VENTURES, ACQUISITIONS AND OTHER MATTERS

Mahindra Electric Automobile Limited

During the year, your Company entered into a Securities Subscription and Shareholders' Agreement with Jongsong Investments Pte Ltd ("Temasek") and Mahindra Electric Automobile Limited ("MEAL"). Pursuant to the above, Temasek agreed to invest Rs. 1,200 crores in MEAL in one or more tranches in the form of Compulsory Convertible Preference Shares ("CCPS") at a valuation of upto Rs. 80,580 crores, resulting in an ownership in the range of 1.49% to 2.97% for Temasek in MEAL. The said investment also envisages Temasek subscribing to 100 Equity Shares in MEAL. Part of the investment by Temasek in CCPS of MEAL was completed during the year.

Further, as indicated in the previous year's Annual Report, on 26^th September, 2023, 100 Equity Shares of MEAL of face value of Rs. 10 per share were allotted to British International Investment Plc ("BII") at a premium of Rs. 4.50 per share, for an aggregate cash consideration of Rs. 1,450.

Consequently, MEAL ceased to be a Wholly Owned Subsidiary of the Company but continues to be a subsidiary of the Company. Besides the 100 Equity Shares as mentioned above, BII and BII India EV LLP, a BII related party ("BII India") also hold 1,20,00,000 Compulsorily Convertible Preference Shares (CCPS) of Rs. 1,000 each.

Induction of Financial Partners in the Last Mile Mobility Business

During the year, Mahindra Last Mile Mobility Limited ("MLMML") was incorporated as a wholly owned subsidiary of the Company. Subsequently, the Company entered into an Asset Transfer Agreement and a Business Transfer Agreement with MLMML, for transfer of identified Assets and Business pertaining to the Last Mile Mobility Business of the Company to MLMML.

The Company invested an amount of Rs. 860 Crores by way of Subscription to a Rights Issue of Equity Shares of MLMML, the proceeds of which were also utilized towards discharge of consideration for the Asset Transfer and Business Transfer from the Company.

Pursuant to the Subscription Agreement and Shareholders Agreement entered into by the Company with International Finance Corporation ("IFC") on 22^nd March, 2023, IFC agreed to invest upto Rs. 600 Crores in CCPS of the newly formed company i.e. MLMML, in one or more tranches.

Accordingly, during the year, IFC was allotted 30,00,000 CCPS of MLMML, for an aggregate consideration of Rs. 300 crores. Consequent to the above, MLMML ceased to be a wholly owned subsidiary of the Company with effect from 9^th October, 2023, while it continues to be a subsidiary of the Company.

The Company also entered into an Amended and Restated Shareholders' Agreement and a Subscription Agreement on 11^th January, 2024, with India Japan Fund ("IJF"), a fund managed by National Investment and Infrastructure Fund Limited ("NIIF"), whereby IJF agreed to invest Rs. 400 crores in CCPS of MLMML, at a valuation of upto Rs. 6,600 crores, in one or more tranches. During the year, IJF was allotted 20,00,000 CCPS of MLMML, for an aggregate consideration of Rs. 200 crores.

Strategic Partnership in Renewables Business and Listing of Infrastructure Investment Trust (InvIT)

In furtherance of your Company's partnership with Ontario Teachers' Pension Plan Board ("OTPP"), 2452991 Ontario Limited ("2OL"), a wholly owned subsidiary of OTPP, exercised its option to increase its stake by 9.99% in Mahindra Susten Private Limited ("MSPL") and in Emergent Solren Private Limited ("ESPL"), by entering into a Share Purchase Agreement with Mahindra Holdings Limited ("MHL"), a wholly owned subsidiary of your Company. Consequent to this transaction, MHL holds 60.01% stake and 2OL holds 39.99% stake in MSPL and ESPL.

As part of the partnership with OTPP, it was also envisaged to form an InvIT to unlock value in the Renewable Energy Sector through a series of transactions during the year.

First, the undertaking pertaining to Solar Power Business

i.e. two solar projects in MSPL aggregating to ~360 MWp portfolio, was demerged into Emergent Solren Private Limited ("ESPL") by way of a Scheme of Arrangement, sanctioned by the Mumbai Bench of the National Company Law Tribunal ("NCLT"), between MSPL, ESPL, and their respective shareholders and creditors ("the Scheme"). The Scheme was sanctioned by NCLT with the Appointed Date as the Effective Date i.e. 1^st September, 2023.

Subsequent to the demerger, to meet regulatory compliance requirements, your Company acquired 58,64,835 Equity Shares of ESPL from MHL, constituting 60.01% of the paid-up equity share capital of ESPL.

During the year, Sustainable Energy Infra Trust ("SEIT") was registered as an InvIT with SEBI, with MSPL and 2726522 Ontario Limited, a wholly owned subsidiary of OTPP ("Ontario") as the Co-Sponsors, and Sustainable Energy Infra Investment Managers Private Limited ("IM") was incorporated as the Investment Manager to SEIT.

Further, your Company and MSPL executed Share Purchase Agreements with IM, SEIT, Axis Trustee Services Limited (Trustee to SEIT), 2OL and ESPL, and subsequently sold their entire stakes in ESPL, Megasolis Renewables Private Limited ("MRPL") (including its subsidiaries Astra Solren Private Limited, Neo Solren Private Limited and Bright Solar Renewable Energy Private Limited, hereinafter referred to as "MRPL Subsidiaries") and Mega Suryaurja Private Limited ("MSUPL") to SEIT. In consideration, SEIT allotted its units to your Company and MSPL. Consequent to the sale, ESPL, MSUPL, MRPL and MRPL Subsidiaries ceased to be subsidiaries of your Company and consequent to the unit allotment, your Company and MSPL held 15.7% and 73.9% stake in SEIT respectively, prior to the Initial Offer to domestic and foreign institutional investors.

As part of the Initial Offer through Private Placement of units of SEIT by way of Offer for Sale of INR 8,978 Million by MSPL and a Primary Issue, the pre-offer stake held by your Company and MSPL in SEIT was diluted to 10.5% and 15% respectively post-offer. The Offer was subscribed by marquee global and Indian investors, including OTPP and Asian Infrastructure Investment Bank (AIIB).

By way of these transactions, your Company, in partnership with OTPP, set up, co-sponsored and listed India's largest pureplay renewable energy InvIT to focus on the growth of the renewable energy sector in India at scale.

Induction of OTPP, the Financial Partner in Mahindra Teqo Private Limited

During the year, Mahindra Teqo Private Limited ("MTPL"), wholly owned subsidiary of Mahindra Sustainable Energy Private Limited ("MSEPL", formerly known as Mahindra Telecom Energy Management Services Private Limited), which is a wholly owned subsidiary of the Company, entered into a Share Subscription Agreement ("SSA") with 2726522 Ontario Limited ("Ontario"), a wholly owned subsidiary of OTPP and Shareholders Agreement ("SHA") with Ontario and MSEPL.

Pursuant to the SSA, Ontario subscribed to 25,000 Equity Shares of MTPL for a consideration of Rs. 35 crores representing 20% of the post-issue capital of MTPL. The primary investment in MTPL enables value unlocking and scaling up of MTPL, which is in the operation and asset management business of renewable energy assets.

Induction of New Investors and fund raise by Existing Shareholders in Classic Legends Private Limited

During the year, Classic Legends Private Limited ("CLPL"), a subsidiary of the Company, executed Securities Subscription Agreement and Amended & Restated Shareholders' Agreement ("Agreements") with the Company, Existing Shareholders of CLPL and New Investors, setting out the terms and conditions of proposed investment of Rs. 875 crores in CLPL.

The proposed investment will be made by way of subscription to CCPS and Equity Shares of CLPL, out of which the Company has agreed to invest Rs. 525 crores and the balance Rs. 350 crores will be invested by Existing Shareholders and New Investors in tranches over the next 2-3 years as per the terms and conditions stipulated in the Agreements.

CLPL will use the proposed investment of Rs. 875 crores to build a strong business that leverages the strengths of your Company and its partners. Part of the proposed investment was completed during the financial year.

Merger of Mahindra Heavy Engines Limited, Mahindra Two Wheelers Limited and Trringo. Com Limited with the Company

The Board of Directors of your Company at its meeting held on 4^th August, 2023, subject to requisite approvals/consents, approved the Scheme of Merger by Absorption of Mahindra Heavy Engines Limited ("MHEL") and Mahindra Two Wheelers Limited ("MTWL") and Trringo.com Limited ("TCL"), wholly owned subsidiaries of the Company, with the Company and their respective shareholders ("Scheme") under sections 230 to 232 and other applicable provisions of the Companies Act, 2013, with the Appointed Date of the Scheme as 1^st April, 2023 or such other date as may be directed or approved by the National Company Law Tribunal, Mumbai Bench ("NCLT") or any other appropriate authority. On completion of the merger, entire assets and liabilities of MHEL, MTWL and TCL would be transferred to and recorded by the Company at their carrying values. Additionally, no shares of the Company shall be allotted in lieu or exchange of the holding of the Company in MHEL,

MTWL and TCL (held directly and jointly with the nominee shareholders) and accordingly, equity shares held in MHEL, MTWL and TCL shall stand cancelled on the Effective Date without any further act, instrument or deed.

The NCLT has pronounced an Order on 7^th May, 2024 allowing the Scheme and a certified copy of the Order was received on 15^th May, 2024.

Acquisition of stake in RBL Bank Limited

During the year, your Company acquired 2,11,43,000 equity shares of RBL Bank Limited ("RBL") representing 3.53% of the paid-up share capital of RBL, at a consideration of approximately Rs. 417 crores.

Divestment of Stake in Gipps Aero Pty Limited and other subsidiaries of Mahindra Aerospace Australia Pty Limited

During the year, Mahindra Aerospace Australia Pty Limited ("MAAPL"), a wholly owned subsidiary of Mahindra Aerospace Private Limited ("MAPL") and a step down subsidiary of your Company, has sold its entire stake in Gipps Aero Pty Ltd, GA8 Airvan Pty Ltd, GA200 Pty Ltd, Nomad TC Pty Ltd, Airvan 10 Pty Ltd and Airvan Flight Services Pty Ltd, wholly owned subsidiaries of MAAPL (collectively referred to as "MAAPL Subsidiaries") to Mr. George Morgan, former founder of Gippsland Aeronautics Pty Ltd. and a Director on the Board of MAAPL Subsidiaries. Following the completion of the aforementioned sale, MAAPL subsidiaries have ceased to be the subsidiaries of MAAPL and that of MAPL and your Company.

Divestment of Stake in Mahindra Marine Private Limited

During the year, the trustees of Sunrise Initiatives ("Sunrise Trust") agreed to sell its entire stake in Mahindra Marine Private Limited ("MMPL") i.e. 81.58% of the Paid-Up Equity Share Capital of MMPL to its JV Partner i.e. Ocean Blue Boating Private Limited ("Ocean Blue") and its nominee(s). Your Company is the sole beneficiary of Sunrise Trust and thus, MMPL was a subsidiary of the Company under the Indian Accounting Standards (IndAS) and consequent to the aforesaid sale, MMPL has ceased to be a subsidiary of the Company under IndAS with effect from 5^th June, 2023. MMPL, being a non-core loss making subsidiary of the Company, Sunrise Trust evaluated various options to exit the business via sale or closure of the same. The option of sale to the existing JV Partner was found appropriate and most

feasible as the latter option of closure would have entailed further capital infusion in the business and as such, sale to the JV Partner was concluded.

Sale of stake held by the Company in Sanyo Special Steel Manufacturing India Private Limited (formerly known as Mahindra Sanyo Special Steel Private Limited)

As mentioned in the previous Annual Report, your Company during the year, sold its entire stake of 34,75,264 Equity Shares of Rs. 10 each in Sanyo Special Steel Manufacturing India Private Limited (formerly known as Mahindra Sanyo Special Steel Private Limited) (SSSMIPL) constituting 22.81% of the paid-up share capital of SSSMIPL pursuant to exercise of a Put Option available to the Company on Sanyo under the Shareholders' Agreement. Post this sale, SSSMIPL has ceased to be an Associate of the Company.

Sale of stake held by the Company in CIE Automotive India Limited (formerly known as Mahindra CIE Automotive Limited)

As mentioned in the previous Annual Report, your Company during the year, sold its entire stake of 1,21,22,068 Equity Shares of Rs. 10 each in CIE Automotive India Limited (formerly known as Mahindra CIE Automotive Limited) (CIE India) constituting 3.195% of the paid-up share capital of CIE India. Post this sale, the Company does not have any equity interest in CIE India and has ceased to be a Promoter of CIE India.

Sale of stake held by the Company in Blue Planet Integrated Waste Solutions Limited (formerly known as Mahindra Waste To Energy Solutions Limited)

As mentioned in the previous Annual Report, your Company during the year sold 2,40,00,000 Equity Shares of Rs. 10 each in Blue Planet Integrated Waste Solutions Limited (formerly known as Mahindra Waste To Energy Solutions Limited) (BPIWSL) constituting 80% of the paid-up share capital of BPIWSL to Blue Planet Environmental Solutions Pte Ltd (BPES). Following the sale, the Company's holding in BPIWSL has reduced to 20% and BPIWSL ceased to be a subsidiary of the Company and has become an Associate.

D. INTERNAL FINANCIAL CONTROLS

The Corporate Governance Policies guide the conduct of affairs of your Company and clearly delineate 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.

Your Company's Financial Statements are prepared on the basis of the Significant Accounting Policies that are carefully selected by Management and approved by the Audit Committee and the Board. These Accounting policies are reviewed and updated from time to time.

Your Company uses SAP ERP Systems as a business enabler and to maintain its Books of Account. The transactional controls built into the SAP ERP Systems ensure appropriate segregation of duties, appropriate level of approval mechanisms and maintenance of supporting records. The Policies related to the Information Management reinforce the control environment. The systems, Standard Operating Procedures and controls are reviewed by Management. These systems and controls are subjected to Internal Audit and their findings and recommendations are reviewed by the Audit Committee which ensures the implementation.

Your Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations. Your Company's Internal Financial Controls were deployed through Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), that addresses material risks in your Company's operations and financial reporting objectives.

Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by The Institute of Chartered Accountants of India. Based on the results of such assessments carried out by the Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls were observed.

Your Company recognizes that the Internal Financial Controls cannot provide absolute assurance of achieving financial, operational and compliance reporting objectives because of its inherent limitations. Also, projections of any evaluation of the Internal Financial Controls to future periods are subject to the risk that the Internal Financial Controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.

In response to a cyber-attack on 16^th March, 2024, the Company took swift action to mitigate the impact and restore affected systems. The Company investigated the matter of cyber attack and concluded that there is no significant impact on the operations and financial statements of the Company on account of this incident.

E.    MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of your Company's performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

F.    RELATED PARTY TRANSACTIONS

The Company has in place a robust process for approval of Related Party Transactions and Dealing with Related Parties.

As per the process, necessary details for each of the Related Party Transactions as applicable along with the justification are provided to the Audit Committee in terms of the Company's Policy on Materiality of and Dealing with Related Party Transactions and as required under SEBI Master Circular dated 11^th July, 2023. The Material Related Party Transactions approved by the Members of the Company are also reviewed / monitored on quarterly basis by the Audit Committee of the Company as per Regulation 23 of the Listing Regulations and Section 177 of the Companies Act, 2013.

All Related Party Transactions entered during the year were in the ordinary course of business and on arm's length basis.

During the year under review, your Company has entered into Material Related Party Transactions as previously approved by the Members under Regulation 23 of the Listing Regulations. The Company also proposes to modify the

limits of certain existing Material Related Party Transactions and also intends to enter into new Material Related Party Transactions for which the approval of Members is being sought.

The Company has not entered into Material Related Party Transactions as per the provisions of the Companies Act, 2013 and a confirmation to this effect as required under section 134(3)(h) of the Companies Act, 2013 is given in Form AOC-2 as Annexure II, which forms part of this Annual Report.

The Policy on Materiality of and Dealing with Related Party Transactions as approved by the Board is uploaded on the Company's website and can be accessed in the Governance section at the Web-link: https://www.mahindra.com/investor-relations/policies-and-documents.

G. AUDITORS

Statutory Auditors and Auditors' Report

Messrs B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration Number 101248W/W-100022) were re-appointed as the Statutory Auditors of the Company to hold office for a second term of 5 years from the conclusion of the 76^th Annual General Meeting (AGM) held on 5^th August, 2022 until the conclusion of the 81^st AGM of the Company to be held in the year 2027.

The Auditors' Report for FY 2023-24 is unmodified i.e. it does not contain any qualification, reservation, adverse remark or disclaimer.

Secretarial Auditor

Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Sachin Bhagwat, Practicing Company Secretary (Certificate of Practice Number: 6029) to undertake the Secretarial Audit of the Company.

The Company has annexed to this Board's Report as Annexure III, a Secretarial Audit Report for the Financial Year 2023-24 given by the Secretarial Auditor.

The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

Annual Secretarial Compliance Report

The Company has undertaken an audit for the Financial Year 2023-24 for all applicable compliances as per SEBI Regulations and Circulars / Guidelines issued thereunder. The Annual Secretarial Compliance Report duly signed by Mr. Sachin Bhagwat has been submitted to the Stock Exchanges and is annexed at Annexure IV to this Board's Report.

Secretarial Audit of Material Unlisted Indian Subsidiary

There is no Material Unlisted Indian Subsidiary of the Company as on 31^st March, 2024 and as such the requirement under Regulation 24A of the Listing Regulations regarding the Secretarial Audit of Material Unlisted Indian Subsidiary is not applicable to the Company for the Financial Year 2023-24.

Cost Auditors

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 2023-24.

The Board of Directors on the recommendation of the Audit Committee, appointed Messrs D. C. Dave & Co., Cost Accountants (Firm Registration Number 000611), as the Cost Auditors of the Company for the Financial Year 2024-25 under section 148 of the Companies Act, 2013. Messrs D. C. Dave & Co. have confirmed that their appointment is within the limits of section 141(3)(g) of the Companies Act, 2013 and have also certified that they are free from any disqualifications specified under section 141(3) and proviso to section 148(3) read with section 141(4) of the Companies Act, 2013.

The Audit Committee has also received a Certificate from the Cost Auditors certifying their independence and arm's length relationship with the Company.

As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking Members' ratification for the remuneration payable to Messrs D. C. Dave & Co., Cost Auditors is included in the Notice convening the Annual General Meeting.

Cost Records

As per section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014, your Company is required to maintain cost records and accordingly, such accounts and records are maintained.

Reporting of Frauds by Auditors

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.

H.    PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES

Particulars of the loans given, investment made or guarantee given or security provided and the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient of the loan or guarantee or security are provided in Note Nos. 8 and 43 to the Financial Statements.

I.    PUBLIC DEPOSITS AND LOANS / ADVANCES

Your Company had discontinued acceptance of Fixed Deposits with effect from 1^st April, 2014.

All the deposits from public and shareholders had already matured as on 31^st March, 2017. Out of these, 5 deposits aggregating Rs. 0.84 lakhs from the public and shareholders as on 31^st March, 2024 had matured and had not been paid at the end of the Financial Year as there is a restraining order from the Court / Tribunal/ Statutory Authority. Since then, no deposits 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.

The particulars of loans / advances / investments, etc., required to be disclosed pursuant to Para A of Schedule V of the Listing Regulations are furnished separately in this Annual Report.

The transaction(s) of the Company with a company belonging to the promoter / promoter group which hold(s) more than 10% shareholding in the Company as required pursuant to Para A of Schedule V of the Listing Regulations are disclosed separately in the Financial Statements of the Company.

J. EMPLOYEES

Key Managerial Personnel (KMP)

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

(a)    Dr. Anish Shah - Managing Director and Chief Executive Officer

(b)    Mr. Rajesh Jejurikar - Executive Director and CEO (Auto and Farm Sector)

(c)    Mr. Manoj Bhat - Group Chief Financial Officer (Upto close of 16^th May, 2024)

(d)    Mr. Amarjyoti Barua - Group Chief Financial Officer (with effect from 17^th May, 2024)

(e)    Mr. Narayan Shankar - Company Secretary

Employees' Stock Option and Employees' Welfare Schemes

During the year under review, based on the recommendation of the Governance, Nomination and Remuneration Committee (GNRC) of your Company, the Trustees of Mahindra & Mahindra Employees' Stock Option Trust have granted Stock Options to employees under the Mahindra & Mahindra Limited Employees Stock Option Scheme 2010. No Stock Options have been granted to employees under the Mahindra & Mahindra Limited Employees Stock Option Scheme 2000 (2000 Scheme).

The Company has in force the following Schemes which get covered under the provisions of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SBEB Regulations 2021):

1.    Mahindra & Mahindra Limited Employees Stock Option Scheme - 2000 (2000 Scheme)*

2.    Mahindra & Mahindra Limited Employees Stock Option Scheme - 2010 (2010 Scheme)

3.    M&M Employees Welfare Fund No. 1

4.    M&M Employees Welfare Fund No. 2

5.    M&M Employees Welfare Fund No. 3

* No outstanding options as on 31^st March, 2024 and as such the 2000 Scheme is no longer in force.

There are no changes made to the above Schemes during the year under review and these Schemes are in compliance with the SBEB Regulations 2021. Your Company's Secretarial Auditor, Mr. Sachin Bhagwat, has certified that the Company's above-mentioned Schemes have been implemented in accordance with the SBEB Regulations 2021, and the Resolutions passed by the Members for the 2000 Scheme and the 2010 Scheme.

Information as required under Regulation 14 read with Part F of Schedule I of the SBEB Regulations 2021 has been uploaded on the Company's website and can be accessed at the Web-link: https://www.mahindra.com/resources/FY24/ AnnualReport.zip.

Particulars of Employees and related disclosures

The Company had 646 employees who were in receipt of remuneration of not less than Rs. 1,02,00,000 during the year ended 31^st March, 2024 or not less than Rs. 8,50,000 per month during any part of the year.

Details of employee remuneration as required under provisions of section 197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be made available during 21 days before the Annual General Meeting in electronic mode to any Shareholder upon request sent at [e-mail]. Such details are also available on your Company's website and can be accessed at the Web-link: https://www.mahindra.com/resources/FY24/ AnnualReport.zip.

Disclosures with respect to the remuneration of Directors, Key Managerial Personnel (KMPs) and employees as required under section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure V to this Report.

Industrial Relations

The year under review witnessed a very positive Industrial Relations Scenario across all manufacturing locations for the Automotive and Farm Equipment Sectors.

Your Company's focus continues towards propagating proactive and employee centric practices. Various initiatives that aim to create an engaged workforce with an innovative, productive and a competitive shop-floor ecosystem continues to grow in strength.

Some of the initiatives that are put in place includes, Development of Self-Managed Team, Employee of the year, Reward and Recognition for associates, i4-idea generation program, etc. Further, the programs on Code of Conduct, Prevention of Sexual Harassment (POSH), Anti-Bribery and Anti-Corruption (ABAC) and Human Rights are made mandatory to ensure appropriate behaviour and governance. The Employee Relations Council is dedicated towards building a positive Work Culture, leading the design and implementation of these programs and review of its progress periodically.

With the objective of capability building, developing future ready workforce and fostering togetherness at the workplace, your Company implements multiple training and engagement programs on an ongoing basis. These include various behavioural and functional programs such as Behavioural based safety, quality tools, TPM, Personal Presence and programs on current and future skill such as Robotics, Mechatronics, Auto Electric Diagnostics, Electric Vehicle Technology, etc. Automotive Skills Development Council (ASDC) certification program for selected Trainees were also on offer. In its continuous endeavour to improve the employee experience, your Company has been implementing multiple digital initiatives viz: automation of Training Portal to enable self-paced learning during this fast-paced work environment and manage punching to billing for contract Labours through integrated Contract Labour Management System (CLMS).

The Mahindra Skill Excellence initiative, a holistic approach to enhance the skill and capabilities of shop floor associates, is receiving good participation across manufacturing facilities. Total 3,032 associates across AFS participated for MSE competition during the year.

In an endeavour to improve quality, reduce cost, ensure safety and improve productivity, your Company's shop floor associates managed to generate on an average 11.1 ideas per person in the Financial Year 2024.

This year, significant emphasis was also laid towards raising awareness on health and wellness of employees in addition to regular annual medical check-ups and health awareness activities. Diet food has become a way of life. The Company maintains an 'Employee Health Index' at an individual level, and this has been a useful tool in identifying employees who require focussed counselling and monitoring.

Proactive and employee-centric shop floor practices, a focus on transparent communication of business goals, an effective concern resolution mechanism, and a firm belief that employees are the most valuable assets of the Company, are the cornerstone of your Company's employee relations approach. An 'open door policy' with constant dialogue to create win-win situations, have helped your Company build trust and harmony.

The industrial relations scenario continued to be largely positive across all the manufacturing locations. Bonus settlements were closed amicably for all the plants. The sustained efforts towards building a progressive work culture resulted in zero production loss in the Financial Year 2023-24 and helped create a collaborative, healthy and productive work environment.

Safety, Occupational Health and Environment

Your Company has in place the Safety, Occupational Health & Environment (SOH&E) Policy. During the year under review, the Company started all external physical assessments along with Integrated Management System (IMS) certifications as per the following standards, ISO: 9001: 2015, ISO: 14001: 2015 & ISO: 45001: 2018, Re-certification of which is an ongoing process.

The management commitment towards SOH&E is demonstrated by adopting all relevant amendment updates (including all notifications published) and incorporating them in mCompliance portal. The Company implemented various initiatives by incorporating senior management periodic reviews. All new Emission Norms as specified by the Government were followed through revised notifications and guidelines complying to overall health and hygiene parameters. The overall manufacturing conditions and their status were assessed through periodic monitoring and measurement exercised by external authorized agencies.

At manufacturing locations, various annual events like Road Safety Week, National Safety Day / Month and Fire Service Week, Energy Conservation Week, Sustainability Day were celebrated.

The training programs were leveraged with new topics by introducing sustenance in safety with virtual reality (V.R.) programs for competency building which were deployed to train employees. VR dexterity training was implemented for welding, sealer, and paint applications. Critical attributes i.e., Learning Agility, Decision making, and Safety at Workplace training were completed.

Personal Presence training program for Associates, Skill Competitions, Self-Motivated Teams (SMT's) development, Basic Hygiene Sensitization Program for Females, Behavioral Based Training for all Associates, Mandatory Training Programs i.e. POSH, Human Rights, ABAC, Code of Conduct (COC) were covered.

In Safety, Health and Environment competency building followed by on-the-job training (OJT) were arranged for Associates through Mahindra skill excellence competitions, i.e. i-4 Rise to create value competitions, Mechatronics, Welding, Painting & CNC Machining, etc. training programs were arranged for Associates. Special focus is given on safety and fire safety by introducing assessment of 360 degree machine guarding supporting safety index.

The Company continues to focus on safety best practices, by conducting Safety observation tours (SoT), monthly themes on safety topics arising out of OHS risks. Horizontal deployment followed by immediate corrective actions (ICA) as well as permanent corrective actions (PCA) are implemented and reviewed by top management. There has been a reduction in the rate of overall Reportable and Non-Reportable Injuries over previous year. Further, Zero Fire incidence, First Aid cases Reduction were achieved in F24. Monthly theme-based Safety drives were initiated. All monthly themes were revised and were well participated which was appreciated by all Associates and officers. Safe Employee of the Month for Associates on shop was also recognised.

Vigorous drive to eliminate overall at-risk behaviours is conducted by exercising Behavior Based Safety (BBS) Level 2. In order to reduce fire risk, your Company introduced additional fire alarm and detection system in stores area for strengthening fire protection system to eliminate property losses. Monthly results were monitored by reviewing office fire (prevention and protection) systems. Fire load reduction is monitored by setting up revised targets and working towards sustenance of zero fire incidence across each manufacturing location in every Sector.

All locations are supported and protected by administrative control with the help of Auto glow signages and painting / marking.

Your Company has followed pattern defined by Central Safety Council (CSC) of Mahindra and Mahindra Group of Companies by establishing a Cross Functional Team (CFT). This year's focus was provided on significant high hazard non-routine activities in the assessment of The Mahindra Safety Way (TMSW). Total 25 parameters are assessed and evaluated stage-wise covering all Sectors for the Mahindra Group companies across all the plants. Upgraded plants which qualified with improved results were declared for rewards in the Mahindra Rise Awards function. A repeated virtual training program was arranged on the topic - "Fire Safety @ Home" on the occasion of Diwali festival for the employees of Mahindra Group Companies and

their families with an objective to create awareness among employees and their family regarding Fire, Fire hazards and associated Risks till its Mitigation process.

Your Company has maintained on-site, off-site plan and disaster management plan with adoption of change process, Gap audits are carried out for Risk evaluation of business and its critical designated license storage areas. These were audited by competent persons authorized by respective governing authorities for its applicable compliances. The Company has exercised Statutory Safety, Occupational Health and Environmental, Fire Safety, Electrical Safety Audits, Water Audit, FSSAI Audit under Food Testing under FSSI Act. During the year under review, your Company achieved substantial improvements in the percentage of results of Safety index and Fire Safety index by adopting new initiatives. There was a focused drive undertaken on critical processes and operations.

To eliminate and minimize the overall environmental impact in line with the "Environmental, Social and Governance" (ESG) practices, your Company has continuously implemented new projects. By revising the objectives, newer revised targets were taken. New techniques used in various projects have been implemented by your Company in achieving reduction in carbon emission, waste avoidance/minimization. Reduction in Carbon footprint by implementing new kaizens in energy conservation and improving share of renewable energy was achieved. Energy cost was saved through implementation of BLDC fan, standalone AC in Assembly lines, Esmart LED lights, etc.

The Company had put up a Heath and Wellness Stall on the occasion of the Founders Day. Awareness in the supplier community was created to encourage suppliers' consultation and participation in order to enable them to overcome current and future business risks.

During the year under review, your Company started reporting the implementation status under Extended Producer Responsibility Organizations (EPRO) with existing set targets established by Central Government i.e., Central Pollution Control Board by way of release of new list of commodities under Extended Producers' Responsibility (EPR) notifications on Plastic, Tyres and Batteries. Plastic elimination and recyclable packaging material in maximum number of spares have been initiated by substituting the material, as appropriate. Plastic waste management activities covering pan-India network were developed for plastic waste recycling management across all the Company's manufacturing plants.

Your Company implemented various water neutrality initiatives and achieved recycling by processing STP water through RO thereby achieving reduced consumption of freshwater. Through these implementation measures, a marked improvement has been observed in ground water level.

Your Company continued its commitment to improve the well-being of employees and contract Associates through the monthly Health theme. Various activities, Education and awareness sessions were conducted by arranging Panel Discussions and webinars on various topics i.e., General health, Awareness and new updates, Work Stress Management, Revive your Passion for work and Session on Absenteeism.

Programs are being conducted by renowned faculties for Mahindra family members such as Mass Blood PressureScreening Camp, Fibro Scan of Liver and BCA Analysis Camp, Tea Table Talk Demonstration of Stretching and Relaxation Exercises for Mental Wellbeing, World Heart Day celebrations followed by Health Talk By Cardiologist, World Mental Health Day Street Play, Diabetic Retinopathy and Peripheral Neuropathy Camp, Benign Prostatic Hypertrophy and Prostate Cancer Camp, individual Physiotherapist Consultation, International Yoga Day Celebration.

Additionally, the Company has initiated Nutrition Month to improve health at the operational stages working towards fat elimination at workplace and attended to Diabetic and Hypertension issues among Associates by consultation, diet and exercise. The Company provided food items with overall focus on Oil Consumption per plate, which got reduced.

Mahindra Master Chef, on-the-spot salad making competition was organized for Officers and Associates. The objective behind the competition was to inculcate healthy food habits and awareness regarding the choice of food. The participant's creativity was revealed through the beautiful designs and patterns formed with different mouth-watering recipes. Inner Wellness Program and Webinar on Healthy Diet and Nutritional Plan in consultation with Nutritionist were organised.

The Company has also initiated Mahindra Cricket League for Men and Women to encourage physical fitness at workplace.

First aid refresher training programs were organised for employees and Associates, Videos were created to improve the dexterity and posture of employees at shop floor.

During the year, Breast and Cervical Cancer awareness and screening camp for Women and program on Gynaecology Consultation, Health Talk - "Turn the Clock" for all employees and their family members, were arranged. Robust implementation of compliance by providing awareness on Bio-medical Waste Disposal Management is continuously monitored.

In collaboration with technical committee formed by Government of Maharashtra for mitigation of air pollution in Mumbai City, a project was performed on Bus Roof Mounted Detachable Air Purification Unit retrofit on BEST Buses through the Company's CSR initiatives.

The Company aims at increasing awareness for environment protection amongst all stakeholders by celebrating World Ozone Day, World Environment Day, World Earth Day, World Water Day and Energy Conservation Week and Water Conservation Week, etc. on an annual basis.

The Total Recordable Frequency Rate (TRFR) was 0.07 accidents per million hours worked in Financial Year 2023-24 as compared to 0.10 in the last fiscal year.

Certifications/Recertifications

All Plants of your Company have undergone Surveillance Audits and were certified for Standard ISO 45001: 2018 and ISO 14001: 2015. Further, all Plants have implemented Integrated Management System (IMS). Your Company is re-certified for Zero Waste to Landfill with 99% and above conversion rate which ensures the commitment of recycling of waste at maximum extent to protect the environment.

The Senior Management revises and reviews the SOH&E performance periodically. Focus on new initiatives involving all stakeholders coupled with management reviews have helped your Company to demonstrate further step towards excellence in SOH&E performance.

k. board & committees

Sad Demise of Mr. Keshub Mahindra, Chairman Emeritus of the Company

As mentioned in the previous Annual Report, Mr. Keshub Mahindra, Chairman Emeritus, Mahindra Group passed away on 12^th April, 2023. He was a renowned humanitarian who reshaped ethical corporate practices in India. He was an outstanding diplomat and had an invaluable presence in the Indian business sector, admired for his foresight, his business expertise, his leading through demonstration, and most importantly, for his unwavering professional honesty.

Mr. Keshub Mahindra will remain a source of inspiration for all within the Mahindra Group.

Directors

CP Gurnani

The Board of Directors at its Meeting held on 10^th November, 2023 noted the resignation of Mr. CP Gurnani (DIN: 00018234) as Non-Executive Non-Independent Director of the Company with effect from 20^th December, 2023 coinciding with his retirement as Managing Director and CEO at Tech Mahindra Limited.

Mr. CP Gurnani (popularly known as CP) joined the Board of your Company on 1^st April, 2020. CP always believed that business should serve a higher purpose and was an embodiment of the Rise philosophy. He brought an entrepreneurial flair to the business that added great value.

Vijay Kumar Sharma

The Board at its Meeting held on 10^th November, 2023 also noted the resignation of Mr. Vijay Kumar Sharma (DIN: 02449088) as Non-Executive Non-Independent Director of the Company with effect from 20^th December, 2023 on account of withdrawal of his nomination by Life Insurance Corporation of India upon attaining the age of 65 years.

Mr. Sharma joined the Board of your Company on 14^th November, 2018. He enriched the discussions at the Board with his inputs that added valuable consumer insights and were replete with foresight.

Vishakha Desai

Subsequent to the year end, Dr. Vishakha Desai (DIN: 05292671) ceased to be an Independent Director of the Company with effect from 1^st May, 2024, on completion of her second term upon attaining the age of 75 years. Dr. Desai was initially appointed as Director on the Board of your Company on 30^th May, 2012. She was appointed for a first term of 5 consecutive years as Independent Director from 8^th August, 2014 and subsequently re-appointed for a second term commencing from 8^th August, 2019 to 30^th April, 2024.

Dr. Vishakha Desai enriched the discussions at the Board Meeting with a global perspective on matters that came before the Board. Her contributions and guidance, particularly in the area of CSR, were much appreciated by the Board.

The Board has placed on record its deep appreciation of the invaluable services rendered by Mr. Gurnani, Mr. Sharma and Dr. Desai during their tenure as Non-Executive Directors of the Company.

Vikram Singh Mehta

Mr. Vikram Singh Mehta's (DIN:00041197) second term as an Independent Director will end on 7^th August, 2024. He joined the Board of your Company on 30^th May, 2012. He was appointed as a Lead Independent Director with effect from 1^st April, 2021. As a Chairman of the Governance, Nomination and Remuneration Committee, Mr. Mehta played a vital role in steering the Succession Planning, Compensation Framework and Talent Rotation within the Mahindra Group.

His financial acumen, global mindset and high ethical standards coupled with his expertise in deciphering operational and financial data greatly facilitated strategic decision making at the Board level. The Board is deeply appreciative of his valuable contributions.

Appointment of Directors

Based on the recommendation of the GNRC, the Board of Directors at its Meeting held on 14^th February, 2024, inter alia, considered and approved with effect from 17^th May, 2024, the appointment of:

1.    Ms. Padmasree Warrior (DIN: 10387032) as an Additional Director (Independent and Non-Executive) to hold office as an Independent Director for a term of 5 (five) consecutive years upto 16^th May, 2029;

2.    Mr. Ranjan Pant (DIN: 00005410) as an Additional Director (Non-Executive and Non-Independent), liable to retire by rotation; and

3.    Mr. Sat Pal Bhanoo (DIN: 10482731) as an Additional Director (Non-Executive and Non-Independent) representing Life Insurance Corporation of India, liable to retire by rotation.

Brief Profiles of Ms. Padmasree Warrior, Mr. Ranjan Pant and Mr. Sat Pal Bhanoo are provided in the Corporate Governance Report forming part of the Annual Report.

Ms. Padmasree Warrior, Mr. Ranjan Pant and Mr. Sat Pal Bhanoo are not debarred from holding the office of director on account of any order of SEBI or any other such authority.

The Company has received the requisite Notices from a Member in writing proposing their appointment as Directors of the Company.

Re-appointment of Two Independent Directors for a Second Term

The GNRC, on the basis of performance evaluation of Mr. Haigreve Khaitan and Ms. Shikha Sharma and taking into account the external business environment, the business knowledge, acumen, experience and the substantial contribution made by them during their tenure, has recommended to the Board that the continued association of Mr. Haigreve Khaitan and Ms. Shikha Sharma as Independent Directors would be beneficial to the Company.

Based on the above and their performance evaluation, the Board at its Meeting held on 16^th May, 2024 has recommended the re-appointment of Mr. Haigreve Khaitan and Ms. Shikha Sharma as Independent Directors for a Second Term of 5 consecutive years commencing from 8^th August, 2024 to 7^th August, 2029. The Company has received the requisite Notices from a Member in writing proposing their appointment as Independent Directors.

Re-appointment of Dr. Anish Shah, Managing Director and Chief Executive Officer to be Designated as "Group CEO and Managing Director" and Mr. Rajesh Jejurikar, Executive Director and CEO (Auto and Farm Sector)

Pursuant to the recommendation of the GNRC, the Board at its Meeting held on 16^th May, 2024, approved the following:

1.    Re-appointment of Dr. Anish Shah as the "Managing Director and Chief Executive Officer" Designated as "Group CEO and Managing Director" of the Company with effect from 1^st April, 2025 to 31^st March, 2030 (both days inclusive), liable to retire by rotation.

2.    Re-appointment of Mr. Rajesh Jejurikar as a Whole Time Director designated as 'Executive Director and CEO (Auto and Farm Sector)' of the Company, for a period commencing from 1^st April, 2025 to 24^th June, 2029 (both days inclusive), liable to retire by rotation.

Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and Listing Regulations.

The Board is of the opinion that the Independent Directors of the Company hold highest standards of integrity and possess requisite expertise and experience required to fulfil their duties as Independent Directors.

In terms of section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by Indian Institute of Corporate Affairs, Manesar ("NCA").

The Independent Directors are also required to undertake online proficiency self-assessment test conducted by IICA within a period of 2 (two) years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption.

The Independent Directors of the Company are exempt from the requirement to undertake online proficiency self-assessment test except Mr. Muthiah Murugappan who has successfully completed the online proficiency self-assessment test.

Lead Independent Director

Mr. Vikram Singh Mehta, Independent Director, Chairman of Governance, Nomination and Remuneration Committee and Chairman of Corporate Social Responsibility Committee (with effect from 1^st May, 2024) is the Lead Independent Director. The role and responsibilities of the Lead Independent Director are provided in the Corporate Governance Report forming part of this Annual Report.

Retirement by rotation

Dr. Anish Shah retires by rotation and being eligible, offers himself for re-appointment at the 78^th Annual General Meeting of the Company scheduled to be held on 31^st July, 2024.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 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 including Independent Directors, Chairman of the Board, Managing Director & Chief Executive Officer and Executive Director and CEO (Auto and Farm Sector).

Feedback Mechanism

Feedback was sought by way of a structured questionnaire covering various aspects of the Board's functioning such as adequacy of time spent on strategic issues, effectiveness of Governance practices, setting corporate culture and values, execution and performance of specific duties, obligations and governance. The performance evaluation was carried out based on the responses received from the Directors.

Evaluation of Committees

The performance evaluation of Committees was based on criteria such as structure and composition of Committees, attendance and participation of member of the Committees, fulfilment of the functions assigned to Committees by the Board and applicable regulatory framework, adequacy of time allocated at the Committee Meetings to fulfil duties assigned to it, adequacy and timeliness of the Agenda and Minutes circulated, comprehensiveness of the discussions, effectiveness of the Committee's recommendation for the decisions of the Board, etc.

Evaluation of Directors and Board

A separate exercise was carried out by GNRC 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 Board was also carried out by the Independent Directors, taking into account the views of the Executive Directors and NonExecutive Directors. The performance evaluation of the Managing Director and the Executive Director of the Company was carried out by the Chairman of the Board and other Directors.

Criteria for Independent Directors

The performance evaluation of Independent Directors was based on various criteria, inter alia, including 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, ability to maintain independence, etc.

Performance Evaluation indicators for Independent Directors include contributing to and monitoring Corporate Governance Practices, introduce International Best Practices to address

Business Challenges and Risks and Participation in Long Term Strategic Planning.

Criteria for Chairman

The performance evaluation of Chairman of the Board was based on various criteria, inter alia, including style of Chairman's leadership, effective engagement with other Board members during and outside the meetings, allocation of time provided to other Board members at the meetings, effective engagement with shareholders during general meetings, etc.

Criteria for Managing Director and Executive Director

The performance evaluation of Managing Director and Executive Director was based on various criteria, inter alia, including standards of integrity, fairness and transparency demonstrated, identification of strategic targets, anticipation of future demands and opportunities, resource staffing to meet short term and long term goals, engagement with Board members, updating Board on significant issues, commitment to organisational values, vision and mission, adaptation to meet changing circumstances, knowledge and sensitivity of stakeholders' needs within and outside the Company.

Results of Evaluation

The results of the Evaluation for the year under review were shared with the Board, Chairman of respective Committees and individual Directors. The results of Evaluation showed high level of commitment and Engagement of Board, its various Committees and Senior leadership.

As part of the outcome of the Performance Evaluation exercise it was noted that the Board is Independent, operates at a high level of Governance Standards and is committed to creating value for all stakeholders.

It was also noted that the Meetings of the Board are well planned and run effectively by the Chair, its Committees are managed well and continue to perform on their respective focus areas of Governance and Internal Controls.

As part of the Company's annual strategy planning process, the Company organised a Strategy Offsite with the Board to deliberate on various topics related to strategic planning, progress of ongoing strategic initiatives, risks to strategy execution and the need for new strategic programs to achieve the Company's long-term objectives.

The evaluation outcomes for the year under review were thoroughly deliberated upon with the Board Members,

Committee Chairpersons, and individual Directors. The results underscore a good level of dedication and engagement exhibited by the Board, its various Committees, and senior leadership.

A notable revelation from the Performance Evaluation is the Board's evident independence, coupled with a steadfast adherence to stringent governance standards, all aimed at augmenting value creation for stakeholders.

Moreover, it is noteworthy that the Board meetings are meticulously planned and conducted with efficiency under the guidance of the Chair. The Committees have also demonstrated a good level of management and performance in their respective areas of focus, particularly in governance and internal controls.

Based on the outcome of the performance evaluation for the year under review, the Board has agreed to maintain the High Standards of Governance, Visibility and Interaction in the coming years.

The Directors expressed their satisfaction with the Evaluation process. During the year under review, GNRC ascertained and reconfirmed that the deployment of "questionnaire" as a methodology, is effective for evaluation of performance of the Board and Committees and Individual Directors.

Policies

Your Company has adopted the following Policies which, inter alia, include criteria for determining qualifications, positive attributes and independence of a Director:

(a)    Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management; and

(b)    Policy for remuneration of the Directors, Key Managerial Personnel and other employees.

Policy (a) mentioned above includes the criteria for determining qualifications, positive attributes and independence of a Director, identification of persons who are qualified to become Directors and who may be appointed in the Senior Management Team in accordance with the criteria laid down in the said Policy, succession planning for Directors and Senior Management, and Policy statement for Talent Management framework of the Company.

Policy (b) mentioned above sets out the approach to Compensation of Directors, Key Managerial Personnel and other employees in the Company.

Policies mentioned at (a) and (b) above are available on the website and can be accessed in the Governance section at the Web-link: https://www.mahindra.com/investor-relations/ policies-and-documents.

Familiarisation Programme for Independent Directors / Non-Executive Directors

The Members of the Board of the Company are afforded many opportunities to familiarise themselves with the Company, its Management and its operations. The Directors are provided with all the documents to enable them to have a better understanding of the Company, its various operations and the industry in which it operates.

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.

Independent Directors meet the business and functional heads and provide their inputs and suggestions on strategic and operational matters at the quarterly Board/Committee Meetings.

Executive Directors and Senior Management provide an overview of the operations and familiarize the new Non-Executive Directors on matters related to the Company's values and commitments. They are also introduced to the organization structure, constitution of various committees, board procedures, risk management strategies, etc.

Strategic Presentations are made to the Board where Directors get an opportunity to interact with Senior Management. Directors are also informed of the various developments in the Company through Press Releases, emails, etc.

During the Financial Year 2024, the Board offsite was held from 17^th March, 2024 to 19^th March, 2024, at Mahindra Research Valley and at the Mahindra SUV proving track in Chennai.

As part of the Company's annual strategy planning process, the Company organised a management strategy offsite with the Board to deliberate on various topics related to strategic planning, progress of ongoing strategic initiatives, risks to strategy execution and the need for new strategic programs to achieve the Company's long-term objectives.

This serves the dual purpose of providing the Board members a platform to bring their expertise to various strategic

initiatives, while also providing an opportunity for them to understand detailed aspects of execution and challenges relating to the specific theme.

In summary, through this process, Members of the Board get a comprehensive and balanced perspective on the strategic issues facing the Company, the competitive differentiation being pursued by the Company, and an overview of the execution plan.

In addition, this event allows Board members to interact closely with the senior leadership of the various business segments of the Company and its Subsidiaries.

The Company has a web based portal i.e. Board portal, accessible to all the Directors which, inter alia, contains the following information:

•    Roles, responsibilities and liabilities of Directors under the Companies Act, 2013 and the Listing Regulations

•    Board Minutes, Agenda and Presentations

•    Annual Reports

•    Code of Conduct for Directors

•    Terms and conditions of appointment of Independent Directors.

Pursuant to Regulation 25(7) of the Listing Regulations, the Company imparted various familiarisation programmes for its Directors including periodic review of Investments of the Company at Strategic Investment Committee Meetings, Regulatory updates, Industry Outlook, Business Strategy at the Board Meetings and changes with respect to the Companies Act, Taxation and other matters, Listing Regulations, Framework for Related Party Transactions, etc. at the Audit Committee Meetings, Economic Environment & Global Scenario, Frontier Risks, Business Entity Risks, etc. at the Risk Management Committee Meetings, Products Launch and Showcase of New Vehicles, etc. The details as required under Regulations 46 and 62(1A) of the Listing Regulations are available on the website of your Company at the web link: https://www.mahindra.com/resources/FY24/AnnualReport.zip.

Directors' Responsibility Statement

Pursuant to section 134(5) of the Companies Act, 2013, your Directors, based on the representations received from the Operating Management and after due enquiry, confirm that:

(a)    in the preparation of the annual accounts for the Financial Year ended 31^st March, 2024, the applicable accounting standards have been followed;

(b)    they had in consultation with Statutory Auditors, selected accounting policies and applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2024 and of the profit of the Company for the year ended on that date;

(c)    they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and irregularities;

(d)    they have prepared the annual accounts on a going concern basis;

(e)    they have laid down adequate Internal Financial Controls to be followed by the Company and such Internal Financial Controls were operating effectively during the Financial Year ended 31^st March, 2024;

(f)    they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively throughout the Financial Year ended 31^st March, 2024.

Board Meetings and Annual General Meeting

A calendar of Meetings is prepared and circulated in advance to the Directors.

During the year 1^st April, 2023 to 31^st March, 2024, nine Board Meetings were held on: 26^th May, 2023, 7^th July, 2023, 26^th July, 2023, 4^th August, 2023, 15^th September, 2023, 9^th and 10^th November, 2023, 2^nd February, 2024, 14^th February, 2024 and 18^th and 19^th March, 2024. The 77^th Annual General Meeting (AGM) of the Company was held on 4^th August, 2023 through Video Conferencing / Other Audio Visual Means.

Meetings of Independent Directors

The Independent Directors of your Company often meet before the Board Meetings without the presence of the Chairman of the Board or the Managing Director or the Executive Director or other Non-Independent Directors or Chief Financial Officer or any other Management Personnel.

These Meetings are conducted in an informal and flexible manner to enable the Independent Directors to discuss matters pertaining to, inter alia, 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.

Audit Committee

The Audit Committee comprises of the following Directors viz. Mr. T. N. Manoharan (Chairman of the Committee), Ms. Shikha Sharma, Mr. Vikram Singh Mehta and Mr. Haigreve Khaitan.

Subsequent to the year end, the Board at its Meeting held on 16^th May, 2024, re-constituted the Audit Committee with effect from 8^th August, 2024 and appointed Mr. Muthiah Murugappan as a Member in place of Mr. Vikram Singh Mehta upon completion of his tenure on 7^th August, 2024. Post the re-constitution with effect from 8^th August, 2024, the Audit Committee would comprise of four Directors viz. Mr. T. N. Manoharan (Chairman of the Committee), Ms. Shikha Sharma, Mr. Haigreve Khaitan and Mr. Muthiah Murugappan.

All the Members of the Committee are Independent Directors and possess strong accounting and financial management knowledge. The Company Secretary of the Company is the Secretary of the Committee.

All the recommendations of the Audit Committee were accepted by the Board.

L. GOVERNANCE Corporate Governance

Your Company possesses a profound heritage of ethical governance practices, many of which were established by the Company even prior to their legal enforcement. Your Company remains dedicated to transparency in all its transactions and places significant importance on business ethics.

Your Company continued to feature in the 'Leadership' category in the Corporate Governance Scorecard 2023

which is developed by Institutional Investor Advisory Services India Limited ("IiAS") with support from International Finance Corporation ("IFC") and BSE Limited ("BSE").

A Report on Corporate Governance along with a Certificate from the Statutory Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Schedule V of the Listing Regulations forms part of this Annual Report.

Compliance Management

The Company has adopted a compliance management tool viz. mCompliance Portal which provides system-driven alerts to the respective owners for complying with the applicable laws and regulations. Certificates capturing the compliance status of all laws and regulations applicable to the Company are generated at the end of each quarter and submitted by the Managing Director to the Board.

Ethics Framework

The Company's revised Code of Conduct (the Code) for employees outlines the commitment to the principles of integrity, transparency, and fairness. It enables the Company and its employees to make the right choices and demonstrate the highest standards of integrity and ethical behaviour.

The Ethics & Governance framework is also anchored by clearly defined policies and procedures, covering areas such as Anti-Bribery and Anti-Corruption Policy (ABAC), Policy on Gifts & Entertainment (G&E), Policy on Prevention of Sexual Harassment at Workplace (POSH), Whistle-Blower Policy (WB), Business Partner Code of Conduct and Supplier Code of Conduct to ensure robust Corporate Governance.

The Code of Conduct and all the Company's policies are accessible on the Company's website; in the Governance section at the Web-link: https://www.mahindra.com/investor-relations/policies-and-documents and on the Rise@Work, the Company's intranet as well as on the mobile app Me-connect.

New joiners are mandatorily required to undertake e-learning modules on the Code, POSH and ABAC. In addition to this, an Annual Compliance Declaration Module is mandated for the employees.

In order to achieve regular reinforcement of the Code and policies across the Company; the Ethics program has the support of 145 Ethics Counsellors who help the Company to amplify the values which the Company stands for and

facilitate regular conversations and training with their cohorts. The Ethics Counsellors are trained by subject matter experts (internal/ external) on ethics and policies throughout the year. During the year, they have trained approximately 4,000 employees across various geographies on the Code and policies related to ABAC, G&E, POSH and WB. Further, your Company has driven sensitisation on the Code and other ethics policies vide ethical guidelines, emailers, videos, standees and posters across locations.

The Company's Vigil mechanism process is clearly defined for identifying and resolving breaches related to the Code of Conduct and the Company's Ethics Policies. It is regularly communicated throughout the Company vide the 'Speak Up campaign'. Data relating to such breaches is reviewed by the Corporate Governance Council and the Audit Committee that helps in determining the allocation of resources for future policy development, any review of policies, process improvement, training and awareness initiatives. The Corporate Governance Council ensures that the Ethics & Governance framework is executed effectively. The Group Ethics and Governance Committee and Business Ethics and Governance Committees help to ensure decisions on substantiated cases are taken in a fair, just and consistent manner across various functions of that business.

Vigil Mechanism

The Vigil Mechanism as envisaged in the Companies Act, 2013 read with the Rules prescribed thereunder, and the Listing Regulations is implemented through the Company's WhistleBlower Policy. The Whistle-Blower Policy of your Company is available on the Company's website and can be accessed in the Governance section at the Web-link: https://www.mahindra. com/investor-relations/policies-and-documents.

It enables the Directors, employees and all stakeholders of the Company to report genuine concerns (about unethical behaviour, actual or suspected fraud, or violation of the Code) and provides for adequate safeguards against victimisation of persons who use such mechanism and makes provision for direct access to the Chairman of the Audit Committee.

A quarterly report on the whistle-blower complaints, as received, is placed before the Audit Committee for its review.

During the year, the Company received 85 whistle-blower complaints out of which 70 complaints were investigated and appropriate actions were taken and investigations were underway for the remaining 15 complaints. All complaints are tracked and monitored on timely basis.

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has Zero Tolerance towards sexual harassment at the workplace. A detailed POSH Policy is in place as per the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("Act"). The POSH Policy of the Company is available on the website of the Company and can be accessed in the Governance section at the Web-link: https://www.mahindra. com/investor-relations/policies-and-documents. The POSH Policy is also available in 8 vernacular languages. All employees (permanent, contractual, temporary, trainees) as defined under the Act are covered in this Policy. The POSH Policy is gender inclusive and the framework ensures complete anonymity and confidentiality.

Internal Complaints Committees ("IC") have been constituted to redress complaints of sexual harassment and the Company has complied with the provisions relating to the constitution of IC under the Act. While maintaining the highest governance norms, IC are constituted for various locations. Half of the total members of the IC are women. The external members with requisite experience in handling such matters are also part of the IC. The IC is presided over by a senior woman employee in each case. Inquiries are conducted and recommendations are made by the IC at the respective locations. The IC is updated on judicial trends and trained regularly on the nuances of the Act.

During the fiscal year under review, 13 complaints alleging sexual harassment were filed and 11 were resolved by taking appropriate actions as per the provisions of the Act. 2 complaints are pending inquiry as of 31^st March, 2024. All complaints are tracked and monitored on timely basis.

Continuous awareness in this area has been created through the POSH campaign reiterating Mahindra's commitment to providing a safe workplace to all its employees. During the year, the Company organised sensitization and awareness programs vide inductions for new joiners, e-learning modules for all employees, trainees, associates including sending emailers, creating standees and posters to sensitise all employees to conduct themselves in a professional manner. Further, virtual and classroom training sessions were conducted by the Company's Ethics Counsellors.

Business Responsibility and Sustainability Report

SEBI vide its Notification dated 5^th May, 2021 had amended Regulation 34 of the Listing Regulations, wherein SEBI has mandated that Business Responsibility Report ("BRR") shall be discontinued after the Financial Year 2021-22 and thereafter, with effect from the Financial Year 2022-23, the Top 1,000 listed entities based on market capitalization shall submit a Business Responsibility and Sustainability Report ("BRSR") in the format as specified by SEBI from time to time.

Further, SEBI vide its Circular dated 12^th July, 2023 has provided a format for BRSR Core (consisting of a set of Key Performance Indicators (KPIs)/metrics under 9 attributes) for reasonable assurance.

Top 150 listed entities based on market capitalization are mandatorily required to undertake reasonable assurance of BRSR Core for the Financial Year 2023-24.

The Company has prepared the BRSR for the Financial Year 2023-24 in accordance with the format as prescribed in the SEBI Circular dated 12^th July, 2023.

The BRSR is intended towards having quantitative and standardized disclosures on ESG parameters to enable comparability across companies, sectors and time. Such disclosures will be helpful for investors to make better investment decisions. The BRSR shall also enable companies to engage more meaningfully with their stakeholders, by encouraging them to look beyond financials and towards social and environmental impacts.

The BRSR of your Company for the Financial Year 2023-24 forms part of this Annual Report as required under Regulation 34(2)(f) of the Listing Regulations.

Your Company strongly believes that sustainable and inclusive growth is possible by using the levers of environmental and social responsibility while setting aspirational targets and improving economic performance to ensure business continuity and rapid growth.

Your Company is committed to leverage 'Alternative Thinking' to build competitive advantage in achieving high shareholder returns through customer centricity, innovation, good governance and inclusive human development while being sensitive to the environment.

Risk Management

Your Company has a well-defined risk management framework in place. The risk management framework works at various levels across the enterprise. These levels form the strategic defence cover of the Company's risk management. The Company has a robust organizational structure for managing and reporting on risks.

Your Company has constituted a Risk Management Committee of the Board which is authorized to monitor and review risk management plan and risk certificate. The Committee is also empowered, inter alia, to review and recommend to the Board 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 include review of risks and Risk Management Policy at periodic intervals.

Your Company has developed and implemented a Risk Management Policy which is approved by the Board. The Risk Management Policy, inter alia, includes identification of risks, including cyber security and related risks and also 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 organization.

M. CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY

Corporate Social Responsibility (CSR)

At Mahindra dedication to Corporate Social Responsibility (CSR) has remained steadfast from its inception. Your Company's purpose, "Drive positive change in the lives of our communities. Only when we enable others to rise

will we rise," serves as the guiding light.

With this ethos, your Company's CSR vision endeavours to create a more equal world by empowering girls, empowering women and contributing to environmental conservation. These focus areas are aligned with the Company's ESG goals and contribute to nation-building.

For the last two decades, your Company has been empowering underprivileged girls in India through Project Nanhi Kali. The Project provides educational support to girls studying in Government schools from Class 1 to 10, enabling them to successfully complete their schooling.

There is an urgent need to address the steadily declining female labour force participation rate in the country, making it a top national priority. Your Company aspires to be the lead catalyst in enabling women's economic empowerment by providing them with essential skills training and unlocking employment opportunities across industries.

Your Company's commitment to preserving the planet for citizens of the future can be seen through a variety of environmental conservation initiatives which include tree plantation, water conservation and further supporting the livelihood of marginalised farmers.

The impact of some of the CSR projects your Company invested in for Financial Year 2023-24 are shown below:

A.    Empower Girls

Project Nanhi Kali supported the education of 2,31,692 underprivileged girls in Financial Year 2024. 1,71,162 girls attended the classes on every school day at 6,743 Academic Support Centres in 19 districts across 8 states of India. Mahindra Group supported 73,698 girls and of these, your Company supported 49,440 girls. To align with the recommendations of the National Education Policy, Project Nanhi Kali introduced Digital Equalizer for Girls (DEFG), a training program for adolescent girls. In Financial Year 2024, over 60,530 additional girls were trained under this initiative across 6 states. Of these, Mahindra Group supported 38,756 girls and your Company supported 24,213 girls.

Since inception, Project Nanhi Kali has supported the education of 6,94,557 underprivileged girls.

B.    Empower Women

Since inception, the Women's Empowerment initiative at Mahindra Group has impacted 7,65,107 women, symbolising a steadfast dedication to fostering women's advancement. In Financial Year 2024, this initiative empowered 2,28,540 women who underwent various skilling interventions as shown below:

Employability Skilling: In Financial Year 2024, a total of 1,79,862 women underwent employability-focused skills training under this initiative. The Mahindra Group's flagship employability skilling program, Mahindra Pride Classrooms (MPC) provides digital and life skills training focused on communication and critical thinking, thereby making the candidates more "job-ready" and employable. The training is provided to women who are studying in final year in Government/ Government-aided colleges, ITIs, and Polytechnic Institutes at a Pan-India level. In Financial Year 2024, the Mahindra Group supported 1,70,038 women studying in 1,711 colleges. Of these, 1,29,227 women were supported through your Company. An additional 9,824 women underwent employability skills training through another project under this initiative supported by your Company.

Domain Skilling: In Financial Year 2024, Mahindra Group trained 17,550 women majorly in the domains of automobile, IT, ITES/hospitality, healthcare, and apparel across 15 states. Of these 16,536 women were trained with support provided by your Company. This training contributed to the women securing jobs within these Sectors.

Agri Skilling:

Regenerative Agriculture: The main objective of this Project was to enable women farmers to use regenerative agriculture practices to improve soil fertility and increase productivity, ensuring food and nutrition security for their families, along with enhanced income levels. Through this Project sponsored by your Company, 25,046 women farmers from Moga and Tarn Taran in Punjab, Shravasti in Uttar Pradesh, and Wardha in Maharashtra were provided knowledge in regenerative farming practices. This intervention helped women farmers reduce their agriculture input costs and increase income from the sale of crops.

Farm Skilling: Under the farm skilling initiative of PRERNA, your Company continued to support 6,082 women farmers by training them in effective farming practices and providing them with advisory services which include soil health, access to gender-friendly farm equipment, linkages to Government welfare support initiatives, resource efficient agriculture methodologies, and increasing crop productivity.

C.    Environment Conservation Project Hariyali:

In Financial Year 2024, the Mahindra Group planted a total of 22,72,026 trees, of which your Company planted 17,96,051 trees. As a result of this Project, the livelihoods of 4,545 tribal farmer families were enhanced. 19 varieties of fruit, forest and shade trees were planted, further contributing to biodiversity, and improving the quality of soil and crops.

The farmers have received training in global organic farming protocols, which help rejuvenate the soil, enhance water retention, and increase soil organic carbon.

Since inception, under this initiative a total of 2,51,33,314 trees have been planted. Of these 1,64,28,207 have been planted in Araku, supporting the livelihoods of over 27,500 tribal farmer families.

Water Conservation:

I n Financial Year 2024, your Company supported 1,033 farmers through various interventions related to soil and water conservation, crop diversification and livelihood training/support initiatives contributing to integrated development of the rural catchment areas. Watershed Development Fund (WDF) Projects were undertaken in collaboration with NABARD in Igatpuri and Akole Block of Nashik and Ahmednagar District of Maharashtra, for the development of Kadva River Basin, covering around 20 villages. Apart from the above Project, your Company has worked in other geographies and deployed region-specific water management interventions covering 6 States.

Through all these initiatives, 505 water harvesting structures have been created and renovated, 5,219 lakh litres of water harvesting potential created, resulting in an increase in irrigation potential across 2,212 hectares. Cumulatively 15,126 hectares was covered under water management initiatives and 44,523 farmers and community members have benefitted through water conservation.

D.    Employee Volunteering

Beyond the core CSR focus areas, employee volunteering is an important part of giving back and enabling others to Rise.

Mahindra Group has a robust volunteering programme through the Employee Social Options (Esops) and MySeva

platforms. While Esops volunteering events are organised by Mahindra Group, MySeva recognises individual acts of social responsibility undertaken by Mahindra Group employees.

Employee volunteering initiatives encompass varied activities such as blood donation drives, tree plantation, cleanliness drives, health check-up camps, visits to Government schools, and diverse community engagement activities. Mahindra Group employees invested 3,28,677 person hours through Esops and 1,20,636 person hours were contributed through MySeva. Your Company's employees contributed 59,485 person hours towards a variety of social causes, of which 59,282 person hours were invested through Esops and 203 person hours were contributed through MySeva. The second edition of Mahindra Volunteering Day was held on 5^th December, 2023 wherein 12,183 enthusiastic volunteers contributed 33,345 person hours in various activities.

During the last Financial Year, your Company was

humbled to receive the following awards for its

contribution to society.

1.    All India Management Association (AIMA) - Project Hariyali was awarded the Runner Up Award at the 10^th Business Responsibility Summit and Project Excellence Contest & Recognition (August 2023)

2.    Brandon Hall Group Gold Award in the 'Best Initiative for Philanthropy and Corporate Giving' category for the Project Livelihood Generation through Farm Mechanization (August 2023)

3.    ' Best CSR Initiative' at ITOTY Awards for Project Hunnar (July 2023)

4.    10^th CSR Times Award by MOS Health & Family Welfare Government of India for Project Prerna (August 2023)

5.    Golden Peacock Award for Corporate Social Responsibility for Project Paani (December 2023)

6.    National Awards for Excellence in CSR & Sustainability under the category "Best CSR Impact Initiative" for Project Paani (September 2023)

7.    " CSR Excellence in Water Conservation & Management" category at India CSR & Sustainability Conclave for Project Green Guardian (September 2023)

8.    Global CSR Excellence & Leadership Award under the category of "Community Development" for Project Farm Mechanization (February 2024)

9.    Women Empowerment Award at the Global CSR Leadership Awards for Employability Enhancement Training Project (March 2024)

10.    Sat Paul Mittal Gold Award at the Sat Paul Mittal National Awards 2023 held in Ludhiana (November 2023)

11.    Project Nanhi Kali's film, Lajjo won several awards both nationally and internationally, spanning categories including CSR Campaign, Best Online Integrated Marketing, Viral Video and Casting and Performance.

CSR Policy

The Corporate Social Responsibility Committee had formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) which was subsequently adopted by it and is being implemented by the Company. The CSR Policy including a brief overview of the projects or programs undertaken by the Company can be accessed in the Governance section of the website, the link of the same is https://www.mahindra.com/investor-relations/policies-and-documents.

CSR Committee

The Board at its Meeting held on 18^th and 19^th March, 2024 re-constituted the Corporate Social Responsibility Committee (CSR Committee). Dr. Vishakha N. Desai ceased to be the Chairperson and Member of the Committee with effect from 1^st May, 2024, upon completion of her second term as an Independent Director of the Company and Mr. Vikram Singh Mehta was inducted in her place as Chairman of the CSR Committee.

The CSR Committee currently comprises of Mr. Vikram Singh Mehta (Chairman), Mr. Anand G. Mahindra, Dr. Anish Shah, and Mr. Muthiah Murugappan.

Subsequent to the year end, the Board at its Meeting held on 16^th May, 2024, re-constituted the CSR Committee by inducting Ms. Padmasree Warrior as a Member with effect from 17^th May, 2024 and appointed Mr. Muthiah Murugappan as the Chairman with effect from 8^th August, 2024 in place of Mr. Vikram Singh Mehta upon completion of his tenure on 7^th August, 2024. Post the re-constitution with effect from 8^th August, 2024, the CSR Committee would comprise of four Directors viz. Mr. Muthiah Murugappan (Chairman of the Committee), Mr. Anand Mahindra, Dr. Anish Shah and Ms. Padmasree Warrior.

The Committee, inter alia, reviews and monitors the CSR as well as Business Responsibility and Sustainability activities.

During the year under review, your Company spent Rs. 112.74 crores on CSR activities. The amount equal to 2% of the average net profit for the past three financial years required to be spent on CSR activities was Rs. 112.329 crores. The Board has considered the Impact Assessment Reports at its meeting held on 16^th May, 2024. The detailed Annual Report on the CSR activities undertaken by your Company in the Financial Year 2024 along with the Executive Summary for Impact Assessment Reports of the applicable projects, is annexed herewith and marked as Annexure VI.

The complete Impact Assessment Reports of the applicable projects can be accessed at the Web-link: https://www. mahindra.com/resources/FY24/AnnualReport.zip.

Sustainability

During the year under review, the 16^th Sustainability Report for the year 2022-23 was released. The Report was externally assured by KPMG and prepared in accordance with the GRI (Global Reporting Initiative) Standards.

Your Company plans to build a 'Planet Positive Mahindra' by focusing on three key pillars, greening ourselves, decarbonizing the industry and rejuvenating the nature. Under pillar greening ourselves, the Company focuses on enhancing use of renewable energy, improving energy and water productivity, embedding material circularity and ensures no waste goes to landfill. To decarbonize the industry, transition to electric vehicles and alternate fuels, enabling supply chain to follow environment friendly practices and end of vehicle recycling are major considered aspects. Beyond the industry boundary, to rejuvenate the nature, the Company aims regenerative farming, planting over million trees every year, investing in green technologies like solar, green buildings and micro irrigation. Group companies have set targets aligned to Planet Positive framework. The targets are discussed and reviewed in Group Sustainability Council chaired by Dr. Anish Shah, Managing Director and Chief Executive Officer.

ESG information of the Company has been disclosed under Dow Jones Sustainability Index (DJSI), Carbon Disclosure Project (CDP) and World Economic Forum's (WEF) stakeholder capitalism metrics.

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions/ events on these items during the year under review:

1.    Issue of equity shares with differential rights as to dividend, voting or otherwise.

2.    Issue of Shares (including Sweat Equity Shares) to employees of the Company under any Scheme save and except Employees Stock Option Schemes (ESOS) referred to in this Report.

3.    Significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and the Company's operation in future.

4.    Voting rights which are not directly exercised by the employees in respect of shares for the subscription/ purchase of which loan was given by the Company (as there is no scheme pursuant to which such persons can beneficially hold shares as envisaged under section 67(3)(c) of the Companies Act, 2013).

 

Your Company has committed to Science Based Target, an initiative to restrict average global temperature rise in alignment of Paris Climate Change Agreement. The Group is committed to become Carbon Neutral by 2040.

The Sustainability performance of your Company for the Financial Year 2023-24 will be elaborated in detail in the GRI Report which is under preparation and will be ready for release shortly.

Your Company was recognized for its leadership position on the ESG dimensions during the year under review, by way of:

•    Winner of Best ESG Company 2024 in the Automobile Category (Passenger & Commercial Vehicles), given by Dun & Bradstreet India.

•    Only automobile company globally disclosing Core & Expanded metrics as per WEF's Stakeholder Capitalism Metrics during the year 2023.

•    Part of Dow Jones Sustainability world & emerging market Indices, for the 3^rd consecutive year, only Indian automobile company to do so.

•    Felicitated by CDP as a part of Supplier Engagement Rating Leadership Board for the year 2023.

•    Inclusion in S&P Global Sustainability Yearbook 2024.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure VII and forms part of this Report.

N. SECRETARIAL Share Capital

During the year under review, the Authorised Share Capital of the Company stood at Rs. 12,681.5 crores divided into 2231,30,00,000 Ordinary (Equity) Shares of Rs. 5 each

and 25,00,000 Unclassified shares of Rs. 100 each and 150,00,00,000 Preference Shares of Rs. 10 each. There was no change in the Authorised Share Capital of the Company during the year under review.

The issued, subscribed and paid-up Share Capital of the Company stood at Rs. 621.76 crores divided into 124,35,28,831 Ordinary (Equity) shares of Rs. 5 each. There was no change in the issued, subscribed and paid-up Share Capital of the Company during the year under review.

Compliance with the provisions of Secretarial Standard 1 and Secretarial Standard 2

The applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to 'Meetings of the Board of Directors' and 'General Meetings' respectively, have been duly complied by your Company.

Annual Return

Pursuant to section 134(3)(a) and section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, a copy of the Annual Return is placed on the website of the Company and can be accessed at the Web-link: https://www.mahindra.com/ resources/FY24/ AnnualReport.zip.

O.    POLICIES

The details of the Key Policies adopted by the Company are mentioned at Annexure VIII to the Board's Report.

P.    PROCEEDINGS UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016)

There is one proceeding initiated / pending against your Company under the Insolvency and Bankruptcy Code, 2016 which does not materially impact the business of the Company. The Company would contest the matter based on its Merits.

Q.    GENERAL

Neither the Managing Director nor the Executive Director received any remuneration or commission from any of the subsidiaries of your Company.

5.    There has been no change in the nature of business of your Company.

6.    The Company has not made any one-time settlement for loans taken from the Banks or Financial Institutions, and hence the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof is not applicable.

7.    There was no revision of financial statements and Board's Report of the Company during the year under review.

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Mar 31, 2023

Your directors are pleased to present the Thirty Sixth Annual Report along with the audited accounts of your Company for the year ended March 31, 2023.

FINANCIAL RESULTS (STANDALONE)

('' in Million)
For the year ended March 31	2023	2022#
Income	437,856	372,079
Profit Before Interest, Depreciation and Tax	58,978	72,383
Interest	(1,808)	(689)
Depreciation	(8,129)	(7,403)
Profit Before Tax	49,041	64,291
Provision for Taxation	(11,266)	(14,058)
Profit After Tax	37,775	50,233
Other Comprehensive Income	(2,480)	1,200
Balance brought forward from previous year	216,090	203,329
Profit available for appropriation	253,917	253,292
Equity Dividends	(46,705)1	(43,624)1
Transfer to retained earnings on account of options lapsed	99	74
Transferred from Special Economic Zone re-investment reserve on utilization	7,151	6,348
Balance carried forward	214,462	216,090

# - Figures for the previous year are restated after considering the amalgamation of Tech Mahindra Business Services Limited and Born Commerce Private Limited with the Company.

¹ Interim Dividend (Special Dividend) for the Financial Year ended March 31, 2023 and Final Dividend for the Financial Year ended March 31,2022

DIVIDEND

The Board of Directors on November 1, 2022 approved a special interim dividend of '' 18/- per share (i.e. 360%) on the par value of '' 5/- each which was paid by the Company to the shareholders whose names appeared in the Register of Members as on November 10, 2022, being the record date for the payment of dividend. Your Directors are pleased to recommend a final dividend of '' 32/- per share on par value of '' 5/- (i.e. 640%), payable to those Shareholders whose names appear in the Register of Members as on the Book Closure Date. Thus, the total dividend for the FY 2022-23 will be '' 50/- per share (i.e. 1000%) against the dividend of '' 45/- per share (i.e. 900%) paid for the Financial Year 2021-22.

The Board of your Company decided not to transfer any amount to the General Reserve for the year under review.

Your Company has formulated a Dividend Policy which is disclosed on the website of the Company and can be accessed at https://insights.techmahindra.com/ investors/tml-dividend-distribution-policy.pdf

SHARE CAPITAL

During the year under review, your Company allotted 2,313,996 equity shares on the exercise of stock options under various Employee Stock Option Schemes. Consequently, the issued, subscribed and paid-up equity share capital has increased from '' 4,859.17 million divided into 971,833,479 equity shares of '' 5/- each to '' 4,870.74 million divided into 974,147,475 equity shares of '' 5/- each.

ALTERATION OF ‘CAPITAL CLAUSE’ OF MEMORANDUM OF ASSOCIATION

Consequent to the merger of Tech Mahindra Business Services Limited and Born Commerce Private Limited with the Company, the Authorised Capital of the

Company increased from '' 8,336.50 million divided into 1,667,300,000 equity shares of '' 5/- each to '' 9,093 million divided into 1,818,600,000 equity shares of '' 5/- each.

Accordingly, the Capital Clause of the Memorandum of Association of the Company was altered and substituted with the new Clause V to reflect the corresponding changes in the Authorised Share Capital.

BUSINESS PERFORMANCE / FINANCIAL OVERVIEW

Imperative for businesses and your Company to stay relevant is the need to be cognizant of the tectonic shifts occurring around the world. Technological innovations, climate change and the need for inclusive growth and representation among others is defining the way organization’s function. Tech Mahindra has remained on the forefront of all cutting-edge technological advancements and harnessed many emerging technologies to transform customer and employee experiences. Your Company’s execution strategy is indexed to the pillars of client focus, portfolio synergy, operational rigor, new age technology bets and people transformation.

During the Financial Year ended on March 31, 2023, the Company’s revenues grew to '' 532,902 million on a consolidated basis as against '' 446,460 million in the previous year - indicating a robust growth of 19.4%. The growth was broad based across geographies as both Americas and Europe contributed in line with overall business growth. The Company also saw healthy growth across business segments in Communications, Media and Entertainment (CME) and Enterprise verticals.

The EBITDA on a consolidated basis for the Financial Year 2023 was '' 80,288 million, similar to the previous year’s EBITDA of '' 80,200 million. The resultant EBITDA margins were in the range of 15.1% in FY 2023 compared to 18.1% in FY 2022. The post-tax profit of the Company was reduced to '' 48,313 million in FY 2023 as against '' 55,661 million in FY 2022.

The Company saw robust demand for digital transformation services with a focus on customer experience and cloud. The Company has seen new deal wins close to USD 3,000 million during the year, indicating a healthy growth momentum across all business verticals. Your Company’s investments in Enterprise SaaS and Hi-tech capabilities will help

it cater to increasing modernization demands from businesses in the Financial Year 2024 and beyond.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT

There have been no material changes and commitments which affect the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this report.

ACQUISITIONS

Your company made the following acquisition during the FY 2022-23.

THIRDWARE SOLUTIONS LIMITED

The Company acquired 100% of the share capital of Thirdware Solutions Limited ("Thirdware”) on June 3, 2022 at a consideration up to USD 42 million including earnouts. Thirdware is a global player in Enterprise Applications and will enhance the Company’s digital solutions and services in automotive consultant and design, development and implementation in areas like ERP (Enterprise Resource Planning), EPM (Enterprise Performance Management), RPA (Robotic Process Automation) and IloT (Industrial Internet of Things). These capabilities will give the Company an edge in the manufacturing space.

UPDATE ON MERGER

Your directors at their meeting held on January 31, 2021 approved the Scheme of Merger of Tech Mahindra Business Services Limited (TMBSL) and Born Commerce Private Limited (Born) with the Company with the appointed date as April 1, 2021.

Hon’ble NCLT, Mumbai bench and Hon’ble NCLT, Chennai bench vide their order dated January 5, 2023 and January 12, 2023 respectively, approved the scheme of merger by absorption of the TMBSL and Born with the Company and their respective shareholders and the said Scheme has become effective on February 16, 2023.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES OF THE COMPANY

The performance and financial position of the subsidiaries, associates, and joint venture companies included in the consolidated financial statement is provided in accordance with the provisions of Section

129 read with Rule 5 of the Companies (Accounts) Rules, 2014 containing the salient features of the financial statement of the Company’s subsidiaries/joint ventures or associate companies in Form AOC - 1 in “Annexure I” to this report.

Pursuant to Rule 8(5)(iv) of the Companies (Accounts) Rules, 2014, the names of the companies which have been incorporated or ceased to be the subsidiaries, joint ventures or associate companies during the year are provided in “Annexure II” to this report. The Company is actively pursuing the initiative on the consolidation of its subsidiaries/branches to optimize the operational costs. During the year under review, your Company has closed/merged twenty subsidiaries.

HUMAN RESOURCES

The employees of the Company are the most critical asset to your Company. The Company has taken several steps to protect, retain, and improve the competencies of these assets including:

Hiring: Forecast to Fulfilment

Your Company has streamlined its talent hiring process adopting some best-in-class practices. By building predictability in talent planning & forecasting for new age skills, your Company has been able to fuel business growth. Your Company has revamped its Buddy Referral programs to recruit talent from existing employee networks while offering attractive incentives. Embracing diversity in the hiring process has improved the global and local representation of talent within the organization. The Company has also redesigned its Candidate Engagement process to focus on creating positive experiences from the issuing joining offer letter to internal deployment to client projects. With rigor in talent allocation and proactive skilling of bench talent, your Company has been able to increase its internal fulfilment to 71% from 48% which is the best in the industry.

Learning: Skilling on the job

With the growth in digital business, your Company has been transforming its workforce both at speed and scale. The Company accelerated skilling initiatives to keep up with the pace of technological developments and built a ‘future-ready’ talent pool. #NAD Learn, the Al-based platform with interactive, on-demand, contextual and hyper-personalised up-skilling is helping the Company develop full-stack professionals. Your Company has supplemented this with young leadership development programs as well

as new policies to promote niche skilling and fast-track career growth. Employees can learn and grow as a Fresher through Elevate, in customer deployments through Project Skilling, for career progression through Future Skilling and into the leadership pipeline through journey-based programs. The Company also offers super-specialization skilling programs including Architect CoE, HiPOT programs at units and Program Manager CoE through EMBARK. Some new programs that the Company has recently launched for high-potential talent development include MALT and TrIBE.

Leadership: Integrative Thinking

The natural culture of empowerment that was supercharged during the pandemic continues to be the mainstay in the current hybrid work environment. Your Company aims to help employees imbibe mindsets & behaviors for the future which include a renewed focus on Integrative Thinking, Business & Financial Acumen, Bias for Action, Closure over Follow-up, Data over Emotions and Extreme Ownership. This was reinforced through the adoption of an industry leading learning platform - Harvard Manage Mentor Spark aimed at imparting best-in-class training at every level in realtime. Your Company has a robust Talent Management process for developing the leadership talent pipeline and has adopted consistent coaching practices for managers. Apart from Coaching, the employees have experienced new forms of learning with technology-enabled tools and pedagogies. For example, the ‘Wheel of Life’ is a customized self-coaching tool with gamified journeys, and personalized Habit Tracking making personal and professional well-being goals accessible to every employee.

Performance: Feedback focused

Your Company launched the Annual Performance Feedback cycle in December 2022. In order to build a culture where performance is enabled through feedback, Managers have been trained to have better performance review dialogues with their direct reports and work on an outcome-based evaluation rather than process or effort measurement. Your Company is creating a High-Performance Culture through hyper-personalized Incentive plans. Your Company has a suite of Incentive plans that are designed to create a strong alignment between Individual growth and Organization performance.

Wellness: Collective well-being

Your Company puts a happier, healthier and more productive workforce at the core of its business, policies and decisions. Your Company has designed

initiatives covering eight dimensions of wellness -Physical, Occupational, Emotional, Spiritual, Social, Environmental, Financial and Intellectual. The focus on preventative care with Corporate paid preventive health check, on-campus doctor consultations & counselling programs, helps employees diagnose any health condition in advance. To tackle IT industry specific issues, the Company organizes wellness sessions on Ergonomics, Healthy eating, Lifestyle management etc. Multiple tech-enabled wellness interventions like Kick the Butt (Smoking Cessation Program), Bend it like TechM (Guide to Ergonomics), Dump the Plump (Weight loss challenge) etc. have helped employees create healthier habits. Through the People Care program, managers are encouraged to show their human side and empower their team members to pursue collective well-being.

Communication: Building purpose

A robust communication process is at the heart of the Company’s vibrant culture. Employees are kept connected and informed through multiple media. Your Company’s 360-degree communication framework ensures employees have access to connect with leaders, peers and the external world. With publications, platforms, storytelling, campaigns, and connects, the organizational culture is shared with all. Your Company shares stories of diverse individuals achieving extraordinary things using structured formats like #RiseFromWithin. Leaders in the Company share not just business updates and success stories but personal anecdotes that reinforce the belief of a shared destiny.

Engagement: Hybrid connects

For an increasingly hybrid workplace, the Company has designed several virtual ‘water-cooler’ moments like All Hand Meets with CXO, Prime Time, Location Connects etc. along with family connects. Employees have platforms like MS Teams and Cisco WebEx for collaborative yet decentralized working. Your Company also organized on-ground engagement linked to TechM’s FIDE partnership for the Chess Olympiad. TechM CARES Action Planning workshops were also organized across different business units to implement changes based on employee feedback. Your Company also organized more than 1,200 engagement programs globally linked to Rise Refresh.

Rise Refresh: #TogetherWeRise

For more than a decade, the Rise philosophy has inspired employees from across the Mahindra Group to come to work and build something meaningful.

Since then, the world has changed with the rise of disruptive technologies, changing start-up ecosystem, climate change and recently, the pandemic. This is why, the Company has defined a new core purpose and brand pillars of Rise to simplify and sharpen its commitments. Your Company has leveraged every possible medium to ensure that this is communicated to all employees. From the conventional posters, communities, blogs, leader-bytes, microsite, quizzes and signatures route to the unconventional music, memes, WhatsApp stickers, GenZ lingo, podcast conversations and comic strips, Rise has touched the heart of every employee.

Diversity: Respecting Individuality

Your Company believes that respecting diversity and ensuring inclusion is fundamentally the right thing to do. It respects, embraces and celebrates the uniqueness of every individual. This also links back to the stated objective of the Company to be human-centered by encouraging associates to bring their most authentic selves to work. Your Company initiated the Maternity Assistance Program (MAP) to support employees who were on Maternity Leave in their transition back to work. The Company has also organized several Fireside chats featuring women with STEAM (Science, Technology, Engineering, Arts, Mathematics) roles to inspire others to grow in these fields. Through the ‘Restart’ Program, the Company aims to help Women IT Professionals restart their career after a break.

Recognition: Appreciation always

Your Company believes in appreciating, recognizing, and celebrating by building a culture where good work and behavior are appreciated. The Company has designed specialized recognition programs where rewards, tenure, performance, and contribution are celebrated, often with the loved ones of employees. The recognition program is centered around n = 1, that is, the individual at the heart of everything. A key part of personalizing recognition is to bring it to the desk of every employee. This is enabled by the KUDOS portal that offers recognition badges as well as redemption options for the points earned. Giving employees the ability to appreciate colleagues and sustained campaigns have led your Company to have an industry leading rewards penetration of ~74% including monetary and non-monetary recognition. Tenure is rewarded with personalized gifts for both the employee and their family members. Lastly, there are several organizational level awards for outstanding achievements like the ACE, STAR, Location Council and Spotlight awards.

HR Digitization: Experiencing technology

Your Company has revolutionized employee experience by deploying technology at different touchpoints of their lifecycle. Your Company continued its internal automation focus by using Robotic Process Automation for completing common workforce actions to reduce manual work. Your Company has also integrated HR Chatbot UVO and Technical Support Chatbot ATOM into MS Teams making it easier to perform workforce actions like leave applications, pending approvals, ticket registrations etc. Developing an "Attrition Prediction Model” has provided Your Company with an early warning system predicting the employees’ likelihood to quit, giving the Business HR team the ability to stage an intervention. The Company has also explored the use of Metaverse where three dimensional avatars interact in a virtual world to develop modules for hiring and on-boarding. Translating these experiences to mobile devices, the Company has developed ‘The Wheel of Life’ application as a self-coaching tool.

QUALITY

The Company continues its focus on quality and strives to exceed customer expectations at all times. During the year, it continued to strengthen the implementation of Quality systems and upgraded the processes/systems to comply with CMMI V 2.0 for both Development and Services and currently assessed for maturity level 5. Similarly it underwent various upgrade and re-certification audits for multiple standards during the year in order to meet client demands and enhance value delivery - successfully re-certified, ISO 9001:2015 (Quality Management System), ISO 20000-1:2018 (Information Technology Service Management System), ISO 27001:2013 (Information Security Management System), ISO 27701:2019 (Privacy Information Management System), TL9000 R 6.2/ R5.7 (Quality Management Systems for Tele Communications industry), ISO 13485:2016 (Quality Management Systems for medical devices - scope of certification limited to medical devices business within Tech Mahindra), AS9100 Rev D (Standard for Aerospace domain - scope of certification limited to the aerospace business within Tech Mahindra), ISO 17025:2017 - Laboratory Quality Management Systems for our device testing labs.

In addition to these, your Company also maintains its commitment to health, safety and environment by continually improving its processes in accordance with ISO 14001:2015 (Environmental Management System) and ISO 45001: 2018 (Occupational Health and Safety

Assessment Series) standards. Your Company is also certified on ISO 22301:2012 (Societal Security and Business Continuity Management System) and has a comprehensive Business Continuity and Disaster Recovery framework, to prevent potential business disruptions in the event of any disaster. It has processes that helped resume services to customer’s acceptable service levels. Automated Service Desk with SLAs for enabling business and Vulnerability Assessment and Penetration Testing Lab for secured corporate network operations are highlights that showcase the information security posture of the Organization.

Tech Mahindra (IT Division) has been assessed for the implementation of high maturity business excellence practices at Mahindra Group (Services Sector). It has been assessed at TMW Maturity Stage 7 (on scale of 1-10 stages) of Mahindra Business Excellence Framework - The Mahindra Way. These certifications are testimony of the robustness of business processes and at large, the quality culture imbibed in the organization.

Your Company has institutionalized the Deliverability Risk Assessment (DRA) practice - to assess the readiness and to identify risks at the beginning of the program, continued to strengthen the process for transforming Quality Assurance processes & delivery methods to adopt and strengthen Delivery excellence, Risk governance, and further enhance automation to enable quality delivery to the customer. Quality index which is a measure of quality of products and services delivery is institutionalized.

The Company is ensuring all these initiatives are in place, to ensure that it delivers as stated in its Quality Policy.

DIRECTORS

During the year under review, all Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Independent Directors have also given declaration of compliance with Rules 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014, with respect to their name appearing in the data bank of Independent Directors maintained by the Indian Institute of Corporate Affairs.

Pursuant to the provisions of Section 152(6)(c) of the Companies Act, 2013, Mr. Manoj Bhat, Director (DIN: 05205447) is liable to retire by rotation and being eligible offers himself for reappointment.

During the year under review, Ms. Penelope Fowler (DIN: 09591815) was appointed as Additional Director by the Board of Directors of the Company on May 13, 2022. She was further appointed as an Independent Director pursuant to the special resolution passed by the shareholders at the Annual General Meeting held on July 26, 2022 for a period of 5 years.

In view of the retirement of Mr. C. P Gurnani, Managing Director and CEO, the Board of Directors at its meeting held on June 15, 2023, based on the recommendation of the Nomination and Remuneration Committee approved the Appointment of Mr. Mohit Joshi, (DIN: 08339247) as Additional Director with effect from June 20, 2023 to hold office up to the date of ensuing Annual General Meeting. Further in order to ensure smooth transition into the role of Managing Director as Mr. C. P. Gurnani would retire on December 19, 2023, Mr. Mohit Joshi was also appointed as a Whole Time Director designated as Managing Director (Designate) and Key Managerial Personnel with effect from June 20, 2023 up to December 19, 2023 subject to the approval of the members of the Company and the Central Government.

The Board of Directors, based on the recommendation of Nomination and Remuneration Committee also approved the appointment of Mr. Mohit Joshi as Managing Director & Chief Executive Officer of the Company and Key Managerial Personnel under the Companies Act, 2013 from December 20, 2023 to June 19, 2028 (both days inclusive), subject to approval of the members of the Company and the Central Government.

The Board recommends the appointment of Mr. Manoj Bhat and Mr. Mohit Joshi to the Members at the ensuing Annual General Meeting. The brief profile of Mr. Manoj Bhat and Mr. Mohit Joshi is given in the Notice of the Annual General Meeting.

In terms of Regulation 24(1) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, Mr. T. N. Manoharan, Lead Independent Director of the Company has been appointed as Director on the Board of Tech Mahindra (Americas) Inc., a wholly

owned unlisted material subsidiary of the Company with effect from May 21, 2019.

In the opinion of the Board of Directors, the Independent Directors have relevant proficiency, expertise and experience.

FAMILIARISATION PROGRAMME

These programmes aim to provide insights into the Company to enable the Independent Directors to understand its business in depth and contribute significantly to the Company. The details of the program for familiarisation of the Independent Directors with the Company are available on its website and can be accessed at https://insights.techmahindra.com/ investors/tml-familarisation-progarmmes-for-IDs.pdf

The Board of Directors are regularly updated on changes in statutory provisions like amendments in Corporate Laws, SEBI Regulations, Taxation Laws and People related laws as applicable at the quarterly Board meetings. The Board members are also updated on the Risk universe applicable to the Company’s business. The MD & CEO of the Company had quarterly sessions with Board members sharing updates about the Company’s business strategy, operations and the key trends in the IT industry that are relevant to the Company. These updates help the Board members in keeping abreast of key changes and their impact on the Company. Further Subject Knowledge Experts from various fields are also invited to the meetings of the Board/Committees to appraise the Board Members of the latest developments in the IT and the business.

TRAINING

The Company has laid down a policy on the training of Independent Directors as part of its governance policies. The Senior Leadership of the Company periodically updates the Directors on regulatory changes, business strategy and operations.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Regulation 19 read with Schedule II, Part D of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has devised a policy on evaluating the performance of the Board of Directors, the Chairman, Committees, and Individual Directors. The evaluation process was carried out through a web-based portal. The summary of the evaluation reports

was presented to the respective Committees and the Board. The Directors had given positive feedback on the overall functioning of the Committees and the Board. The suggestions made by the Directors in the evaluation process have been suitably incorporated in the processes.

NUMBER OF MEETINGS OF THE BOARD

The Board met five times during the Financial Year 2022-23. The meeting details are provided in the Corporate Governance report that forms part of this Annual Report. The maximum interval between any two meetings did not exceed 120 days as prescribed in the Companies Act, 2013 and SEBI Listing Regulations.

COMMITTEES OF THE BOARD

As on March 31, 2023, the Board has constituted seven Committees, namely, Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk Management Committee, Corporate Social Responsibility Committee, Investment Committee and Securities Allotment Committee. The details of terms of reference of each Committee and the meetings held during the year are given in the Corporate Governance Report.

The Company has also formed Group Governance Council comprising of Board Members and Senior Management in terms of the SEBI Circular No. SEBI/ HO/CFD/CMD/CIR /P/2018/79 dated May 10, 2018, considering it has a large number of subsidiaries.

POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION

The Governance policies laid down by the Board of Directors of your Company include:

i. Policy on the appointment and removal of Directors, Key Managerial Personnel and Senior Management.

ii. Policy on remuneration to the Directors, Key Managerial Personnel and Senior Management and other Employees.

The extract of these two policies is provided in "Annexure III”.

The policies are available on the website of the Company and can be accessed at https://insights. techmahindra.com/investors/Governance-Policies-including-remuneration-to-Directors-KMPS.pdf

SUCCESSION PLAN

In accordance with the principles of transparency and consistency, your Company has adopted governance policies for appointments, remuneration and evaluation of its Board of Directors, Key Managerial Personnel & Senior Management. In line with these Governance policies, the Company has established a formal Succession Planning Program for Key Managerial Personnel across the organization. The Board evaluates all such plans at a regular interval and institutes a formal program for filling any such critical position. The Board evaluates both internal and external candidates for such positions along with the recommendations of the management. The Company also has a leadership development program where it identifies high potential managers, and trains them to take up the positions of higher responsibility. The Company has identified the second line of leadership, which provides stability to the business in case of contingencies.

KEY MANAGERIAL PERSONNEL (KMP)

Pursuant to provisions of Section 203 of the Companies Act, 2013, Mr. C. P. Gurnani, Managing Director & Chief Executive Officer, Mr. Milind Kulkarni, Chief Financial Officer (up to May 31, 2022), Mr. Rohit Anand, Chief Financial Officer (w.e.f. June 1, 2022) and Mr. Anil Khatri, Company Secretary & Compliance Officer were the Key Managerial Personnel of the Company during the year under review.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, your Directors, based on the representation(s) received from the Operating Management and after due enquiry, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and, reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for the year ended on that date;

iii. proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts have been prepared on a going concern basis;

v. they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

vi. the proper systems to ensure compliance with the provisions of all applicable laws are in place and are adequate and operating effectively.

DETAILS WITH RESPECT TO ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has internal financial controls which are adequate and were operating effectively. The controls are adequate for ensuring the orderly and efficient conduct of the business, including adherence to the Company’s policies, the safeguarding of assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records and timely preparation of reliable financial information.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / PROCEEDINGS

There are no significant and material orders passed by the regulators or courts or tribunal, impacting the going concern status and the Company’s operations in the future.

Further no application against the Company has been filed or is pending under the Insolvency and Bankruptcy Code, 2016, nor has the Company done any one-time settlement with any Bank or Financial institutions.

STATUTORY AUDITORS

The members, in the 35^th Annual General Meeting (AGM) held on July 26, 2022, appointed M/s. B S R & Co. LLP, Chartered Accountants, [ICAI Firm’s Registration No. 101248W/W- 100022] as the Statutory Auditors of the Company, to hold office for a further term of five consecutive years from the conclusion of the 35^th AGM of the Company held in

the Financial Year 2021-22 until the conclusion of the AGM of the Company for the Financial Year 2026-27 on such remuneration as may be determined by the Board of Directors.

There are no qualifications, reservations, adverse remarks or disclaimers made in the audit report for the Financial Year 2022-23.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies

(Appointment and Remuneration of Managerial

Personnel) Rules, 2014, the Company had appointed Makarand Lele & Co., Practicing Company

Secretary, Pune to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is available at "Annexure IV” to this report. There are no qualifications, reservations, adverse remarks or disclaimers made in the Secretarial Audit Report.

COMPLIANCE WITH SECRETARIAL

STANDARDS

The Company has complied with the applicable Secretarial Standards.

ANNUAL RETURN

Pursuant to the provisions of Section 92(3) read with Section 134(3) (a) of the Companies Act, 2013, the Annual Return in Form MGT-7 is available on the website of the Company and can be accessed at https://insights.techmahindra.com/investors/mgt-7.pdf

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

During the year, the Company has transferred the unclaimed dividends of '' 2,13,40,674 to the Investor Education and Protection Fund. Further, 2,26,700 corresponding shares on which dividends were unclaimed for seven consecutive years were transferred to the fund as per the requirements of the IEPF Rules. The Members are requested to check the details of the unpaid dividend on the website of the Company and claim their dividend to avoid the shares from being transferred to IEPF.

MANAGERIAL REMUNERATION

Disclosures of the ratio of the remuneration of each director to the median employee’s remuneration and other details as required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014 as amended from time to time, are provided as "Annexure V”. None of the Directors or the Managing Director & CEO of the Company received any remuneration or commission from Subsidiary Companies of your Company.

The details of remuneration paid to the Directors including the Managing Director & CEO of the Company are provided in the Corporate Governance Report.

PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Companies Act, 2013 ("the Act”) read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. However, pursuant to first proviso to Section 136(1) of the Act, this report is being sent to the Shareholders excluding the aforesaid information. Any shareholder interested in obtaining said information may write to the Company Secretary at the Registered Office / Corporate Office of the Company and the said information is open for inspection at the Registered Office of the Company.

POLICY ON PREVENTION OF SEXUAL HARASSMENT

Your Company has laid down the Prevention of Sexual Harassment (POSH) policy which is available on its website. The Company has zero tolerance on Sexual Harassment at workplace. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The status of complaints received under POSH and redressed by the POSH Committee of the Company, during the Financial Year under review, are given below:

a) Number of complaints received during the year - 74

b) Number of complaints redressed during the year - 73@

c) Number of complaints pending for redressal as on March 31, 2023 - 3

@ - Includes 2 complaints received during the previous year and redressed during the year.

There are focused campaigns on the POSH policy within the Company and awareness drives that

take place. Furthermore, employees are required to undertake a mandatory certification on POSH to sensitize themselves and strengthen their awareness.

EMPLOYEE STOCK OPTION SCHEMES

During the year under review, there were no material changes in the Employee Stock Option Schemes (ESOPs) of the Company and the Schemes are in compliance with the SEBI Regulations on ESOPs.

As per Regulation 14 of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, the details of the ESOPs are uploaded on the website of the Company and can be accessed at https://insights.techmahindra. com/investors/details-of-esops-fy-2022-23.pdf

CORPORATE GOVERNANCE

A report on Corporate Governance covering among others composition of the Board of Directors, details of meetings of the Board and Committees along with a certificate for compliance with the conditions of Corporate Governance in accordance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, issued by the Statutory Auditors of the Company, forms part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of your Company’s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)

SEBI, vide its circular dated May 10, 2021, made BRSR mandatory for the top 1,000 listed companies (by market capitalization) with effect from the FY 2022-23. The Company voluntarily published BRSR for the Financial year 2021-22. The BRSR Report for the year 2022-23 is enclosed as part of this Annual Report.

In addition to the BRSR, the Integrated Annual Report of the Company provides an insight on the various ESG initiatives adopted by the Company. The ESG disclosures have been independently assured by KPMG.

COST RECORDS

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities of the Company.

RISK MANAGEMENT

The Risk Management Committee of the Board of Directors devised a Risk Management Policy and guides the operating management to identify risks, analyze their probability and impact and prepare mitigation plans. It periodically reviews the Risk Management Framework & Enterprise Risk Register which is presented by the Chief Risk Officer. The Company identifies all potential risks viz. economic, business, currency, operations, climate, governance, finance, cyber, business continuity etc. and prepares a mitigation plan for each of the risks. The elements of risk as identified by the Company with the impact and mitigation strategy are set out in the Management Discussion and Analysis Report.

ESTABLISHMENT OF VIGIL MECHANISM

The Company has laid down Whistle Blower Policy covering Vigil Mechanism with protective clauses for the Whistle Blowers. The Whistle Blower Policy is made available on the website of the Company.

DEPOSITS / LOANS & ADVANCES, GUARANTEES OR INVESTMENTS

The Company has not accepted any deposits from the public during the year under review. The particulars of loans/advances, guarantees and investments under Section 186 of the Companies Act, 2013 are given in the notes forming part of the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All transactions entered with Related Parties as defined under Section 2(76) of the Companies Act, 2013 and Regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, ("The Listing Regulations”), during the financial year under review were in the ordinary course of business and at an arm’s length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no transactions with related parties in the Financial Year which conflicted with the interest of the Company and required compliance of the provisions of Regulation 23 of the Listing Regulations.

Suitable disclosure as required by the Indian Accounting Standards (Ind AS 24) has been made in the notes forming part of the Financial Statements.

The Company has formulated a policy on the Related Party Transactions and dealing with Related Party Transactions which has been uploaded on the website of the Company and can be accessed at https:// insights.techmahindra.com/investors/Related-Party-Transactions-Policy.pdf

The particulars of related party transactions in prescribed Form AOC - 2 are attached as ‘Annexure VI”. Pursuant to Regulation 23(9) of the Listing Regulations, your Company has filed half yearly report on Related Party Transactions with the stock exchanges.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are provided in "Annexure VII” which forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY

The CSR vision of the Company is "Empowerment through Education.”

In compliance with the guidelines prescribed under Section 135 of the Companies Act, 2013, your Company has constituted a Corporate Social Responsibility (CSR) Committee of the Board. The CSR policy, covering the Objectives, Focus Areas, Governance Structure Monitoring and Reporting Framework among others is approved by the Board of Directors. In accordance with the amendments made in Section 135 in January 2021, the CSR Policy has been duly revised and is available on the website of the Company and can be accessed at https://insights. techmahindra.com/investors/tml-csr-policy-23.pdf

The Company has spent more than 2% of the average net profits of the Company during the three immediately preceding Financial Years on CSR.

The Company’s social initiatives are mainly carried out by Tech Mahindra Foundation and Mahindra Educational Institutions, Section 8 (erstwhile Section 25) Companies promoted by the Company.

TECH MAHINDRA FOUNDATION (TMF) EDUCATION

The key initiatives taken by TMF in the arena of school education include:

ALL ROUND IMPROVEMENT IN SCHOOL EDUCATION (ARISE)

Tech Mahindra Foundation’s educational initiatives under ARISE are long-term school improvement programmes, in partnership with local governments and partner organisations. The Foundation in 2022-23 worked with 18 government primary & secondary schools to transform them into model schools of excellence. A total of 5,224 students were positively impacted under this programme, of which 2,832 were girls.

During the year, the Foundation expanded its work for children with special needs through its ARISE programme. This programme is a variant of ARISE in which children with special needs are provided chronic therapy as well as special education to help them lead more fulfilling lives. Through 32 projects, the programme enabled 4,829 children with special needs to become better learners with greater independence in managing their lives. The Foundation has taken up the provision of assistive technology for these children as an important value addition to its work in ARISE .

SHIKSHAANTAR

Shikshaantar, envisioned as a programme for enhancing the capacity of government school teachers, has emerged as an important programme in the education portfolio of the Foundation. TMF works with the Municipal Corporation of Delhi by running their In-Service Teacher Education Institutes. With the merger of the MCDs, TMF now has the responsibility of training teachers from close to 1,500 primary schools in Delhi. During the year under review, as many as 4,379 teachers were trained as part of Shikshaantar. This included specially designed modules for Digital Literacy, Child Safety, Cyber Security and Mental Health that were delivered to the teachers in a hybrid mode.

MOBILE SCIENCE LAB & ROBOTICS LAB

In order to increase the footprint of its work in Education and reach the unreached, TMF launched a unique initiative in 2019-20 - The Mobile Science Lab (MSL). For this, a Mahindra bus has been remodeled to become a science lab on wheels and has been travelling from school to school in East Delhi to provide STEM learning for children in grades 3 and 4 in these

schools. The MSL program benefitted as many as 6,861 students and 77 teachers throughout the year.

Following the success of the MSL program, TMF has also set up a Robotics Lab at one of its ARISE schools in Delhi which is an all-girls school. This lab was inaugurated in November 2022, and nearly 300 girls from this school are the potential beneficiaries.

EMPLOYABILITY

Skills-for-Market Training (SMART) is the Foundation’s flagship programme in employability. It is built on the vision of an educated, enabled and empowered India, and the belief that educated and skilled youth are the country’s true strength. The programme started with 3 Centres in 2012 and is currently running over 85 Centres at 10 locations across India. These include SMART Centres, SMART Centres (training for people with disabilities), and SMART-T Centres (training in technical trades).

In 2022-23, your Company trained 17,641 young women and men under its SMART program, of which, 1,303 were persons with disabilities. More than 70% of the graduates are placed in jobs across multiple industries upon successful completion of the training. The average salaries being earned by the graduates of the SMART program have been steadily rising and saw a 10% jump over the previous year.

The Foundation’s commitment to setting new benchmarks in skill development in India has been underscored by the setting up of Tech Mahindra SMART Academies, which provide the highest quality of skill training to youngsters in Healthcare and Digital Technologies. During FY 2022-23, 3,584 students were trained at the nine Academies that are now functional - 5 in Healthcare, 3 in Digital Technologies, and 1 in Logistics.

TMF’S OUTREACH INITIATIVES

In addition to all the core programs described above, Tech Mahindra Foundation is now also implementing several outreach projects in collaboration with various agencies. As part of these, the TMF team members are engaged in activities such as community health initiatives, teacher training, provision of content for other large-scale projects, etc. As part of such outreach projects, TMF supported 20,734 beneficiaries, taking the total tally of direct beneficiaries for the year to 61,995. This is nearly 50% more than the number of direct beneficiaries for FY 2021-22, which stood at 41,374.

MAHINDRA EDUCATIONAL INSTITUTIONS (MEI)

MEI - a not-for-profit, 100% subsidiary of the Company has set up Mahindra Ecole Centrale in August 2014 - through a collaborative venture between Mahindra Educational Institutions and Ecole Centrale of Paris, France (now known as Centrale Supelec) and the JNTU Hyderabad - to offer undergraduate engineering programs. Through this strong Indo-French Collaboration with Centrale Supelec and Industry connect with Tech Mahindra, MEC has emerged as a disruptive player in the field of Technical Education.

MEI has sponsored the setting up of Mahindra University to introduce diverse streams of education in addition to Engineering. Further the Engineering stream is being transitioned to Mahindra University.

MAHINDRA UNIVERSITY (MU)

Mahindra University ("MU”) (sponsored by Mahindra Educational Institutions, ("MEI”) - a not-for-profit, 100% subsidiary of Tech Mahindra), was notified on May 20, 2020 by the Government of Telangana vide The Telangana State Private Universities (Establishment and Regulation) Act, 2018 for "educating future citizens for and of a better world”.

The Ecole Centrale School of Engineering (ECSoE) currently runs various UG, PG and Ph.D. programs in cutting-edge engineering departments. ECSoE also launched a Centre for Life Sciences and offers courses in biotechnology and computational biology under it. The school plans to launch the 2.5 year integrated programs in Biotechnology & CSE for AY 2023-24.

Cornell University’s SC Johnson College of Business, an ivy league institution is the "Academic Partner” for School of Management. Mahindra University’s School of Management (MU - SoM) will benefit significantly from Cornell University’s expertise in curriculum development, faculty exchange programs including some specialty courses delivery by the Cornell faculty to Mahindra University students, as well as student immersion at Cornell. The School of Management currently conducts BBA, BA, E-MBA, and MBA (starting in 2023) programs.

The School of Law, Mahindra University, commenced operations in September 2021 in Hyderabad offering 5-year integrated programs in BA LL.B and BBA LL.B. It was founded on the philosophy of securing justice, equality, and service to all sections of society. With the needs of modern society evolving rapidly, there is a renewed focus on the importance of the discipline of

law. The School of Law will aim to make a difference to the legal profession and practice by providing a diverse, flexible curriculum and pedagogy, touching on several aspects of domestic and international law, while appraising the students of the latest trends in academia and practice. Starting 2022, the School of Law has launched a 3-year LLB (Hons) program and intend to launch a 6-year integrated B.Tech LLB course starting Academic Year 2023.

The University also plans to launch the following programs/schools for the Academic Year 2023-24:

1. School of Media

a. 4-year B.Tech. (Computation & Media)

b. 3-year BA (Digital Media & Communication)

2. School of Hotel Management

a. 3-year B.Sc. (Hospitality & Hotel Administration)

In the academic year 2022, a total of 2,971 students were studying under various programs across all schools and departments. The new admissions for academic year 2022 are 1,236 students of which 1,128 students are in various UG programs, including School of Management and School of Law, 22 students in the PG programs of School of Engineering and 86 students in the Ph.D programs across all the schools.

The Annual Report on CSR activities is provided as "Annexure VIII”.

SUSTAINABILITY

Your Company aligns closely with the Mahindra Group’s ambition to Rise: Be People positive, Planet positive, and Trust positive. The Company holistically embraces ever greater responsibility towards protecting the environment, empowering the society, and providing good governance.

Your Company’s strategy for creating long-term sustainable value is by improving, scaling, and transparently communicating our ecological, social, and economic impacts. Our strong governance framework led by the Board of Directors of your Company, who have oversight of the Company’s overall strategy and future direction and ensures the planning and implementation of environmental and social programs.

The Company’s holistic approach enables to drive sustainable impact in alignment with leading global frameworks, initiatives, and agendas committed to furthering sustainability such as the TCFD, SASB, GRI, as well as the Paris Agreement, the UNGC and the UN SDGs.

As a business, the Company recognizes the value of following the UN SDGs (Sustainable Development Goals) of People, Planet, Prosperity, and Partnership and continues to create value through initiatives that cater directly to these aspects of our performance.

People:

• Great place to work: Working to enhance our organizational culture by enabling our associates with access to advanced technologies, providing Learning & Development opportunities to help develop their skills and areas of expertise and providing them with robust career development programmes.

• Work-life balance: Providing feasible and flexible work-life balance and integration along with a range of associate-friendly policies and processes to reduce attrition.

• Diversity and inclusion: Ensuring that our organization continues to transcend into the realms of gender diversity and includes people with disabilities as well as people from the LGBTQIA community as part of being a socially responsible business.

• Employee engagement & recognition:

Ensuring our associates are engaged, feel valued, and recognized through a robust performance management system, a flexible system of working, and an extensive system of benefits and perquisites.

• Individual Social Responsibility: Encouraging associates to contribute to the society & environment and make these activities an integral part of their day-to-day activities.

Planet:

• Carbon neutrality and Net zero: Committing to carbon neutrality (2030) and Net zero (2035) by switching to renewable energy through on site installations and open access; improving energy efficiency through installation of LEDs, sensors; boosting green investments by

implementing Carbon Price; optimizing business travel by enabling virtual meetings; encouraging use of public transport and carpooling to reduce employee commute emissions; carbon sequestration through tree plantation; moving towards a low carbon economy by optimizing operations to ensure environmental protection.

• No waste to landfill: Installing Organic Waste Converters and vermicomposting plants at own campuses to convert food waste to manure, cutting down their transportation emissions and reducing waste to landfill.

• No to plastic: Maintaining plastic-free campuses and encouraging all stakeholders to use ecofriendly and biodegradable materials. Spreading awareness and initiating campaigns on preventing single-use plastic.

• Reduce, Reuse, Recycle, Recover: Implementing the process of Reduce, Reuse, Recycle and Recover across the value chain to limit waste and enable a circular economy.

• Being water positive: Improving water efficiency and increasing water savings by using water sensors, restrictors and water-efficient coolers, recycling wastewater through STPs, and recharging groundwater levels with Rainwater Harvesting Pits.

• Promoting Biodiversity: Protecting local flora and fauna across all our locations to ensure that we do not adversely impact biodiversity through our operations.

Prosperity:

• Innovation: Embracing technology and innovation by incorporating IoT, Blockchain, AI and Machine Learning to develop a portfolio of sustainable solutions that help reduce emissions and other negative impacts of climate change.

• Green solutions: Investing in Sustainability reporting solution (i.Sustain) and Climate Risk Management platforms, Smart grid, Microgrid-As-A-Service, Community Action Platform for Energy, Integrated Electric Vehicle Charging systems (IEVCS), Smart data hubs and Smart Cities for our Customers to reduce their carbon emissions.

• Connecting with customers: Embracing brand equity by connecting with our customers to address their current and future needs and ensuring customer satisfaction.

Partnership

• Learning and Sharing: Partnering with collaborators & partner companies to create an alliance ecosystem and supplement each other’s capabilities on joint projects. Collaborating with academia, businesses, NGOs, and governments to address some of the global challenges like health care, climate change, inequality, etc.

• Sustainable supply chain: Ensuring that we are in synch with our value chain in our commitment towards climate action and helping our suppliers follow the highest standards of sustainable and ethical best practices within their own organizations.

Tech Mahindra has drafted its Integrated Annual report in accordance with Global Reporting standards and frameworks with the data assured by a third party thus complying with the highest transparency standards.

The Company’s progress against the sustainability targets and metrics are disclosed in the externally assured Integrated reports available on the website of the company- https://www.techmahindra.com/en-in/ sustainability/

AWARDS AND RECOGNITION

Your Company continued its quest for excellence in its chosen area of business to emerge as a true global brand. Several awards and rankings continue to endorse your Company as a thought leader in the industry. A few of the prominent Awards / recognitions received by the Company during the Financial Year 2022-23 include:

• Tech Mahindra won several medals in the USA for its people practices- Brandon Hall HCM Excellence Awards, Stevie Awards for Great Employers and was also included in the 2023 Bloomberg Gender-Equality Index (GEI).

• Tech Mahindra Philippines was certified as a Great Place to Work.

• The Economic Times bestowed Tech Mahindra with several recognitions including Great Manager Awards (People Business), Human Capital Awards and ‘Best Organizations for Women’ (Femina).

• Tech Mahindra was also recognized by Avtar and Seramount as "Champions” in Most Inclusive Companies Index and "Top 10” in Best Companies for Women in India.

• Dun & Bradstreet India recognized Tech Mahindra as a top performer in the ESG Performance -Software and BPM sector.

• Tech Mahindra won Frost & Sullivan’s Technology Innovation Leadership Award 2022 for Metaverse Technology Services.

• Tech Mahindra was recognized among the Iconic brands at ET Iconic Brands 2022.

• TechM amplifAI0->^ is awarded "Cool Product or Service of the Year in Business 2022.” at the 12^th Annual 2022 Business Excellence Awards by Globee® Business Awards.

• Tech Mahindra MEA was recognized for Ground-breaking products/services in Ecommerce at GITEX.

• Tech Mahindra was awarded ‘A’ rating in MSCI ESG ratings 2022.

• Tech Mahindra received the "Mahatma Award 2022 for Social Good & Impact - Decent Work and Economic Growth” for its SMART Program.

These awards are a reflection of the Company’s continued efforts in the fields of business, sustainability, human resource management and its sustained progress towards creating a better society for all.

ACKNOWLEDGEMENTS

Your directors place on records their appreciation for the contributions made by employees towards the success of your Company. Your directors gratefully acknowledge the co-operation and support received from the shareholders, customers, vendors, bankers, Regulatory and Governmental authorities in India and abroad.

For and on behalf of the Board

Anand G. Mahindra Place: Mumbai Chairman

Date: 15^th June, 2023 (DIN: 00004695)

Note: The Board of Directors at its meeting held on April 27, 2023, had approved the financial statements for the financial year 2023 and the Director''s Report along with the Annexures. However, in view of the appointment of Mr. Mohit Joshi as Additional Director and Whole Time Director, the revised Director''s Report was approved by the Board at its Meeting held on June 15, 2023.

1

Interim Dividend (Special Dividend) for the Financial Year ended March 31, 2022 and Final Dividend for the Financial Year ended March 31, 2021

---

Mar 31, 2023

Your directors are pleased to present the Thirty Sixth Annual Report along with the audited accounts of your Company for the year ended March 31, 2023.

FINANCIAL RESULTS (STANDALONE)

('' in Million)
For the year ended March 31	2023	2022#
Income	437,856	372,079
Profit Before Interest, Depreciation and Tax	58,978	72,383
Interest	(1,808)	(689)
Depreciation	(8,129)	(7,403)
Profit Before Tax	49,041	64,291
Provision for Taxation	(11,266)	(14,058)
Profit After Tax	37,775	50,233
Other Comprehensive Income	(2,480)	1,200
Balance brought forward from previous year	216,090	203,329
Profit available for appropriation	253,917	253,292
Equity Dividends	(46,705)1	(43,624)1
Transfer to retained earnings on account of options lapsed	99	74
Transferred from Special Economic Zone re-investment reserve on utilization	7,151	6,348
Balance carried forward	214,462	216,090

# - Figures for the previous year are restated after considering the amalgamation of Tech Mahindra Business Services Limited and Born Commerce Private Limited with the Company.

¹ Interim Dividend (Special Dividend) for the Financial Year ended March 31, 2023 and Final Dividend for the Financial Year ended March 31,2022

DIVIDEND

The Board of Directors on November 1, 2022 approved a special interim dividend of '' 18/- per share (i.e. 360%) on the par value of '' 5/- each which was paid by the Company to the shareholders whose names appeared in the Register of Members as on November 10, 2022, being the record date for the payment of dividend. Your Directors are pleased to recommend a final dividend of '' 32/- per share on par value of '' 5/- (i.e. 640%), payable to those Shareholders whose names appear in the Register of Members as on the Book Closure Date. Thus, the total dividend for the FY 2022-23 will be '' 50/- per share (i.e. 1000%) against the dividend of '' 45/- per share (i.e. 900%) paid for the Financial Year 2021-22.

The Board of your Company decided not to transfer any amount to the General Reserve for the year under review.

Your Company has formulated a Dividend Policy which is disclosed on the website of the Company and can be accessed at https://insights.techmahindra.com/ investors/tml-dividend-distribution-policy.pdf

SHARE CAPITAL

During the year under review, your Company allotted 2,313,996 equity shares on the exercise of stock options under various Employee Stock Option Schemes. Consequently, the issued, subscribed and paid-up equity share capital has increased from '' 4,859.17 million divided into 971,833,479 equity shares of '' 5/- each to '' 4,870.74 million divided into 974,147,475 equity shares of '' 5/- each.

ALTERATION OF ‘CAPITAL CLAUSE’ OF MEMORANDUM OF ASSOCIATION

Consequent to the merger of Tech Mahindra Business Services Limited and Born Commerce Private Limited with the Company, the Authorised Capital of the

Company increased from '' 8,336.50 million divided into 1,667,300,000 equity shares of '' 5/- each to '' 9,093 million divided into 1,818,600,000 equity shares of '' 5/- each.

Accordingly, the Capital Clause of the Memorandum of Association of the Company was altered and substituted with the new Clause V to reflect the corresponding changes in the Authorised Share Capital.

BUSINESS PERFORMANCE / FINANCIAL OVERVIEW

Imperative for businesses and your Company to stay relevant is the need to be cognizant of the tectonic shifts occurring around the world. Technological innovations, climate change and the need for inclusive growth and representation among others is defining the way organization’s function. Tech Mahindra has remained on the forefront of all cutting-edge technological advancements and harnessed many emerging technologies to transform customer and employee experiences. Your Company’s execution strategy is indexed to the pillars of client focus, portfolio synergy, operational rigor, new age technology bets and people transformation.

During the Financial Year ended on March 31, 2023, the Company’s revenues grew to '' 532,902 million on a consolidated basis as against '' 446,460 million in the previous year - indicating a robust growth of 19.4%. The growth was broad based across geographies as both Americas and Europe contributed in line with overall business growth. The Company also saw healthy growth across business segments in Communications, Media and Entertainment (CME) and Enterprise verticals.

The EBITDA on a consolidated basis for the Financial Year 2023 was '' 80,288 million, similar to the previous year’s EBITDA of '' 80,200 million. The resultant EBITDA margins were in the range of 15.1% in FY 2023 compared to 18.1% in FY 2022. The post-tax profit of the Company was reduced to '' 48,313 million in FY 2023 as against '' 55,661 million in FY 2022.

The Company saw robust demand for digital transformation services with a focus on customer experience and cloud. The Company has seen new deal wins close to USD 3,000 million during the year, indicating a healthy growth momentum across all business verticals. Your Company’s investments in Enterprise SaaS and Hi-tech capabilities will help

it cater to increasing modernization demands from businesses in the Financial Year 2024 and beyond.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT

There have been no material changes and commitments which affect the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this report.

ACQUISITIONS

Your company made the following acquisition during the FY 2022-23.

THIRDWARE SOLUTIONS LIMITED

The Company acquired 100% of the share capital of Thirdware Solutions Limited ("Thirdware”) on June 3, 2022 at a consideration up to USD 42 million including earnouts. Thirdware is a global player in Enterprise Applications and will enhance the Company’s digital solutions and services in automotive consultant and design, development and implementation in areas like ERP (Enterprise Resource Planning), EPM (Enterprise Performance Management), RPA (Robotic Process Automation) and IloT (Industrial Internet of Things). These capabilities will give the Company an edge in the manufacturing space.

UPDATE ON MERGER

Your directors at their meeting held on January 31, 2021 approved the Scheme of Merger of Tech Mahindra Business Services Limited (TMBSL) and Born Commerce Private Limited (Born) with the Company with the appointed date as April 1, 2021.

Hon’ble NCLT, Mumbai bench and Hon’ble NCLT, Chennai bench vide their order dated January 5, 2023 and January 12, 2023 respectively, approved the scheme of merger by absorption of the TMBSL and Born with the Company and their respective shareholders and the said Scheme has become effective on February 16, 2023.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES OF THE COMPANY

The performance and financial position of the subsidiaries, associates, and joint venture companies included in the consolidated financial statement is provided in accordance with the provisions of Section

129 read with Rule 5 of the Companies (Accounts) Rules, 2014 containing the salient features of the financial statement of the Company’s subsidiaries/joint ventures or associate companies in Form AOC - 1 in “Annexure I” to this report.

Pursuant to Rule 8(5)(iv) of the Companies (Accounts) Rules, 2014, the names of the companies which have been incorporated or ceased to be the subsidiaries, joint ventures or associate companies during the year are provided in “Annexure II” to this report. The Company is actively pursuing the initiative on the consolidation of its subsidiaries/branches to optimize the operational costs. During the year under review, your Company has closed/merged twenty subsidiaries.

HUMAN RESOURCES

The employees of the Company are the most critical asset to your Company. The Company has taken several steps to protect, retain, and improve the competencies of these assets including:

Hiring: Forecast to Fulfilment

Your Company has streamlined its talent hiring process adopting some best-in-class practices. By building predictability in talent planning & forecasting for new age skills, your Company has been able to fuel business growth. Your Company has revamped its Buddy Referral programs to recruit talent from existing employee networks while offering attractive incentives. Embracing diversity in the hiring process has improved the global and local representation of talent within the organization. The Company has also redesigned its Candidate Engagement process to focus on creating positive experiences from the issuing joining offer letter to internal deployment to client projects. With rigor in talent allocation and proactive skilling of bench talent, your Company has been able to increase its internal fulfilment to 71% from 48% which is the best in the industry.

Learning: Skilling on the job

With the growth in digital business, your Company has been transforming its workforce both at speed and scale. The Company accelerated skilling initiatives to keep up with the pace of technological developments and built a ‘future-ready’ talent pool. #NAD Learn, the Al-based platform with interactive, on-demand, contextual and hyper-personalised up-skilling is helping the Company develop full-stack professionals. Your Company has supplemented this with young leadership development programs as well

as new policies to promote niche skilling and fast-track career growth. Employees can learn and grow as a Fresher through Elevate, in customer deployments through Project Skilling, for career progression through Future Skilling and into the leadership pipeline through journey-based programs. The Company also offers super-specialization skilling programs including Architect CoE, HiPOT programs at units and Program Manager CoE through EMBARK. Some new programs that the Company has recently launched for high-potential talent development include MALT and TrIBE.

Leadership: Integrative Thinking

The natural culture of empowerment that was supercharged during the pandemic continues to be the mainstay in the current hybrid work environment. Your Company aims to help employees imbibe mindsets & behaviors for the future which include a renewed focus on Integrative Thinking, Business & Financial Acumen, Bias for Action, Closure over Follow-up, Data over Emotions and Extreme Ownership. This was reinforced through the adoption of an industry leading learning platform - Harvard Manage Mentor Spark aimed at imparting best-in-class training at every level in realtime. Your Company has a robust Talent Management process for developing the leadership talent pipeline and has adopted consistent coaching practices for managers. Apart from Coaching, the employees have experienced new forms of learning with technology-enabled tools and pedagogies. For example, the ‘Wheel of Life’ is a customized self-coaching tool with gamified journeys, and personalized Habit Tracking making personal and professional well-being goals accessible to every employee.

Performance: Feedback focused

Your Company launched the Annual Performance Feedback cycle in December 2022. In order to build a culture where performance is enabled through feedback, Managers have been trained to have better performance review dialogues with their direct reports and work on an outcome-based evaluation rather than process or effort measurement. Your Company is creating a High-Performance Culture through hyper-personalized Incentive plans. Your Company has a suite of Incentive plans that are designed to create a strong alignment between Individual growth and Organization performance.

Wellness: Collective well-being

Your Company puts a happier, healthier and more productive workforce at the core of its business, policies and decisions. Your Company has designed

initiatives covering eight dimensions of wellness -Physical, Occupational, Emotional, Spiritual, Social, Environmental, Financial and Intellectual. The focus on preventative care with Corporate paid preventive health check, on-campus doctor consultations & counselling programs, helps employees diagnose any health condition in advance. To tackle IT industry specific issues, the Company organizes wellness sessions on Ergonomics, Healthy eating, Lifestyle management etc. Multiple tech-enabled wellness interventions like Kick the Butt (Smoking Cessation Program), Bend it like TechM (Guide to Ergonomics), Dump the Plump (Weight loss challenge) etc. have helped employees create healthier habits. Through the People Care program, managers are encouraged to show their human side and empower their team members to pursue collective well-being.

Communication: Building purpose

A robust communication process is at the heart of the Company’s vibrant culture. Employees are kept connected and informed through multiple media. Your Company’s 360-degree communication framework ensures employees have access to connect with leaders, peers and the external world. With publications, platforms, storytelling, campaigns, and connects, the organizational culture is shared with all. Your Company shares stories of diverse individuals achieving extraordinary things using structured formats like #RiseFromWithin. Leaders in the Company share not just business updates and success stories but personal anecdotes that reinforce the belief of a shared destiny.

Engagement: Hybrid connects

For an increasingly hybrid workplace, the Company has designed several virtual ‘water-cooler’ moments like All Hand Meets with CXO, Prime Time, Location Connects etc. along with family connects. Employees have platforms like MS Teams and Cisco WebEx for collaborative yet decentralized working. Your Company also organized on-ground engagement linked to TechM’s FIDE partnership for the Chess Olympiad. TechM CARES Action Planning workshops were also organized across different business units to implement changes based on employee feedback. Your Company also organized more than 1,200 engagement programs globally linked to Rise Refresh.

Rise Refresh: #TogetherWeRise

For more than a decade, the Rise philosophy has inspired employees from across the Mahindra Group to come to work and build something meaningful.

Since then, the world has changed with the rise of disruptive technologies, changing start-up ecosystem, climate change and recently, the pandemic. This is why, the Company has defined a new core purpose and brand pillars of Rise to simplify and sharpen its commitments. Your Company has leveraged every possible medium to ensure that this is communicated to all employees. From the conventional posters, communities, blogs, leader-bytes, microsite, quizzes and signatures route to the unconventional music, memes, WhatsApp stickers, GenZ lingo, podcast conversations and comic strips, Rise has touched the heart of every employee.

Diversity: Respecting Individuality

Your Company believes that respecting diversity and ensuring inclusion is fundamentally the right thing to do. It respects, embraces and celebrates the uniqueness of every individual. This also links back to the stated objective of the Company to be human-centered by encouraging associates to bring their most authentic selves to work. Your Company initiated the Maternity Assistance Program (MAP) to support employees who were on Maternity Leave in their transition back to work. The Company has also organized several Fireside chats featuring women with STEAM (Science, Technology, Engineering, Arts, Mathematics) roles to inspire others to grow in these fields. Through the ‘Restart’ Program, the Company aims to help Women IT Professionals restart their career after a break.

Recognition: Appreciation always

Your Company believes in appreciating, recognizing, and celebrating by building a culture where good work and behavior are appreciated. The Company has designed specialized recognition programs where rewards, tenure, performance, and contribution are celebrated, often with the loved ones of employees. The recognition program is centered around n = 1, that is, the individual at the heart of everything. A key part of personalizing recognition is to bring it to the desk of every employee. This is enabled by the KUDOS portal that offers recognition badges as well as redemption options for the points earned. Giving employees the ability to appreciate colleagues and sustained campaigns have led your Company to have an industry leading rewards penetration of ~74% including monetary and non-monetary recognition. Tenure is rewarded with personalized gifts for both the employee and their family members. Lastly, there are several organizational level awards for outstanding achievements like the ACE, STAR, Location Council and Spotlight awards.

HR Digitization: Experiencing technology

Your Company has revolutionized employee experience by deploying technology at different touchpoints of their lifecycle. Your Company continued its internal automation focus by using Robotic Process Automation for completing common workforce actions to reduce manual work. Your Company has also integrated HR Chatbot UVO and Technical Support Chatbot ATOM into MS Teams making it easier to perform workforce actions like leave applications, pending approvals, ticket registrations etc. Developing an "Attrition Prediction Model” has provided Your Company with an early warning system predicting the employees’ likelihood to quit, giving the Business HR team the ability to stage an intervention. The Company has also explored the use of Metaverse where three dimensional avatars interact in a virtual world to develop modules for hiring and on-boarding. Translating these experiences to mobile devices, the Company has developed ‘The Wheel of Life’ application as a self-coaching tool.

QUALITY

The Company continues its focus on quality and strives to exceed customer expectations at all times. During the year, it continued to strengthen the implementation of Quality systems and upgraded the processes/systems to comply with CMMI V 2.0 for both Development and Services and currently assessed for maturity level 5. Similarly it underwent various upgrade and re-certification audits for multiple standards during the year in order to meet client demands and enhance value delivery - successfully re-certified, ISO 9001:2015 (Quality Management System), ISO 20000-1:2018 (Information Technology Service Management System), ISO 27001:2013 (Information Security Management System), ISO 27701:2019 (Privacy Information Management System), TL9000 R 6.2/ R5.7 (Quality Management Systems for Tele Communications industry), ISO 13485:2016 (Quality Management Systems for medical devices - scope of certification limited to medical devices business within Tech Mahindra), AS9100 Rev D (Standard for Aerospace domain - scope of certification limited to the aerospace business within Tech Mahindra), ISO 17025:2017 - Laboratory Quality Management Systems for our device testing labs.

In addition to these, your Company also maintains its commitment to health, safety and environment by continually improving its processes in accordance with ISO 14001:2015 (Environmental Management System) and ISO 45001: 2018 (Occupational Health and Safety

Assessment Series) standards. Your Company is also certified on ISO 22301:2012 (Societal Security and Business Continuity Management System) and has a comprehensive Business Continuity and Disaster Recovery framework, to prevent potential business disruptions in the event of any disaster. It has processes that helped resume services to customer’s acceptable service levels. Automated Service Desk with SLAs for enabling business and Vulnerability Assessment and Penetration Testing Lab for secured corporate network operations are highlights that showcase the information security posture of the Organization.

Tech Mahindra (IT Division) has been assessed for the implementation of high maturity business excellence practices at Mahindra Group (Services Sector). It has been assessed at TMW Maturity Stage 7 (on scale of 1-10 stages) of Mahindra Business Excellence Framework - The Mahindra Way. These certifications are testimony of the robustness of business processes and at large, the quality culture imbibed in the organization.

Your Company has institutionalized the Deliverability Risk Assessment (DRA) practice - to assess the readiness and to identify risks at the beginning of the program, continued to strengthen the process for transforming Quality Assurance processes & delivery methods to adopt and strengthen Delivery excellence, Risk governance, and further enhance automation to enable quality delivery to the customer. Quality index which is a measure of quality of products and services delivery is institutionalized.

The Company is ensuring all these initiatives are in place, to ensure that it delivers as stated in its Quality Policy.

DIRECTORS

During the year under review, all Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Independent Directors have also given declaration of compliance with Rules 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014, with respect to their name appearing in the data bank of Independent Directors maintained by the Indian Institute of Corporate Affairs.

Pursuant to the provisions of Section 152(6)(c) of the Companies Act, 2013, Mr. Manoj Bhat, Director (DIN: 05205447) is liable to retire by rotation and being eligible offers himself for reappointment.

During the year under review, Ms. Penelope Fowler (DIN: 09591815) was appointed as Additional Director by the Board of Directors of the Company on May 13, 2022. She was further appointed as an Independent Director pursuant to the special resolution passed by the shareholders at the Annual General Meeting held on July 26, 2022 for a period of 5 years.

In view of the retirement of Mr. C. P Gurnani, Managing Director and CEO, the Board of Directors at its meeting held on June 15, 2023, based on the recommendation of the Nomination and Remuneration Committee approved the Appointment of Mr. Mohit Joshi, (DIN: 08339247) as Additional Director with effect from June 20, 2023 to hold office up to the date of ensuing Annual General Meeting. Further in order to ensure smooth transition into the role of Managing Director as Mr. C. P. Gurnani would retire on December 19, 2023, Mr. Mohit Joshi was also appointed as a Whole Time Director designated as Managing Director (Designate) and Key Managerial Personnel with effect from June 20, 2023 up to December 19, 2023 subject to the approval of the members of the Company and the Central Government.

The Board of Directors, based on the recommendation of Nomination and Remuneration Committee also approved the appointment of Mr. Mohit Joshi as Managing Director & Chief Executive Officer of the Company and Key Managerial Personnel under the Companies Act, 2013 from December 20, 2023 to June 19, 2028 (both days inclusive), subject to approval of the members of the Company and the Central Government.

The Board recommends the appointment of Mr. Manoj Bhat and Mr. Mohit Joshi to the Members at the ensuing Annual General Meeting. The brief profile of Mr. Manoj Bhat and Mr. Mohit Joshi is given in the Notice of the Annual General Meeting.

In terms of Regulation 24(1) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, Mr. T. N. Manoharan, Lead Independent Director of the Company has been appointed as Director on the Board of Tech Mahindra (Americas) Inc., a wholly

owned unlisted material subsidiary of the Company with effect from May 21, 2019.

In the opinion of the Board of Directors, the Independent Directors have relevant proficiency, expertise and experience.

FAMILIARISATION PROGRAMME

These programmes aim to provide insights into the Company to enable the Independent Directors to understand its business in depth and contribute significantly to the Company. The details of the program for familiarisation of the Independent Directors with the Company are available on its website and can be accessed at https://insights.techmahindra.com/ investors/tml-familarisation-progarmmes-for-IDs.pdf

The Board of Directors are regularly updated on changes in statutory provisions like amendments in Corporate Laws, SEBI Regulations, Taxation Laws and People related laws as applicable at the quarterly Board meetings. The Board members are also updated on the Risk universe applicable to the Company’s business. The MD & CEO of the Company had quarterly sessions with Board members sharing updates about the Company’s business strategy, operations and the key trends in the IT industry that are relevant to the Company. These updates help the Board members in keeping abreast of key changes and their impact on the Company. Further Subject Knowledge Experts from various fields are also invited to the meetings of the Board/Committees to appraise the Board Members of the latest developments in the IT and the business.

TRAINING

The Company has laid down a policy on the training of Independent Directors as part of its governance policies. The Senior Leadership of the Company periodically updates the Directors on regulatory changes, business strategy and operations.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Regulation 19 read with Schedule II, Part D of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has devised a policy on evaluating the performance of the Board of Directors, the Chairman, Committees, and Individual Directors. The evaluation process was carried out through a web-based portal. The summary of the evaluation reports

was presented to the respective Committees and the Board. The Directors had given positive feedback on the overall functioning of the Committees and the Board. The suggestions made by the Directors in the evaluation process have been suitably incorporated in the processes.

NUMBER OF MEETINGS OF THE BOARD

The Board met five times during the Financial Year 2022-23. The meeting details are provided in the Corporate Governance report that forms part of this Annual Report. The maximum interval between any two meetings did not exceed 120 days as prescribed in the Companies Act, 2013 and SEBI Listing Regulations.

COMMITTEES OF THE BOARD

As on March 31, 2023, the Board has constituted seven Committees, namely, Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk Management Committee, Corporate Social Responsibility Committee, Investment Committee and Securities Allotment Committee. The details of terms of reference of each Committee and the meetings held during the year are given in the Corporate Governance Report.

The Company has also formed Group Governance Council comprising of Board Members and Senior Management in terms of the SEBI Circular No. SEBI/ HO/CFD/CMD/CIR /P/2018/79 dated May 10, 2018, considering it has a large number of subsidiaries.

POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION

The Governance policies laid down by the Board of Directors of your Company include:

i. Policy on the appointment and removal of Directors, Key Managerial Personnel and Senior Management.

ii. Policy on remuneration to the Directors, Key Managerial Personnel and Senior Management and other Employees.

The extract of these two policies is provided in "Annexure III”.

The policies are available on the website of the Company and can be accessed at https://insights. techmahindra.com/investors/Governance-Policies-including-remuneration-to-Directors-KMPS.pdf

SUCCESSION PLAN

In accordance with the principles of transparency and consistency, your Company has adopted governance policies for appointments, remuneration and evaluation of its Board of Directors, Key Managerial Personnel & Senior Management. In line with these Governance policies, the Company has established a formal Succession Planning Program for Key Managerial Personnel across the organization. The Board evaluates all such plans at a regular interval and institutes a formal program for filling any such critical position. The Board evaluates both internal and external candidates for such positions along with the recommendations of the management. The Company also has a leadership development program where it identifies high potential managers, and trains them to take up the positions of higher responsibility. The Company has identified the second line of leadership, which provides stability to the business in case of contingencies.

KEY MANAGERIAL PERSONNEL (KMP)

Pursuant to provisions of Section 203 of the Companies Act, 2013, Mr. C. P. Gurnani, Managing Director & Chief Executive Officer, Mr. Milind Kulkarni, Chief Financial Officer (up to May 31, 2022), Mr. Rohit Anand, Chief Financial Officer (w.e.f. June 1, 2022) and Mr. Anil Khatri, Company Secretary & Compliance Officer were the Key Managerial Personnel of the Company during the year under review.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, your Directors, based on the representation(s) received from the Operating Management and after due enquiry, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and, reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for the year ended on that date;

iii. proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts have been prepared on a going concern basis;

v. they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

vi. the proper systems to ensure compliance with the provisions of all applicable laws are in place and are adequate and operating effectively.

DETAILS WITH RESPECT TO ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has internal financial controls which are adequate and were operating effectively. The controls are adequate for ensuring the orderly and efficient conduct of the business, including adherence to the Company’s policies, the safeguarding of assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records and timely preparation of reliable financial information.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / PROCEEDINGS

There are no significant and material orders passed by the regulators or courts or tribunal, impacting the going concern status and the Company’s operations in the future.

Further no application against the Company has been filed or is pending under the Insolvency and Bankruptcy Code, 2016, nor has the Company done any one-time settlement with any Bank or Financial institutions.

STATUTORY AUDITORS

The members, in the 35^th Annual General Meeting (AGM) held on July 26, 2022, appointed M/s. B S R & Co. LLP, Chartered Accountants, [ICAI Firm’s Registration No. 101248W/W- 100022] as the Statutory Auditors of the Company, to hold office for a further term of five consecutive years from the conclusion of the 35^th AGM of the Company held in

the Financial Year 2021-22 until the conclusion of the AGM of the Company for the Financial Year 2026-27 on such remuneration as may be determined by the Board of Directors.

There are no qualifications, reservations, adverse remarks or disclaimers made in the audit report for the Financial Year 2022-23.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies

(Appointment and Remuneration of Managerial

Personnel) Rules, 2014, the Company had appointed Makarand Lele & Co., Practicing Company

Secretary, Pune to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is available at "Annexure IV” to this report. There are no qualifications, reservations, adverse remarks or disclaimers made in the Secretarial Audit Report.

COMPLIANCE WITH SECRETARIAL

STANDARDS

The Company has complied with the applicable Secretarial Standards.

ANNUAL RETURN

Pursuant to the provisions of Section 92(3) read with Section 134(3) (a) of the Companies Act, 2013, the Annual Return in Form MGT-7 is available on the website of the Company and can be accessed at https://insights.techmahindra.com/investors/mgt-7.pdf

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

During the year, the Company has transferred the unclaimed dividends of '' 2,13,40,674 to the Investor Education and Protection Fund. Further, 2,26,700 corresponding shares on which dividends were unclaimed for seven consecutive years were transferred to the fund as per the requirements of the IEPF Rules. The Members are requested to check the details of the unpaid dividend on the website of the Company and claim their dividend to avoid the shares from being transferred to IEPF.

MANAGERIAL REMUNERATION

Disclosures of the ratio of the remuneration of each director to the median employee’s remuneration and other details as required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014 as amended from time to time, are provided as "Annexure V”. None of the Directors or the Managing Director & CEO of the Company received any remuneration or commission from Subsidiary Companies of your Company.

The details of remuneration paid to the Directors including the Managing Director & CEO of the Company are provided in the Corporate Governance Report.

PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Companies Act, 2013 ("the Act”) read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. However, pursuant to first proviso to Section 136(1) of the Act, this report is being sent to the Shareholders excluding the aforesaid information. Any shareholder interested in obtaining said information may write to the Company Secretary at the Registered Office / Corporate Office of the Company and the said information is open for inspection at the Registered Office of the Company.

POLICY ON PREVENTION OF SEXUAL HARASSMENT

Your Company has laid down the Prevention of Sexual Harassment (POSH) policy which is available on its website. The Company has zero tolerance on Sexual Harassment at workplace. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The status of complaints received under POSH and redressed by the POSH Committee of the Company, during the Financial Year under review, are given below:

a) Number of complaints received during the year - 74

b) Number of complaints redressed during the year - 73@

c) Number of complaints pending for redressal as on March 31, 2023 - 3

@ - Includes 2 complaints received during the previous year and redressed during the year.

There are focused campaigns on the POSH policy within the Company and awareness drives that

take place. Furthermore, employees are required to undertake a mandatory certification on POSH to sensitize themselves and strengthen their awareness.

EMPLOYEE STOCK OPTION SCHEMES

During the year under review, there were no material changes in the Employee Stock Option Schemes (ESOPs) of the Company and the Schemes are in compliance with the SEBI Regulations on ESOPs.

As per Regulation 14 of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, the details of the ESOPs are uploaded on the website of the Company and can be accessed at https://insights.techmahindra. com/investors/details-of-esops-fy-2022-23.pdf

CORPORATE GOVERNANCE

A report on Corporate Governance covering among others composition of the Board of Directors, details of meetings of the Board and Committees along with a certificate for compliance with the conditions of Corporate Governance in accordance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, issued by the Statutory Auditors of the Company, forms part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of your Company’s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)

SEBI, vide its circular dated May 10, 2021, made BRSR mandatory for the top 1,000 listed companies (by market capitalization) with effect from the FY 2022-23. The Company voluntarily published BRSR for the Financial year 2021-22. The BRSR Report for the year 2022-23 is enclosed as part of this Annual Report.

In addition to the BRSR, the Integrated Annual Report of the Company provides an insight on the various ESG initiatives adopted by the Company. The ESG disclosures have been independently assured by KPMG.

COST RECORDS

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities of the Company.

RISK MANAGEMENT

The Risk Management Committee of the Board of Directors devised a Risk Management Policy and guides the operating management to identify risks, analyze their probability and impact and prepare mitigation plans. It periodically reviews the Risk Management Framework & Enterprise Risk Register which is presented by the Chief Risk Officer. The Company identifies all potential risks viz. economic, business, currency, operations, climate, governance, finance, cyber, business continuity etc. and prepares a mitigation plan for each of the risks. The elements of risk as identified by the Company with the impact and mitigation strategy are set out in the Management Discussion and Analysis Report.

ESTABLISHMENT OF VIGIL MECHANISM

The Company has laid down Whistle Blower Policy covering Vigil Mechanism with protective clauses for the Whistle Blowers. The Whistle Blower Policy is made available on the website of the Company.

DEPOSITS / LOANS & ADVANCES, GUARANTEES OR INVESTMENTS

The Company has not accepted any deposits from the public during the year under review. The particulars of loans/advances, guarantees and investments under Section 186 of the Companies Act, 2013 are given in the notes forming part of the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All transactions entered with Related Parties as defined under Section 2(76) of the Companies Act, 2013 and Regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, ("The Listing Regulations”), during the financial year under review were in the ordinary course of business and at an arm’s length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no transactions with related parties in the Financial Year which conflicted with the interest of the Company and required compliance of the provisions of Regulation 23 of the Listing Regulations.

Suitable disclosure as required by the Indian Accounting Standards (Ind AS 24) has been made in the notes forming part of the Financial Statements.

The Company has formulated a policy on the Related Party Transactions and dealing with Related Party Transactions which has been uploaded on the website of the Company and can be accessed at https:// insights.techmahindra.com/investors/Related-Party-Transactions-Policy.pdf

The particulars of related party transactions in prescribed Form AOC - 2 are attached as ‘Annexure VI”. Pursuant to Regulation 23(9) of the Listing Regulations, your Company has filed half yearly report on Related Party Transactions with the stock exchanges.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are provided in "Annexure VII” which forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY

The CSR vision of the Company is "Empowerment through Education.”

In compliance with the guidelines prescribed under Section 135 of the Companies Act, 2013, your Company has constituted a Corporate Social Responsibility (CSR) Committee of the Board. The CSR policy, covering the Objectives, Focus Areas, Governance Structure Monitoring and Reporting Framework among others is approved by the Board of Directors. In accordance with the amendments made in Section 135 in January 2021, the CSR Policy has been duly revised and is available on the website of the Company and can be accessed at https://insights. techmahindra.com/investors/tml-csr-policy-23.pdf

The Company has spent more than 2% of the average net profits of the Company during the three immediately preceding Financial Years on CSR.

The Company’s social initiatives are mainly carried out by Tech Mahindra Foundation and Mahindra Educational Institutions, Section 8 (erstwhile Section 25) Companies promoted by the Company.

TECH MAHINDRA FOUNDATION (TMF) EDUCATION

The key initiatives taken by TMF in the arena of school education include:

ALL ROUND IMPROVEMENT IN SCHOOL EDUCATION (ARISE)

Tech Mahindra Foundation’s educational initiatives under ARISE are long-term school improvement programmes, in partnership with local governments and partner organisations. The Foundation in 2022-23 worked with 18 government primary & secondary schools to transform them into model schools of excellence. A total of 5,224 students were positively impacted under this programme, of which 2,832 were girls.

During the year, the Foundation expanded its work for children with special needs through its ARISE programme. This programme is a variant of ARISE in which children with special needs are provided chronic therapy as well as special education to help them lead more fulfilling lives. Through 32 projects, the programme enabled 4,829 children with special needs to become better learners with greater independence in managing their lives. The Foundation has taken up the provision of assistive technology for these children as an important value addition to its work in ARISE .

SHIKSHAANTAR

Shikshaantar, envisioned as a programme for enhancing the capacity of government school teachers, has emerged as an important programme in the education portfolio of the Foundation. TMF works with the Municipal Corporation of Delhi by running their In-Service Teacher Education Institutes. With the merger of the MCDs, TMF now has the responsibility of training teachers from close to 1,500 primary schools in Delhi. During the year under review, as many as 4,379 teachers were trained as part of Shikshaantar. This included specially designed modules for Digital Literacy, Child Safety, Cyber Security and Mental Health that were delivered to the teachers in a hybrid mode.

MOBILE SCIENCE LAB & ROBOTICS LAB

In order to increase the footprint of its work in Education and reach the unreached, TMF launched a unique initiative in 2019-20 - The Mobile Science Lab (MSL). For this, a Mahindra bus has been remodeled to become a science lab on wheels and has been travelling from school to school in East Delhi to provide STEM learning for children in grades 3 and 4 in these

schools. The MSL program benefitted as many as 6,861 students and 77 teachers throughout the year.

Following the success of the MSL program, TMF has also set up a Robotics Lab at one of its ARISE schools in Delhi which is an all-girls school. This lab was inaugurated in November 2022, and nearly 300 girls from this school are the potential beneficiaries.

EMPLOYABILITY

Skills-for-Market Training (SMART) is the Foundation’s flagship programme in employability. It is built on the vision of an educated, enabled and empowered India, and the belief that educated and skilled youth are the country’s true strength. The programme started with 3 Centres in 2012 and is currently running over 85 Centres at 10 locations across India. These include SMART Centres, SMART Centres (training for people with disabilities), and SMART-T Centres (training in technical trades).

In 2022-23, your Company trained 17,641 young women and men under its SMART program, of which, 1,303 were persons with disabilities. More than 70% of the graduates are placed in jobs across multiple industries upon successful completion of the training. The average salaries being earned by the graduates of the SMART program have been steadily rising and saw a 10% jump over the previous year.

The Foundation’s commitment to setting new benchmarks in skill development in India has been underscored by the setting up of Tech Mahindra SMART Academies, which provide the highest quality of skill training to youngsters in Healthcare and Digital Technologies. During FY 2022-23, 3,584 students were trained at the nine Academies that are now functional - 5 in Healthcare, 3 in Digital Technologies, and 1 in Logistics.

TMF’S OUTREACH INITIATIVES

In addition to all the core programs described above, Tech Mahindra Foundation is now also implementing several outreach projects in collaboration with various agencies. As part of these, the TMF team members are engaged in activities such as community health initiatives, teacher training, provision of content for other large-scale projects, etc. As part of such outreach projects, TMF supported 20,734 beneficiaries, taking the total tally of direct beneficiaries for the year to 61,995. This is nearly 50% more than the number of direct beneficiaries for FY 2021-22, which stood at 41,374.

MAHINDRA EDUCATIONAL INSTITUTIONS (MEI)

MEI - a not-for-profit, 100% subsidiary of the Company has set up Mahindra Ecole Centrale in August 2014 - through a collaborative venture between Mahindra Educational Institutions and Ecole Centrale of Paris, France (now known as Centrale Supelec) and the JNTU Hyderabad - to offer undergraduate engineering programs. Through this strong Indo-French Collaboration with Centrale Supelec and Industry connect with Tech Mahindra, MEC has emerged as a disruptive player in the field of Technical Education.

MEI has sponsored the setting up of Mahindra University to introduce diverse streams of education in addition to Engineering. Further the Engineering stream is being transitioned to Mahindra University.

MAHINDRA UNIVERSITY (MU)

Mahindra University ("MU”) (sponsored by Mahindra Educational Institutions, ("MEI”) - a not-for-profit, 100% subsidiary of Tech Mahindra), was notified on May 20, 2020 by the Government of Telangana vide The Telangana State Private Universities (Establishment and Regulation) Act, 2018 for "educating future citizens for and of a better world”.

The Ecole Centrale School of Engineering (ECSoE) currently runs various UG, PG and Ph.D. programs in cutting-edge engineering departments. ECSoE also launched a Centre for Life Sciences and offers courses in biotechnology and computational biology under it. The school plans to launch the 2.5 year integrated programs in Biotechnology & CSE for AY 2023-24.

Cornell University’s SC Johnson College of Business, an ivy league institution is the "Academic Partner” for School of Management. Mahindra University’s School of Management (MU - SoM) will benefit significantly from Cornell University’s expertise in curriculum development, faculty exchange programs including some specialty courses delivery by the Cornell faculty to Mahindra University students, as well as student immersion at Cornell. The School of Management currently conducts BBA, BA, E-MBA, and MBA (starting in 2023) programs.

The School of Law, Mahindra University, commenced operations in September 2021 in Hyderabad offering 5-year integrated programs in BA LL.B and BBA LL.B. It was founded on the philosophy of securing justice, equality, and service to all sections of society. With the needs of modern society evolving rapidly, there is a renewed focus on the importance of the discipline of

law. The School of Law will aim to make a difference to the legal profession and practice by providing a diverse, flexible curriculum and pedagogy, touching on several aspects of domestic and international law, while appraising the students of the latest trends in academia and practice. Starting 2022, the School of Law has launched a 3-year LLB (Hons) program and intend to launch a 6-year integrated B.Tech LLB course starting Academic Year 2023.

The University also plans to launch the following programs/schools for the Academic Year 2023-24:

1. School of Media

a. 4-year B.Tech. (Computation & Media)

b. 3-year BA (Digital Media & Communication)

2. School of Hotel Management

a. 3-year B.Sc. (Hospitality & Hotel Administration)

In the academic year 2022, a total of 2,971 students were studying under various programs across all schools and departments. The new admissions for academic year 2022 are 1,236 students of which 1,128 students are in various UG programs, including School of Management and School of Law, 22 students in the PG programs of School of Engineering and 86 students in the Ph.D programs across all the schools.

The Annual Report on CSR activities is provided as "Annexure VIII”.

SUSTAINABILITY

Your Company aligns closely with the Mahindra Group’s ambition to Rise: Be People positive, Planet positive, and Trust positive. The Company holistically embraces ever greater responsibility towards protecting the environment, empowering the society, and providing good governance.

Your Company’s strategy for creating long-term sustainable value is by improving, scaling, and transparently communicating our ecological, social, and economic impacts. Our strong governance framework led by the Board of Directors of your Company, who have oversight of the Company’s overall strategy and future direction and ensures the planning and implementation of environmental and social programs.

The Company’s holistic approach enables to drive sustainable impact in alignment with leading global frameworks, initiatives, and agendas committed to furthering sustainability such as the TCFD, SASB, GRI, as well as the Paris Agreement, the UNGC and the UN SDGs.

As a business, the Company recognizes the value of following the UN SDGs (Sustainable Development Goals) of People, Planet, Prosperity, and Partnership and continues to create value through initiatives that cater directly to these aspects of our performance.

People:

• Great place to work: Working to enhance our organizational culture by enabling our associates with access to advanced technologies, providing Learning & Development opportunities to help develop their skills and areas of expertise and providing them with robust career development programmes.

• Work-life balance: Providing feasible and flexible work-life balance and integration along with a range of associate-friendly policies and processes to reduce attrition.

• Diversity and inclusion: Ensuring that our organization continues to transcend into the realms of gender diversity and includes people with disabilities as well as people from the LGBTQIA community as part of being a socially responsible business.

• Employee engagement & recognition:

Ensuring our associates are engaged, feel valued, and recognized through a robust performance management system, a flexible system of working, and an extensive system of benefits and perquisites.

• Individual Social Responsibility: Encouraging associates to contribute to the society & environment and make these activities an integral part of their day-to-day activities.

Planet:

• Carbon neutrality and Net zero: Committing to carbon neutrality (2030) and Net zero (2035) by switching to renewable energy through on site installations and open access; improving energy efficiency through installation of LEDs, sensors; boosting green investments by

implementing Carbon Price; optimizing business travel by enabling virtual meetings; encouraging use of public transport and carpooling to reduce employee commute emissions; carbon sequestration through tree plantation; moving towards a low carbon economy by optimizing operations to ensure environmental protection.

• No waste to landfill: Installing Organic Waste Converters and vermicomposting plants at own campuses to convert food waste to manure, cutting down their transportation emissions and reducing waste to landfill.

• No to plastic: Maintaining plastic-free campuses and encouraging all stakeholders to use ecofriendly and biodegradable materials. Spreading awareness and initiating campaigns on preventing single-use plastic.

• Reduce, Reuse, Recycle, Recover: Implementing the process of Reduce, Reuse, Recycle and Recover across the value chain to limit waste and enable a circular economy.

• Being water positive: Improving water efficiency and increasing water savings by using water sensors, restrictors and water-efficient coolers, recycling wastewater through STPs, and recharging groundwater levels with Rainwater Harvesting Pits.

• Promoting Biodiversity: Protecting local flora and fauna across all our locations to ensure that we do not adversely impact biodiversity through our operations.

Prosperity:

• Innovation: Embracing technology and innovation by incorporating IoT, Blockchain, AI and Machine Learning to develop a portfolio of sustainable solutions that help reduce emissions and other negative impacts of climate change.

• Green solutions: Investing in Sustainability reporting solution (i.Sustain) and Climate Risk Management platforms, Smart grid, Microgrid-As-A-Service, Community Action Platform for Energy, Integrated Electric Vehicle Charging systems (IEVCS), Smart data hubs and Smart Cities for our Customers to reduce their carbon emissions.

• Connecting with customers: Embracing brand equity by connecting with our customers to address their current and future needs and ensuring customer satisfaction.

Partnership

• Learning and Sharing: Partnering with collaborators & partner companies to create an alliance ecosystem and supplement each other’s capabilities on joint projects. Collaborating with academia, businesses, NGOs, and governments to address some of the global challenges like health care, climate change, inequality, etc.

• Sustainable supply chain: Ensuring that we are in synch with our value chain in our commitment towards climate action and helping our suppliers follow the highest standards of sustainable and ethical best practices within their own organizations.

Tech Mahindra has drafted its Integrated Annual report in accordance with Global Reporting standards and frameworks with the data assured by a third party thus complying with the highest transparency standards.

The Company’s progress against the sustainability targets and metrics are disclosed in the externally assured Integrated reports available on the website of the company- https://www.techmahindra.com/en-in/ sustainability/

AWARDS AND RECOGNITION

Your Company continued its quest for excellence in its chosen area of business to emerge as a true global brand. Several awards and rankings continue to endorse your Company as a thought leader in the industry. A few of the prominent Awards / recognitions received by the Company during the Financial Year 2022-23 include:

• Tech Mahindra won several medals in the USA for its people practices- Brandon Hall HCM Excellence Awards, Stevie Awards for Great Employers and was also included in the 2023 Bloomberg Gender-Equality Index (GEI).

• Tech Mahindra Philippines was certified as a Great Place to Work.

• The Economic Times bestowed Tech Mahindra with several recognitions including Great Manager Awards (People Business), Human Capital Awards and ‘Best Organizations for Women’ (Femina).

• Tech Mahindra was also recognized by Avtar and Seramount as "Champions” in Most Inclusive Companies Index and "Top 10” in Best Companies for Women in India.

• Dun & Bradstreet India recognized Tech Mahindra as a top performer in the ESG Performance -Software and BPM sector.

• Tech Mahindra won Frost & Sullivan’s Technology Innovation Leadership Award 2022 for Metaverse Technology Services.

• Tech Mahindra was recognized among the Iconic brands at ET Iconic Brands 2022.

• TechM amplifAI0->^ is awarded "Cool Product or Service of the Year in Business 2022.” at the 12^th Annual 2022 Business Excellence Awards by Globee® Business Awards.

• Tech Mahindra MEA was recognized for Ground-breaking products/services in Ecommerce at GITEX.

• Tech Mahindra was awarded ‘A’ rating in MSCI ESG ratings 2022.

• Tech Mahindra received the "Mahatma Award 2022 for Social Good & Impact - Decent Work and Economic Growth” for its SMART Program.

These awards are a reflection of the Company’s continued efforts in the fields of business, sustainability, human resource management and its sustained progress towards creating a better society for all.

ACKNOWLEDGEMENTS

Your directors place on records their appreciation for the contributions made by employees towards the success of your Company. Your directors gratefully acknowledge the co-operation and support received from the shareholders, customers, vendors, bankers, Regulatory and Governmental authorities in India and abroad.

For and on behalf of the Board

Anand G. Mahindra Place: Mumbai Chairman

Date: 15^th June, 2023 (DIN: 00004695)

Note: The Board of Directors at its meeting held on April 27, 2023, had approved the financial statements for the financial year 2023 and the Director''s Report along with the Annexures. However, in view of the appointment of Mr. Mohit Joshi as Additional Director and Whole Time Director, the revised Director''s Report was approved by the Board at its Meeting held on June 15, 2023.

1

Interim Dividend (Special Dividend) for the Financial Year ended March 31, 2022 and Final Dividend for the Financial Year ended March 31, 2021

---

Mar 31, 2023

Your directors are pleased to present the Thirty Sixth Annual Report along with the audited accounts of your Company for the year ended March 31, 2023.

FINANCIAL RESULTS (STANDALONE)

('' in Million)
For the year ended March 31	2023	2022#
Income	437,856	372,079
Profit Before Interest, Depreciation and Tax	58,978	72,383
Interest	(1,808)	(689)
Depreciation	(8,129)	(7,403)
Profit Before Tax	49,041	64,291
Provision for Taxation	(11,266)	(14,058)
Profit After Tax	37,775	50,233
Other Comprehensive Income	(2,480)	1,200
Balance brought forward from previous year	216,090	203,329
Profit available for appropriation	253,917	253,292
Equity Dividends	(46,705)1	(43,624)1
Transfer to retained earnings on account of options lapsed	99	74
Transferred from Special Economic Zone re-investment reserve on utilization	7,151	6,348
Balance carried forward	214,462	216,090

# - Figures for the previous year are restated after considering the amalgamation of Tech Mahindra Business Services Limited and Born Commerce Private Limited with the Company.

¹ Interim Dividend (Special Dividend) for the Financial Year ended March 31, 2023 and Final Dividend for the Financial Year ended March 31,2022

DIVIDEND

The Board of Directors on November 1, 2022 approved a special interim dividend of '' 18/- per share (i.e. 360%) on the par value of '' 5/- each which was paid by the Company to the shareholders whose names appeared in the Register of Members as on November 10, 2022, being the record date for the payment of dividend. Your Directors are pleased to recommend a final dividend of '' 32/- per share on par value of '' 5/- (i.e. 640%), payable to those Shareholders whose names appear in the Register of Members as on the Book Closure Date. Thus, the total dividend for the FY 2022-23 will be '' 50/- per share (i.e. 1000%) against the dividend of '' 45/- per share (i.e. 900%) paid for the Financial Year 2021-22.

The Board of your Company decided not to transfer any amount to the General Reserve for the year under review.

Your Company has formulated a Dividend Policy which is disclosed on the website of the Company and can be accessed at https://insights.techmahindra.com/ investors/tml-dividend-distribution-policy.pdf

SHARE CAPITAL

During the year under review, your Company allotted 2,313,996 equity shares on the exercise of stock options under various Employee Stock Option Schemes. Consequently, the issued, subscribed and paid-up equity share capital has increased from '' 4,859.17 million divided into 971,833,479 equity shares of '' 5/- each to '' 4,870.74 million divided into 974,147,475 equity shares of '' 5/- each.

ALTERATION OF ‘CAPITAL CLAUSE’ OF MEMORANDUM OF ASSOCIATION

Consequent to the merger of Tech Mahindra Business Services Limited and Born Commerce Private Limited with the Company, the Authorised Capital of the

Company increased from '' 8,336.50 million divided into 1,667,300,000 equity shares of '' 5/- each to '' 9,093 million divided into 1,818,600,000 equity shares of '' 5/- each.

Accordingly, the Capital Clause of the Memorandum of Association of the Company was altered and substituted with the new Clause V to reflect the corresponding changes in the Authorised Share Capital.

BUSINESS PERFORMANCE / FINANCIAL OVERVIEW

Imperative for businesses and your Company to stay relevant is the need to be cognizant of the tectonic shifts occurring around the world. Technological innovations, climate change and the need for inclusive growth and representation among others is defining the way organization’s function. Tech Mahindra has remained on the forefront of all cutting-edge technological advancements and harnessed many emerging technologies to transform customer and employee experiences. Your Company’s execution strategy is indexed to the pillars of client focus, portfolio synergy, operational rigor, new age technology bets and people transformation.

During the Financial Year ended on March 31, 2023, the Company’s revenues grew to '' 532,902 million on a consolidated basis as against '' 446,460 million in the previous year - indicating a robust growth of 19.4%. The growth was broad based across geographies as both Americas and Europe contributed in line with overall business growth. The Company also saw healthy growth across business segments in Communications, Media and Entertainment (CME) and Enterprise verticals.

The EBITDA on a consolidated basis for the Financial Year 2023 was '' 80,288 million, similar to the previous year’s EBITDA of '' 80,200 million. The resultant EBITDA margins were in the range of 15.1% in FY 2023 compared to 18.1% in FY 2022. The post-tax profit of the Company was reduced to '' 48,313 million in FY 2023 as against '' 55,661 million in FY 2022.

The Company saw robust demand for digital transformation services with a focus on customer experience and cloud. The Company has seen new deal wins close to USD 3,000 million during the year, indicating a healthy growth momentum across all business verticals. Your Company’s investments in Enterprise SaaS and Hi-tech capabilities will help

it cater to increasing modernization demands from businesses in the Financial Year 2024 and beyond.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT

There have been no material changes and commitments which affect the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this report.

ACQUISITIONS

Your company made the following acquisition during the FY 2022-23.

THIRDWARE SOLUTIONS LIMITED

The Company acquired 100% of the share capital of Thirdware Solutions Limited ("Thirdware”) on June 3, 2022 at a consideration up to USD 42 million including earnouts. Thirdware is a global player in Enterprise Applications and will enhance the Company’s digital solutions and services in automotive consultant and design, development and implementation in areas like ERP (Enterprise Resource Planning), EPM (Enterprise Performance Management), RPA (Robotic Process Automation) and IloT (Industrial Internet of Things). These capabilities will give the Company an edge in the manufacturing space.

UPDATE ON MERGER

Your directors at their meeting held on January 31, 2021 approved the Scheme of Merger of Tech Mahindra Business Services Limited (TMBSL) and Born Commerce Private Limited (Born) with the Company with the appointed date as April 1, 2021.

Hon’ble NCLT, Mumbai bench and Hon’ble NCLT, Chennai bench vide their order dated January 5, 2023 and January 12, 2023 respectively, approved the scheme of merger by absorption of the TMBSL and Born with the Company and their respective shareholders and the said Scheme has become effective on February 16, 2023.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES OF THE COMPANY

The performance and financial position of the subsidiaries, associates, and joint venture companies included in the consolidated financial statement is provided in accordance with the provisions of Section

129 read with Rule 5 of the Companies (Accounts) Rules, 2014 containing the salient features of the financial statement of the Company’s subsidiaries/joint ventures or associate companies in Form AOC - 1 in “Annexure I” to this report.

Pursuant to Rule 8(5)(iv) of the Companies (Accounts) Rules, 2014, the names of the companies which have been incorporated or ceased to be the subsidiaries, joint ventures or associate companies during the year are provided in “Annexure II” to this report. The Company is actively pursuing the initiative on the consolidation of its subsidiaries/branches to optimize the operational costs. During the year under review, your Company has closed/merged twenty subsidiaries.

HUMAN RESOURCES

The employees of the Company are the most critical asset to your Company. The Company has taken several steps to protect, retain, and improve the competencies of these assets including:

Hiring: Forecast to Fulfilment

Your Company has streamlined its talent hiring process adopting some best-in-class practices. By building predictability in talent planning & forecasting for new age skills, your Company has been able to fuel business growth. Your Company has revamped its Buddy Referral programs to recruit talent from existing employee networks while offering attractive incentives. Embracing diversity in the hiring process has improved the global and local representation of talent within the organization. The Company has also redesigned its Candidate Engagement process to focus on creating positive experiences from the issuing joining offer letter to internal deployment to client projects. With rigor in talent allocation and proactive skilling of bench talent, your Company has been able to increase its internal fulfilment to 71% from 48% which is the best in the industry.

Learning: Skilling on the job

With the growth in digital business, your Company has been transforming its workforce both at speed and scale. The Company accelerated skilling initiatives to keep up with the pace of technological developments and built a ‘future-ready’ talent pool. #NAD Learn, the Al-based platform with interactive, on-demand, contextual and hyper-personalised up-skilling is helping the Company develop full-stack professionals. Your Company has supplemented this with young leadership development programs as well

as new policies to promote niche skilling and fast-track career growth. Employees can learn and grow as a Fresher through Elevate, in customer deployments through Project Skilling, for career progression through Future Skilling and into the leadership pipeline through journey-based programs. The Company also offers super-specialization skilling programs including Architect CoE, HiPOT programs at units and Program Manager CoE through EMBARK. Some new programs that the Company has recently launched for high-potential talent development include MALT and TrIBE.

Leadership: Integrative Thinking

The natural culture of empowerment that was supercharged during the pandemic continues to be the mainstay in the current hybrid work environment. Your Company aims to help employees imbibe mindsets & behaviors for the future which include a renewed focus on Integrative Thinking, Business & Financial Acumen, Bias for Action, Closure over Follow-up, Data over Emotions and Extreme Ownership. This was reinforced through the adoption of an industry leading learning platform - Harvard Manage Mentor Spark aimed at imparting best-in-class training at every level in realtime. Your Company has a robust Talent Management process for developing the leadership talent pipeline and has adopted consistent coaching practices for managers. Apart from Coaching, the employees have experienced new forms of learning with technology-enabled tools and pedagogies. For example, the ‘Wheel of Life’ is a customized self-coaching tool with gamified journeys, and personalized Habit Tracking making personal and professional well-being goals accessible to every employee.

Performance: Feedback focused

Your Company launched the Annual Performance Feedback cycle in December 2022. In order to build a culture where performance is enabled through feedback, Managers have been trained to have better performance review dialogues with their direct reports and work on an outcome-based evaluation rather than process or effort measurement. Your Company is creating a High-Performance Culture through hyper-personalized Incentive plans. Your Company has a suite of Incentive plans that are designed to create a strong alignment between Individual growth and Organization performance.

Wellness: Collective well-being

Your Company puts a happier, healthier and more productive workforce at the core of its business, policies and decisions. Your Company has designed

initiatives covering eight dimensions of wellness -Physical, Occupational, Emotional, Spiritual, Social, Environmental, Financial and Intellectual. The focus on preventative care with Corporate paid preventive health check, on-campus doctor consultations & counselling programs, helps employees diagnose any health condition in advance. To tackle IT industry specific issues, the Company organizes wellness sessions on Ergonomics, Healthy eating, Lifestyle management etc. Multiple tech-enabled wellness interventions like Kick the Butt (Smoking Cessation Program), Bend it like TechM (Guide to Ergonomics), Dump the Plump (Weight loss challenge) etc. have helped employees create healthier habits. Through the People Care program, managers are encouraged to show their human side and empower their team members to pursue collective well-being.

Communication: Building purpose

A robust communication process is at the heart of the Company’s vibrant culture. Employees are kept connected and informed through multiple media. Your Company’s 360-degree communication framework ensures employees have access to connect with leaders, peers and the external world. With publications, platforms, storytelling, campaigns, and connects, the organizational culture is shared with all. Your Company shares stories of diverse individuals achieving extraordinary things using structured formats like #RiseFromWithin. Leaders in the Company share not just business updates and success stories but personal anecdotes that reinforce the belief of a shared destiny.

Engagement: Hybrid connects

For an increasingly hybrid workplace, the Company has designed several virtual ‘water-cooler’ moments like All Hand Meets with CXO, Prime Time, Location Connects etc. along with family connects. Employees have platforms like MS Teams and Cisco WebEx for collaborative yet decentralized working. Your Company also organized on-ground engagement linked to TechM’s FIDE partnership for the Chess Olympiad. TechM CARES Action Planning workshops were also organized across different business units to implement changes based on employee feedback. Your Company also organized more than 1,200 engagement programs globally linked to Rise Refresh.

Rise Refresh: #TogetherWeRise

For more than a decade, the Rise philosophy has inspired employees from across the Mahindra Group to come to work and build something meaningful.

Since then, the world has changed with the rise of disruptive technologies, changing start-up ecosystem, climate change and recently, the pandemic. This is why, the Company has defined a new core purpose and brand pillars of Rise to simplify and sharpen its commitments. Your Company has leveraged every possible medium to ensure that this is communicated to all employees. From the conventional posters, communities, blogs, leader-bytes, microsite, quizzes and signatures route to the unconventional music, memes, WhatsApp stickers, GenZ lingo, podcast conversations and comic strips, Rise has touched the heart of every employee.

Diversity: Respecting Individuality

Your Company believes that respecting diversity and ensuring inclusion is fundamentally the right thing to do. It respects, embraces and celebrates the uniqueness of every individual. This also links back to the stated objective of the Company to be human-centered by encouraging associates to bring their most authentic selves to work. Your Company initiated the Maternity Assistance Program (MAP) to support employees who were on Maternity Leave in their transition back to work. The Company has also organized several Fireside chats featuring women with STEAM (Science, Technology, Engineering, Arts, Mathematics) roles to inspire others to grow in these fields. Through the ‘Restart’ Program, the Company aims to help Women IT Professionals restart their career after a break.

Recognition: Appreciation always

Your Company believes in appreciating, recognizing, and celebrating by building a culture where good work and behavior are appreciated. The Company has designed specialized recognition programs where rewards, tenure, performance, and contribution are celebrated, often with the loved ones of employees. The recognition program is centered around n = 1, that is, the individual at the heart of everything. A key part of personalizing recognition is to bring it to the desk of every employee. This is enabled by the KUDOS portal that offers recognition badges as well as redemption options for the points earned. Giving employees the ability to appreciate colleagues and sustained campaigns have led your Company to have an industry leading rewards penetration of ~74% including monetary and non-monetary recognition. Tenure is rewarded with personalized gifts for both the employee and their family members. Lastly, there are several organizational level awards for outstanding achievements like the ACE, STAR, Location Council and Spotlight awards.

HR Digitization: Experiencing technology

Your Company has revolutionized employee experience by deploying technology at different touchpoints of their lifecycle. Your Company continued its internal automation focus by using Robotic Process Automation for completing common workforce actions to reduce manual work. Your Company has also integrated HR Chatbot UVO and Technical Support Chatbot ATOM into MS Teams making it easier to perform workforce actions like leave applications, pending approvals, ticket registrations etc. Developing an "Attrition Prediction Model” has provided Your Company with an early warning system predicting the employees’ likelihood to quit, giving the Business HR team the ability to stage an intervention. The Company has also explored the use of Metaverse where three dimensional avatars interact in a virtual world to develop modules for hiring and on-boarding. Translating these experiences to mobile devices, the Company has developed ‘The Wheel of Life’ application as a self-coaching tool.

QUALITY

The Company continues its focus on quality and strives to exceed customer expectations at all times. During the year, it continued to strengthen the implementation of Quality systems and upgraded the processes/systems to comply with CMMI V 2.0 for both Development and Services and currently assessed for maturity level 5. Similarly it underwent various upgrade and re-certification audits for multiple standards during the year in order to meet client demands and enhance value delivery - successfully re-certified, ISO 9001:2015 (Quality Management System), ISO 20000-1:2018 (Information Technology Service Management System), ISO 27001:2013 (Information Security Management System), ISO 27701:2019 (Privacy Information Management System), TL9000 R 6.2/ R5.7 (Quality Management Systems for Tele Communications industry), ISO 13485:2016 (Quality Management Systems for medical devices - scope of certification limited to medical devices business within Tech Mahindra), AS9100 Rev D (Standard for Aerospace domain - scope of certification limited to the aerospace business within Tech Mahindra), ISO 17025:2017 - Laboratory Quality Management Systems for our device testing labs.

In addition to these, your Company also maintains its commitment to health, safety and environment by continually improving its processes in accordance with ISO 14001:2015 (Environmental Management System) and ISO 45001: 2018 (Occupational Health and Safety

Assessment Series) standards. Your Company is also certified on ISO 22301:2012 (Societal Security and Business Continuity Management System) and has a comprehensive Business Continuity and Disaster Recovery framework, to prevent potential business disruptions in the event of any disaster. It has processes that helped resume services to customer’s acceptable service levels. Automated Service Desk with SLAs for enabling business and Vulnerability Assessment and Penetration Testing Lab for secured corporate network operations are highlights that showcase the information security posture of the Organization.

Tech Mahindra (IT Division) has been assessed for the implementation of high maturity business excellence practices at Mahindra Group (Services Sector). It has been assessed at TMW Maturity Stage 7 (on scale of 1-10 stages) of Mahindra Business Excellence Framework - The Mahindra Way. These certifications are testimony of the robustness of business processes and at large, the quality culture imbibed in the organization.

Your Company has institutionalized the Deliverability Risk Assessment (DRA) practice - to assess the readiness and to identify risks at the beginning of the program, continued to strengthen the process for transforming Quality Assurance processes & delivery methods to adopt and strengthen Delivery excellence, Risk governance, and further enhance automation to enable quality delivery to the customer. Quality index which is a measure of quality of products and services delivery is institutionalized.

The Company is ensuring all these initiatives are in place, to ensure that it delivers as stated in its Quality Policy.

DIRECTORS

During the year under review, all Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Independent Directors have also given declaration of compliance with Rules 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014, with respect to their name appearing in the data bank of Independent Directors maintained by the Indian Institute of Corporate Affairs.

Pursuant to the provisions of Section 152(6)(c) of the Companies Act, 2013, Mr. Manoj Bhat, Director (DIN: 05205447) is liable to retire by rotation and being eligible offers himself for reappointment.

During the year under review, Ms. Penelope Fowler (DIN: 09591815) was appointed as Additional Director by the Board of Directors of the Company on May 13, 2022. She was further appointed as an Independent Director pursuant to the special resolution passed by the shareholders at the Annual General Meeting held on July 26, 2022 for a period of 5 years.

In view of the retirement of Mr. C. P Gurnani, Managing Director and CEO, the Board of Directors at its meeting held on June 15, 2023, based on the recommendation of the Nomination and Remuneration Committee approved the Appointment of Mr. Mohit Joshi, (DIN: 08339247) as Additional Director with effect from June 20, 2023 to hold office up to the date of ensuing Annual General Meeting. Further in order to ensure smooth transition into the role of Managing Director as Mr. C. P. Gurnani would retire on December 19, 2023, Mr. Mohit Joshi was also appointed as a Whole Time Director designated as Managing Director (Designate) and Key Managerial Personnel with effect from June 20, 2023 up to December 19, 2023 subject to the approval of the members of the Company and the Central Government.

The Board of Directors, based on the recommendation of Nomination and Remuneration Committee also approved the appointment of Mr. Mohit Joshi as Managing Director & Chief Executive Officer of the Company and Key Managerial Personnel under the Companies Act, 2013 from December 20, 2023 to June 19, 2028 (both days inclusive), subject to approval of the members of the Company and the Central Government.

The Board recommends the appointment of Mr. Manoj Bhat and Mr. Mohit Joshi to the Members at the ensuing Annual General Meeting. The brief profile of Mr. Manoj Bhat and Mr. Mohit Joshi is given in the Notice of the Annual General Meeting.

In terms of Regulation 24(1) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, Mr. T. N. Manoharan, Lead Independent Director of the Company has been appointed as Director on the Board of Tech Mahindra (Americas) Inc., a wholly

owned unlisted material subsidiary of the Company with effect from May 21, 2019.

In the opinion of the Board of Directors, the Independent Directors have relevant proficiency, expertise and experience.

FAMILIARISATION PROGRAMME

These programmes aim to provide insights into the Company to enable the Independent Directors to understand its business in depth and contribute significantly to the Company. The details of the program for familiarisation of the Independent Directors with the Company are available on its website and can be accessed at https://insights.techmahindra.com/ investors/tml-familarisation-progarmmes-for-IDs.pdf

The Board of Directors are regularly updated on changes in statutory provisions like amendments in Corporate Laws, SEBI Regulations, Taxation Laws and People related laws as applicable at the quarterly Board meetings. The Board members are also updated on the Risk universe applicable to the Company’s business. The MD & CEO of the Company had quarterly sessions with Board members sharing updates about the Company’s business strategy, operations and the key trends in the IT industry that are relevant to the Company. These updates help the Board members in keeping abreast of key changes and their impact on the Company. Further Subject Knowledge Experts from various fields are also invited to the meetings of the Board/Committees to appraise the Board Members of the latest developments in the IT and the business.

TRAINING

The Company has laid down a policy on the training of Independent Directors as part of its governance policies. The Senior Leadership of the Company periodically updates the Directors on regulatory changes, business strategy and operations.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Regulation 19 read with Schedule II, Part D of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has devised a policy on evaluating the performance of the Board of Directors, the Chairman, Committees, and Individual Directors. The evaluation process was carried out through a web-based portal. The summary of the evaluation reports

was presented to the respective Committees and the Board. The Directors had given positive feedback on the overall functioning of the Committees and the Board. The suggestions made by the Directors in the evaluation process have been suitably incorporated in the processes.

NUMBER OF MEETINGS OF THE BOARD

The Board met five times during the Financial Year 2022-23. The meeting details are provided in the Corporate Governance report that forms part of this Annual Report. The maximum interval between any two meetings did not exceed 120 days as prescribed in the Companies Act, 2013 and SEBI Listing Regulations.

COMMITTEES OF THE BOARD

As on March 31, 2023, the Board has constituted seven Committees, namely, Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk Management Committee, Corporate Social Responsibility Committee, Investment Committee and Securities Allotment Committee. The details of terms of reference of each Committee and the meetings held during the year are given in the Corporate Governance Report.

The Company has also formed Group Governance Council comprising of Board Members and Senior Management in terms of the SEBI Circular No. SEBI/ HO/CFD/CMD/CIR /P/2018/79 dated May 10, 2018, considering it has a large number of subsidiaries.

POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION

The Governance policies laid down by the Board of Directors of your Company include:

i. Policy on the appointment and removal of Directors, Key Managerial Personnel and Senior Management.

ii. Policy on remuneration to the Directors, Key Managerial Personnel and Senior Management and other Employees.

The extract of these two policies is provided in "Annexure III”.

The policies are available on the website of the Company and can be accessed at https://insights. techmahindra.com/investors/Governance-Policies-including-remuneration-to-Directors-KMPS.pdf

SUCCESSION PLAN

In accordance with the principles of transparency and consistency, your Company has adopted governance policies for appointments, remuneration and evaluation of its Board of Directors, Key Managerial Personnel & Senior Management. In line with these Governance policies, the Company has established a formal Succession Planning Program for Key Managerial Personnel across the organization. The Board evaluates all such plans at a regular interval and institutes a formal program for filling any such critical position. The Board evaluates both internal and external candidates for such positions along with the recommendations of the management. The Company also has a leadership development program where it identifies high potential managers, and trains them to take up the positions of higher responsibility. The Company has identified the second line of leadership, which provides stability to the business in case of contingencies.

KEY MANAGERIAL PERSONNEL (KMP)

Pursuant to provisions of Section 203 of the Companies Act, 2013, Mr. C. P. Gurnani, Managing Director & Chief Executive Officer, Mr. Milind Kulkarni, Chief Financial Officer (up to May 31, 2022), Mr. Rohit Anand, Chief Financial Officer (w.e.f. June 1, 2022) and Mr. Anil Khatri, Company Secretary & Compliance Officer were the Key Managerial Personnel of the Company during the year under review.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, your Directors, based on the representation(s) received from the Operating Management and after due enquiry, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and, reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for the year ended on that date;

iii. proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts have been prepared on a going concern basis;

v. they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

vi. the proper systems to ensure compliance with the provisions of all applicable laws are in place and are adequate and operating effectively.

DETAILS WITH RESPECT TO ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has internal financial controls which are adequate and were operating effectively. The controls are adequate for ensuring the orderly and efficient conduct of the business, including adherence to the Company’s policies, the safeguarding of assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records and timely preparation of reliable financial information.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / PROCEEDINGS

There are no significant and material orders passed by the regulators or courts or tribunal, impacting the going concern status and the Company’s operations in the future.

Further no application against the Company has been filed or is pending under the Insolvency and Bankruptcy Code, 2016, nor has the Company done any one-time settlement with any Bank or Financial institutions.

STATUTORY AUDITORS

The members, in the 35^th Annual General Meeting (AGM) held on July 26, 2022, appointed M/s. B S R & Co. LLP, Chartered Accountants, [ICAI Firm’s Registration No. 101248W/W- 100022] as the Statutory Auditors of the Company, to hold office for a further term of five consecutive years from the conclusion of the 35^th AGM of the Company held in

the Financial Year 2021-22 until the conclusion of the AGM of the Company for the Financial Year 2026-27 on such remuneration as may be determined by the Board of Directors.

There are no qualifications, reservations, adverse remarks or disclaimers made in the audit report for the Financial Year 2022-23.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies

(Appointment and Remuneration of Managerial

Personnel) Rules, 2014, the Company had appointed Makarand Lele & Co., Practicing Company

Secretary, Pune to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is available at "Annexure IV” to this report. There are no qualifications, reservations, adverse remarks or disclaimers made in the Secretarial Audit Report.

COMPLIANCE WITH SECRETARIAL

STANDARDS

The Company has complied with the applicable Secretarial Standards.

ANNUAL RETURN

Pursuant to the provisions of Section 92(3) read with Section 134(3) (a) of the Companies Act, 2013, the Annual Return in Form MGT-7 is available on the website of the Company and can be accessed at https://insights.techmahindra.com/investors/mgt-7.pdf

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

During the year, the Company has transferred the unclaimed dividends of '' 2,13,40,674 to the Investor Education and Protection Fund. Further, 2,26,700 corresponding shares on which dividends were unclaimed for seven consecutive years were transferred to the fund as per the requirements of the IEPF Rules. The Members are requested to check the details of the unpaid dividend on the website of the Company and claim their dividend to avoid the shares from being transferred to IEPF.

MANAGERIAL REMUNERATION

Disclosures of the ratio of the remuneration of each director to the median employee’s remuneration and other details as required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014 as amended from time to time, are provided as "Annexure V”. None of the Directors or the Managing Director & CEO of the Company received any remuneration or commission from Subsidiary Companies of your Company.

The details of remuneration paid to the Directors including the Managing Director & CEO of the Company are provided in the Corporate Governance Report.

PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Companies Act, 2013 ("the Act”) read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. However, pursuant to first proviso to Section 136(1) of the Act, this report is being sent to the Shareholders excluding the aforesaid information. Any shareholder interested in obtaining said information may write to the Company Secretary at the Registered Office / Corporate Office of the Company and the said information is open for inspection at the Registered Office of the Company.

POLICY ON PREVENTION OF SEXUAL HARASSMENT

Your Company has laid down the Prevention of Sexual Harassment (POSH) policy which is available on its website. The Company has zero tolerance on Sexual Harassment at workplace. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The status of complaints received under POSH and redressed by the POSH Committee of the Company, during the Financial Year under review, are given below:

a) Number of complaints received during the year - 74

b) Number of complaints redressed during the year - 73@

c) Number of complaints pending for redressal as on March 31, 2023 - 3

@ - Includes 2 complaints received during the previous year and redressed during the year.

There are focused campaigns on the POSH policy within the Company and awareness drives that

take place. Furthermore, employees are required to undertake a mandatory certification on POSH to sensitize themselves and strengthen their awareness.

EMPLOYEE STOCK OPTION SCHEMES

During the year under review, there were no material changes in the Employee Stock Option Schemes (ESOPs) of the Company and the Schemes are in compliance with the SEBI Regulations on ESOPs.

As per Regulation 14 of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, the details of the ESOPs are uploaded on the website of the Company and can be accessed at https://insights.techmahindra. com/investors/details-of-esops-fy-2022-23.pdf

CORPORATE GOVERNANCE

A report on Corporate Governance covering among others composition of the Board of Directors, details of meetings of the Board and Committees along with a certificate for compliance with the conditions of Corporate Governance in accordance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, issued by the Statutory Auditors of the Company, forms part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of your Company’s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)

SEBI, vide its circular dated May 10, 2021, made BRSR mandatory for the top 1,000 listed companies (by market capitalization) with effect from the FY 2022-23. The Company voluntarily published BRSR for the Financial year 2021-22. The BRSR Report for the year 2022-23 is enclosed as part of this Annual Report.

In addition to the BRSR, the Integrated Annual Report of the Company provides an insight on the various ESG initiatives adopted by the Company. The ESG disclosures have been independently assured by KPMG.

COST RECORDS

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities of the Company.

RISK MANAGEMENT

The Risk Management Committee of the Board of Directors devised a Risk Management Policy and guides the operating management to identify risks, analyze their probability and impact and prepare mitigation plans. It periodically reviews the Risk Management Framework & Enterprise Risk Register which is presented by the Chief Risk Officer. The Company identifies all potential risks viz. economic, business, currency, operations, climate, governance, finance, cyber, business continuity etc. and prepares a mitigation plan for each of the risks. The elements of risk as identified by the Company with the impact and mitigation strategy are set out in the Management Discussion and Analysis Report.

ESTABLISHMENT OF VIGIL MECHANISM

The Company has laid down Whistle Blower Policy covering Vigil Mechanism with protective clauses for the Whistle Blowers. The Whistle Blower Policy is made available on the website of the Company.

DEPOSITS / LOANS & ADVANCES, GUARANTEES OR INVESTMENTS

The Company has not accepted any deposits from the public during the year under review. The particulars of loans/advances, guarantees and investments under Section 186 of the Companies Act, 2013 are given in the notes forming part of the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All transactions entered with Related Parties as defined under Section 2(76) of the Companies Act, 2013 and Regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, ("The Listing Regulations”), during the financial year under review were in the ordinary course of business and at an arm’s length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no transactions with related parties in the Financial Year which conflicted with the interest of the Company and required compliance of the provisions of Regulation 23 of the Listing Regulations.

Suitable disclosure as required by the Indian Accounting Standards (Ind AS 24) has been made in the notes forming part of the Financial Statements.

The Company has formulated a policy on the Related Party Transactions and dealing with Related Party Transactions which has been uploaded on the website of the Company and can be accessed at https:// insights.techmahindra.com/investors/Related-Party-Transactions-Policy.pdf

The particulars of related party transactions in prescribed Form AOC - 2 are attached as ‘Annexure VI”. Pursuant to Regulation 23(9) of the Listing Regulations, your Company has filed half yearly report on Related Party Transactions with the stock exchanges.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are provided in "Annexure VII” which forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY

The CSR vision of the Company is "Empowerment through Education.”

In compliance with the guidelines prescribed under Section 135 of the Companies Act, 2013, your Company has constituted a Corporate Social Responsibility (CSR) Committee of the Board. The CSR policy, covering the Objectives, Focus Areas, Governance Structure Monitoring and Reporting Framework among others is approved by the Board of Directors. In accordance with the amendments made in Section 135 in January 2021, the CSR Policy has been duly revised and is available on the website of the Company and can be accessed at https://insights. techmahindra.com/investors/tml-csr-policy-23.pdf

The Company has spent more than 2% of the average net profits of the Company during the three immediately preceding Financial Years on CSR.

The Company’s social initiatives are mainly carried out by Tech Mahindra Foundation and Mahindra Educational Institutions, Section 8 (erstwhile Section 25) Companies promoted by the Company.

TECH MAHINDRA FOUNDATION (TMF) EDUCATION

The key initiatives taken by TMF in the arena of school education include:

ALL ROUND IMPROVEMENT IN SCHOOL EDUCATION (ARISE)

Tech Mahindra Foundation’s educational initiatives under ARISE are long-term school improvement programmes, in partnership with local governments and partner organisations. The Foundation in 2022-23 worked with 18 government primary & secondary schools to transform them into model schools of excellence. A total of 5,224 students were positively impacted under this programme, of which 2,832 were girls.

During the year, the Foundation expanded its work for children with special needs through its ARISE programme. This programme is a variant of ARISE in which children with special needs are provided chronic therapy as well as special education to help them lead more fulfilling lives. Through 32 projects, the programme enabled 4,829 children with special needs to become better learners with greater independence in managing their lives. The Foundation has taken up the provision of assistive technology for these children as an important value addition to its work in ARISE .

SHIKSHAANTAR

Shikshaantar, envisioned as a programme for enhancing the capacity of government school teachers, has emerged as an important programme in the education portfolio of the Foundation. TMF works with the Municipal Corporation of Delhi by running their In-Service Teacher Education Institutes. With the merger of the MCDs, TMF now has the responsibility of training teachers from close to 1,500 primary schools in Delhi. During the year under review, as many as 4,379 teachers were trained as part of Shikshaantar. This included specially designed modules for Digital Literacy, Child Safety, Cyber Security and Mental Health that were delivered to the teachers in a hybrid mode.

MOBILE SCIENCE LAB & ROBOTICS LAB

In order to increase the footprint of its work in Education and reach the unreached, TMF launched a unique initiative in 2019-20 - The Mobile Science Lab (MSL). For this, a Mahindra bus has been remodeled to become a science lab on wheels and has been travelling from school to school in East Delhi to provide STEM learning for children in grades 3 and 4 in these

schools. The MSL program benefitted as many as 6,861 students and 77 teachers throughout the year.

Following the success of the MSL program, TMF has also set up a Robotics Lab at one of its ARISE schools in Delhi which is an all-girls school. This lab was inaugurated in November 2022, and nearly 300 girls from this school are the potential beneficiaries.

EMPLOYABILITY

Skills-for-Market Training (SMART) is the Foundation’s flagship programme in employability. It is built on the vision of an educated, enabled and empowered India, and the belief that educated and skilled youth are the country’s true strength. The programme started with 3 Centres in 2012 and is currently running over 85 Centres at 10 locations across India. These include SMART Centres, SMART Centres (training for people with disabilities), and SMART-T Centres (training in technical trades).

In 2022-23, your Company trained 17,641 young women and men under its SMART program, of which, 1,303 were persons with disabilities. More than 70% of the graduates are placed in jobs across multiple industries upon successful completion of the training. The average salaries being earned by the graduates of the SMART program have been steadily rising and saw a 10% jump over the previous year.

The Foundation’s commitment to setting new benchmarks in skill development in India has been underscored by the setting up of Tech Mahindra SMART Academies, which provide the highest quality of skill training to youngsters in Healthcare and Digital Technologies. During FY 2022-23, 3,584 students were trained at the nine Academies that are now functional - 5 in Healthcare, 3 in Digital Technologies, and 1 in Logistics.

TMF’S OUTREACH INITIATIVES

In addition to all the core programs described above, Tech Mahindra Foundation is now also implementing several outreach projects in collaboration with various agencies. As part of these, the TMF team members are engaged in activities such as community health initiatives, teacher training, provision of content for other large-scale projects, etc. As part of such outreach projects, TMF supported 20,734 beneficiaries, taking the total tally of direct beneficiaries for the year to 61,995. This is nearly 50% more than the number of direct beneficiaries for FY 2021-22, which stood at 41,374.

MAHINDRA EDUCATIONAL INSTITUTIONS (MEI)

MEI - a not-for-profit, 100% subsidiary of the Company has set up Mahindra Ecole Centrale in August 2014 - through a collaborative venture between Mahindra Educational Institutions and Ecole Centrale of Paris, France (now known as Centrale Supelec) and the JNTU Hyderabad - to offer undergraduate engineering programs. Through this strong Indo-French Collaboration with Centrale Supelec and Industry connect with Tech Mahindra, MEC has emerged as a disruptive player in the field of Technical Education.

MEI has sponsored the setting up of Mahindra University to introduce diverse streams of education in addition to Engineering. Further the Engineering stream is being transitioned to Mahindra University.

MAHINDRA UNIVERSITY (MU)

Mahindra University ("MU”) (sponsored by Mahindra Educational Institutions, ("MEI”) - a not-for-profit, 100% subsidiary of Tech Mahindra), was notified on May 20, 2020 by the Government of Telangana vide The Telangana State Private Universities (Establishment and Regulation) Act, 2018 for "educating future citizens for and of a better world”.

The Ecole Centrale School of Engineering (ECSoE) currently runs various UG, PG and Ph.D. programs in cutting-edge engineering departments. ECSoE also launched a Centre for Life Sciences and offers courses in biotechnology and computational biology under it. The school plans to launch the 2.5 year integrated programs in Biotechnology & CSE for AY 2023-24.

Cornell University’s SC Johnson College of Business, an ivy league institution is the "Academic Partner” for School of Management. Mahindra University’s School of Management (MU - SoM) will benefit significantly from Cornell University’s expertise in curriculum development, faculty exchange programs including some specialty courses delivery by the Cornell faculty to Mahindra University students, as well as student immersion at Cornell. The School of Management currently conducts BBA, BA, E-MBA, and MBA (starting in 2023) programs.

The School of Law, Mahindra University, commenced operations in September 2021 in Hyderabad offering 5-year integrated programs in BA LL.B and BBA LL.B. It was founded on the philosophy of securing justice, equality, and service to all sections of society. With the needs of modern society evolving rapidly, there is a renewed focus on the importance of the discipline of

law. The School of Law will aim to make a difference to the legal profession and practice by providing a diverse, flexible curriculum and pedagogy, touching on several aspects of domestic and international law, while appraising the students of the latest trends in academia and practice. Starting 2022, the School of Law has launched a 3-year LLB (Hons) program and intend to launch a 6-year integrated B.Tech LLB course starting Academic Year 2023.

The University also plans to launch the following programs/schools for the Academic Year 2023-24:

1. School of Media

a. 4-year B.Tech. (Computation & Media)

b. 3-year BA (Digital Media & Communication)

2. School of Hotel Management

a. 3-year B.Sc. (Hospitality & Hotel Administration)

In the academic year 2022, a total of 2,971 students were studying under various programs across all schools and departments. The new admissions for academic year 2022 are 1,236 students of which 1,128 students are in various UG programs, including School of Management and School of Law, 22 students in the PG programs of School of Engineering and 86 students in the Ph.D programs across all the schools.

The Annual Report on CSR activities is provided as "Annexure VIII”.

SUSTAINABILITY

Your Company aligns closely with the Mahindra Group’s ambition to Rise: Be People positive, Planet positive, and Trust positive. The Company holistically embraces ever greater responsibility towards protecting the environment, empowering the society, and providing good governance.

Your Company’s strategy for creating long-term sustainable value is by improving, scaling, and transparently communicating our ecological, social, and economic impacts. Our strong governance framework led by the Board of Directors of your Company, who have oversight of the Company’s overall strategy and future direction and ensures the planning and implementation of environmental and social programs.

The Company’s holistic approach enables to drive sustainable impact in alignment with leading global frameworks, initiatives, and agendas committed to furthering sustainability such as the TCFD, SASB, GRI, as well as the Paris Agreement, the UNGC and the UN SDGs.

As a business, the Company recognizes the value of following the UN SDGs (Sustainable Development Goals) of People, Planet, Prosperity, and Partnership and continues to create value through initiatives that cater directly to these aspects of our performance.

People:

• Great place to work: Working to enhance our organizational culture by enabling our associates with access to advanced technologies, providing Learning & Development opportunities to help develop their skills and areas of expertise and providing them with robust career development programmes.

• Work-life balance: Providing feasible and flexible work-life balance and integration along with a range of associate-friendly policies and processes to reduce attrition.

• Diversity and inclusion: Ensuring that our organization continues to transcend into the realms of gender diversity and includes people with disabilities as well as people from the LGBTQIA community as part of being a socially responsible business.

• Employee engagement & recognition:

Ensuring our associates are engaged, feel valued, and recognized through a robust performance management system, a flexible system of working, and an extensive system of benefits and perquisites.

• Individual Social Responsibility: Encouraging associates to contribute to the society & environment and make these activities an integral part of their day-to-day activities.

Planet:

• Carbon neutrality and Net zero: Committing to carbon neutrality (2030) and Net zero (2035) by switching to renewable energy through on site installations and open access; improving energy efficiency through installation of LEDs, sensors; boosting green investments by

implementing Carbon Price; optimizing business travel by enabling virtual meetings; encouraging use of public transport and carpooling to reduce employee commute emissions; carbon sequestration through tree plantation; moving towards a low carbon economy by optimizing operations to ensure environmental protection.

• No waste to landfill: Installing Organic Waste Converters and vermicomposting plants at own campuses to convert food waste to manure, cutting down their transportation emissions and reducing waste to landfill.

• No to plastic: Maintaining plastic-free campuses and encouraging all stakeholders to use ecofriendly and biodegradable materials. Spreading awareness and initiating campaigns on preventing single-use plastic.

• Reduce, Reuse, Recycle, Recover: Implementing the process of Reduce, Reuse, Recycle and Recover across the value chain to limit waste and enable a circular economy.

• Being water positive: Improving water efficiency and increasing water savings by using water sensors, restrictors and water-efficient coolers, recycling wastewater through STPs, and recharging groundwater levels with Rainwater Harvesting Pits.

• Promoting Biodiversity: Protecting local flora and fauna across all our locations to ensure that we do not adversely impact biodiversity through our operations.

Prosperity:

• Innovation: Embracing technology and innovation by incorporating IoT, Blockchain, AI and Machine Learning to develop a portfolio of sustainable solutions that help reduce emissions and other negative impacts of climate change.

• Green solutions: Investing in Sustainability reporting solution (i.Sustain) and Climate Risk Management platforms, Smart grid, Microgrid-As-A-Service, Community Action Platform for Energy, Integrated Electric Vehicle Charging systems (IEVCS), Smart data hubs and Smart Cities for our Customers to reduce their carbon emissions.

• Connecting with customers: Embracing brand equity by connecting with our customers to address their current and future needs and ensuring customer satisfaction.

Partnership

• Learning and Sharing: Partnering with collaborators & partner companies to create an alliance ecosystem and supplement each other’s capabilities on joint projects. Collaborating with academia, businesses, NGOs, and governments to address some of the global challenges like health care, climate change, inequality, etc.

• Sustainable supply chain: Ensuring that we are in synch with our value chain in our commitment towards climate action and helping our suppliers follow the highest standards of sustainable and ethical best practices within their own organizations.

Tech Mahindra has drafted its Integrated Annual report in accordance with Global Reporting standards and frameworks with the data assured by a third party thus complying with the highest transparency standards.

The Company’s progress against the sustainability targets and metrics are disclosed in the externally assured Integrated reports available on the website of the company- https://www.techmahindra.com/en-in/ sustainability/

AWARDS AND RECOGNITION

Your Company continued its quest for excellence in its chosen area of business to emerge as a true global brand. Several awards and rankings continue to endorse your Company as a thought leader in the industry. A few of the prominent Awards / recognitions received by the Company during the Financial Year 2022-23 include:

• Tech Mahindra won several medals in the USA for its people practices- Brandon Hall HCM Excellence Awards, Stevie Awards for Great Employers and was also included in the 2023 Bloomberg Gender-Equality Index (GEI).

• Tech Mahindra Philippines was certified as a Great Place to Work.

• The Economic Times bestowed Tech Mahindra with several recognitions including Great Manager Awards (People Business), Human Capital Awards and ‘Best Organizations for Women’ (Femina).

• Tech Mahindra was also recognized by Avtar and Seramount as "Champions” in Most Inclusive Companies Index and "Top 10” in Best Companies for Women in India.

• Dun & Bradstreet India recognized Tech Mahindra as a top performer in the ESG Performance -Software and BPM sector.

• Tech Mahindra won Frost & Sullivan’s Technology Innovation Leadership Award 2022 for Metaverse Technology Services.

• Tech Mahindra was recognized among the Iconic brands at ET Iconic Brands 2022.

• TechM amplifAI0->^ is awarded "Cool Product or Service of the Year in Business 2022.” at the 12^th Annual 2022 Business Excellence Awards by Globee® Business Awards.

• Tech Mahindra MEA was recognized for Ground-breaking products/services in Ecommerce at GITEX.

• Tech Mahindra was awarded ‘A’ rating in MSCI ESG ratings 2022.

• Tech Mahindra received the "Mahatma Award 2022 for Social Good & Impact - Decent Work and Economic Growth” for its SMART Program.

These awards are a reflection of the Company’s continued efforts in the fields of business, sustainability, human resource management and its sustained progress towards creating a better society for all.

ACKNOWLEDGEMENTS

Your directors place on records their appreciation for the contributions made by employees towards the success of your Company. Your directors gratefully acknowledge the co-operation and support received from the shareholders, customers, vendors, bankers, Regulatory and Governmental authorities in India and abroad.

For and on behalf of the Board

Anand G. Mahindra Place: Mumbai Chairman

Date: 15^th June, 2023 (DIN: 00004695)

Note: The Board of Directors at its meeting held on April 27, 2023, had approved the financial statements for the financial year 2023 and the Director''s Report along with the Annexures. However, in view of the appointment of Mr. Mohit Joshi as Additional Director and Whole Time Director, the revised Director''s Report was approved by the Board at its Meeting held on June 15, 2023.

1

Interim Dividend (Special Dividend) for the Financial Year ended March 31, 2022 and Final Dividend for the Financial Year ended March 31, 2021

---

Mar 31, 2023

Your directors are pleased to present the Thirty Sixth Annual Report along with the audited accounts of your Company for the year ended March 31, 2023.

FINANCIAL RESULTS (STANDALONE)

('' in Million)
For the year ended March 31	2023	2022#
Income	437,856	372,079
Profit Before Interest, Depreciation and Tax	58,978	72,383
Interest	(1,808)	(689)
Depreciation	(8,129)	(7,403)
Profit Before Tax	49,041	64,291
Provision for Taxation	(11,266)	(14,058)
Profit After Tax	37,775	50,233
Other Comprehensive Income	(2,480)	1,200
Balance brought forward from previous year	216,090	203,329
Profit available for appropriation	253,917	253,292
Equity Dividends	(46,705)1	(43,624)1
Transfer to retained earnings on account of options lapsed	99	74
Transferred from Special Economic Zone re-investment reserve on utilization	7,151	6,348
Balance carried forward	214,462	216,090

# - Figures for the previous year are restated after considering the amalgamation of Tech Mahindra Business Services Limited and Born Commerce Private Limited with the Company.

¹ Interim Dividend (Special Dividend) for the Financial Year ended March 31, 2023 and Final Dividend for the Financial Year ended March 31,2022

DIVIDEND

The Board of Directors on November 1, 2022 approved a special interim dividend of '' 18/- per share (i.e. 360%) on the par value of '' 5/- each which was paid by the Company to the shareholders whose names appeared in the Register of Members as on November 10, 2022, being the record date for the payment of dividend. Your Directors are pleased to recommend a final dividend of '' 32/- per share on par value of '' 5/- (i.e. 640%), payable to those Shareholders whose names appear in the Register of Members as on the Book Closure Date. Thus, the total dividend for the FY 2022-23 will be '' 50/- per share (i.e. 1000%) against the dividend of '' 45/- per share (i.e. 900%) paid for the Financial Year 2021-22.

The Board of your Company decided not to transfer any amount to the General Reserve for the year under review.

Your Company has formulated a Dividend Policy which is disclosed on the website of the Company and can be accessed at https://insights.techmahindra.com/ investors/tml-dividend-distribution-policy.pdf

SHARE CAPITAL

During the year under review, your Company allotted 2,313,996 equity shares on the exercise of stock options under various Employee Stock Option Schemes. Consequently, the issued, subscribed and paid-up equity share capital has increased from '' 4,859.17 million divided into 971,833,479 equity shares of '' 5/- each to '' 4,870.74 million divided into 974,147,475 equity shares of '' 5/- each.

ALTERATION OF ‘CAPITAL CLAUSE’ OF MEMORANDUM OF ASSOCIATION

Consequent to the merger of Tech Mahindra Business Services Limited and Born Commerce Private Limited with the Company, the Authorised Capital of the

Company increased from '' 8,336.50 million divided into 1,667,300,000 equity shares of '' 5/- each to '' 9,093 million divided into 1,818,600,000 equity shares of '' 5/- each.

Accordingly, the Capital Clause of the Memorandum of Association of the Company was altered and substituted with the new Clause V to reflect the corresponding changes in the Authorised Share Capital.

BUSINESS PERFORMANCE / FINANCIAL OVERVIEW

Imperative for businesses and your Company to stay relevant is the need to be cognizant of the tectonic shifts occurring around the world. Technological innovations, climate change and the need for inclusive growth and representation among others is defining the way organization’s function. Tech Mahindra has remained on the forefront of all cutting-edge technological advancements and harnessed many emerging technologies to transform customer and employee experiences. Your Company’s execution strategy is indexed to the pillars of client focus, portfolio synergy, operational rigor, new age technology bets and people transformation.

During the Financial Year ended on March 31, 2023, the Company’s revenues grew to '' 532,902 million on a consolidated basis as against '' 446,460 million in the previous year - indicating a robust growth of 19.4%. The growth was broad based across geographies as both Americas and Europe contributed in line with overall business growth. The Company also saw healthy growth across business segments in Communications, Media and Entertainment (CME) and Enterprise verticals.

The EBITDA on a consolidated basis for the Financial Year 2023 was '' 80,288 million, similar to the previous year’s EBITDA of '' 80,200 million. The resultant EBITDA margins were in the range of 15.1% in FY 2023 compared to 18.1% in FY 2022. The post-tax profit of the Company was reduced to '' 48,313 million in FY 2023 as against '' 55,661 million in FY 2022.

The Company saw robust demand for digital transformation services with a focus on customer experience and cloud. The Company has seen new deal wins close to USD 3,000 million during the year, indicating a healthy growth momentum across all business verticals. Your Company’s investments in Enterprise SaaS and Hi-tech capabilities will help

it cater to increasing modernization demands from businesses in the Financial Year 2024 and beyond.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT

There have been no material changes and commitments which affect the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this report.

ACQUISITIONS

Your company made the following acquisition during the FY 2022-23.

THIRDWARE SOLUTIONS LIMITED

The Company acquired 100% of the share capital of Thirdware Solutions Limited ("Thirdware”) on June 3, 2022 at a consideration up to USD 42 million including earnouts. Thirdware is a global player in Enterprise Applications and will enhance the Company’s digital solutions and services in automotive consultant and design, development and implementation in areas like ERP (Enterprise Resource Planning), EPM (Enterprise Performance Management), RPA (Robotic Process Automation) and IloT (Industrial Internet of Things). These capabilities will give the Company an edge in the manufacturing space.

UPDATE ON MERGER

Your directors at their meeting held on January 31, 2021 approved the Scheme of Merger of Tech Mahindra Business Services Limited (TMBSL) and Born Commerce Private Limited (Born) with the Company with the appointed date as April 1, 2021.

Hon’ble NCLT, Mumbai bench and Hon’ble NCLT, Chennai bench vide their order dated January 5, 2023 and January 12, 2023 respectively, approved the scheme of merger by absorption of the TMBSL and Born with the Company and their respective shareholders and the said Scheme has become effective on February 16, 2023.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES OF THE COMPANY

The performance and financial position of the subsidiaries, associates, and joint venture companies included in the consolidated financial statement is provided in accordance with the provisions of Section

129 read with Rule 5 of the Companies (Accounts) Rules, 2014 containing the salient features of the financial statement of the Company’s subsidiaries/joint ventures or associate companies in Form AOC - 1 in “Annexure I” to this report.

Pursuant to Rule 8(5)(iv) of the Companies (Accounts) Rules, 2014, the names of the companies which have been incorporated or ceased to be the subsidiaries, joint ventures or associate companies during the year are provided in “Annexure II” to this report. The Company is actively pursuing the initiative on the consolidation of its subsidiaries/branches to optimize the operational costs. During the year under review, your Company has closed/merged twenty subsidiaries.

HUMAN RESOURCES

The employees of the Company are the most critical asset to your Company. The Company has taken several steps to protect, retain, and improve the competencies of these assets including:

Hiring: Forecast to Fulfilment

Your Company has streamlined its talent hiring process adopting some best-in-class practices. By building predictability in talent planning & forecasting for new age skills, your Company has been able to fuel business growth. Your Company has revamped its Buddy Referral programs to recruit talent from existing employee networks while offering attractive incentives. Embracing diversity in the hiring process has improved the global and local representation of talent within the organization. The Company has also redesigned its Candidate Engagement process to focus on creating positive experiences from the issuing joining offer letter to internal deployment to client projects. With rigor in talent allocation and proactive skilling of bench talent, your Company has been able to increase its internal fulfilment to 71% from 48% which is the best in the industry.

Learning: Skilling on the job

With the growth in digital business, your Company has been transforming its workforce both at speed and scale. The Company accelerated skilling initiatives to keep up with the pace of technological developments and built a ‘future-ready’ talent pool. #NAD Learn, the Al-based platform with interactive, on-demand, contextual and hyper-personalised up-skilling is helping the Company develop full-stack professionals. Your Company has supplemented this with young leadership development programs as well

as new policies to promote niche skilling and fast-track career growth. Employees can learn and grow as a Fresher through Elevate, in customer deployments through Project Skilling, for career progression through Future Skilling and into the leadership pipeline through journey-based programs. The Company also offers super-specialization skilling programs including Architect CoE, HiPOT programs at units and Program Manager CoE through EMBARK. Some new programs that the Company has recently launched for high-potential talent development include MALT and TrIBE.

Leadership: Integrative Thinking

The natural culture of empowerment that was supercharged during the pandemic continues to be the mainstay in the current hybrid work environment. Your Company aims to help employees imbibe mindsets & behaviors for the future which include a renewed focus on Integrative Thinking, Business & Financial Acumen, Bias for Action, Closure over Follow-up, Data over Emotions and Extreme Ownership. This was reinforced through the adoption of an industry leading learning platform - Harvard Manage Mentor Spark aimed at imparting best-in-class training at every level in realtime. Your Company has a robust Talent Management process for developing the leadership talent pipeline and has adopted consistent coaching practices for managers. Apart from Coaching, the employees have experienced new forms of learning with technology-enabled tools and pedagogies. For example, the ‘Wheel of Life’ is a customized self-coaching tool with gamified journeys, and personalized Habit Tracking making personal and professional well-being goals accessible to every employee.

Performance: Feedback focused

Your Company launched the Annual Performance Feedback cycle in December 2022. In order to build a culture where performance is enabled through feedback, Managers have been trained to have better performance review dialogues with their direct reports and work on an outcome-based evaluation rather than process or effort measurement. Your Company is creating a High-Performance Culture through hyper-personalized Incentive plans. Your Company has a suite of Incentive plans that are designed to create a strong alignment between Individual growth and Organization performance.

Wellness: Collective well-being

Your Company puts a happier, healthier and more productive workforce at the core of its business, policies and decisions. Your Company has designed

initiatives covering eight dimensions of wellness -Physical, Occupational, Emotional, Spiritual, Social, Environmental, Financial and Intellectual. The focus on preventative care with Corporate paid preventive health check, on-campus doctor consultations & counselling programs, helps employees diagnose any health condition in advance. To tackle IT industry specific issues, the Company organizes wellness sessions on Ergonomics, Healthy eating, Lifestyle management etc. Multiple tech-enabled wellness interventions like Kick the Butt (Smoking Cessation Program), Bend it like TechM (Guide to Ergonomics), Dump the Plump (Weight loss challenge) etc. have helped employees create healthier habits. Through the People Care program, managers are encouraged to show their human side and empower their team members to pursue collective well-being.

Communication: Building purpose

A robust communication process is at the heart of the Company’s vibrant culture. Employees are kept connected and informed through multiple media. Your Company’s 360-degree communication framework ensures employees have access to connect with leaders, peers and the external world. With publications, platforms, storytelling, campaigns, and connects, the organizational culture is shared with all. Your Company shares stories of diverse individuals achieving extraordinary things using structured formats like #RiseFromWithin. Leaders in the Company share not just business updates and success stories but personal anecdotes that reinforce the belief of a shared destiny.

Engagement: Hybrid connects

For an increasingly hybrid workplace, the Company has designed several virtual ‘water-cooler’ moments like All Hand Meets with CXO, Prime Time, Location Connects etc. along with family connects. Employees have platforms like MS Teams and Cisco WebEx for collaborative yet decentralized working. Your Company also organized on-ground engagement linked to TechM’s FIDE partnership for the Chess Olympiad. TechM CARES Action Planning workshops were also organized across different business units to implement changes based on employee feedback. Your Company also organized more than 1,200 engagement programs globally linked to Rise Refresh.

Rise Refresh: #TogetherWeRise

For more than a decade, the Rise philosophy has inspired employees from across the Mahindra Group to come to work and build something meaningful.

Since then, the world has changed with the rise of disruptive technologies, changing start-up ecosystem, climate change and recently, the pandemic. This is why, the Company has defined a new core purpose and brand pillars of Rise to simplify and sharpen its commitments. Your Company has leveraged every possible medium to ensure that this is communicated to all employees. From the conventional posters, communities, blogs, leader-bytes, microsite, quizzes and signatures route to the unconventional music, memes, WhatsApp stickers, GenZ lingo, podcast conversations and comic strips, Rise has touched the heart of every employee.

Diversity: Respecting Individuality

Your Company believes that respecting diversity and ensuring inclusion is fundamentally the right thing to do. It respects, embraces and celebrates the uniqueness of every individual. This also links back to the stated objective of the Company to be human-centered by encouraging associates to bring their most authentic selves to work. Your Company initiated the Maternity Assistance Program (MAP) to support employees who were on Maternity Leave in their transition back to work. The Company has also organized several Fireside chats featuring women with STEAM (Science, Technology, Engineering, Arts, Mathematics) roles to inspire others to grow in these fields. Through the ‘Restart’ Program, the Company aims to help Women IT Professionals restart their career after a break.

Recognition: Appreciation always

Your Company believes in appreciating, recognizing, and celebrating by building a culture where good work and behavior are appreciated. The Company has designed specialized recognition programs where rewards, tenure, performance, and contribution are celebrated, often with the loved ones of employees. The recognition program is centered around n = 1, that is, the individual at the heart of everything. A key part of personalizing recognition is to bring it to the desk of every employee. This is enabled by the KUDOS portal that offers recognition badges as well as redemption options for the points earned. Giving employees the ability to appreciate colleagues and sustained campaigns have led your Company to have an industry leading rewards penetration of ~74% including monetary and non-monetary recognition. Tenure is rewarded with personalized gifts for both the employee and their family members. Lastly, there are several organizational level awards for outstanding achievements like the ACE, STAR, Location Council and Spotlight awards.

HR Digitization: Experiencing technology

Your Company has revolutionized employee experience by deploying technology at different touchpoints of their lifecycle. Your Company continued its internal automation focus by using Robotic Process Automation for completing common workforce actions to reduce manual work. Your Company has also integrated HR Chatbot UVO and Technical Support Chatbot ATOM into MS Teams making it easier to perform workforce actions like leave applications, pending approvals, ticket registrations etc. Developing an "Attrition Prediction Model” has provided Your Company with an early warning system predicting the employees’ likelihood to quit, giving the Business HR team the ability to stage an intervention. The Company has also explored the use of Metaverse where three dimensional avatars interact in a virtual world to develop modules for hiring and on-boarding. Translating these experiences to mobile devices, the Company has developed ‘The Wheel of Life’ application as a self-coaching tool.

QUALITY

The Company continues its focus on quality and strives to exceed customer expectations at all times. During the year, it continued to strengthen the implementation of Quality systems and upgraded the processes/systems to comply with CMMI V 2.0 for both Development and Services and currently assessed for maturity level 5. Similarly it underwent various upgrade and re-certification audits for multiple standards during the year in order to meet client demands and enhance value delivery - successfully re-certified, ISO 9001:2015 (Quality Management System), ISO 20000-1:2018 (Information Technology Service Management System), ISO 27001:2013 (Information Security Management System), ISO 27701:2019 (Privacy Information Management System), TL9000 R 6.2/ R5.7 (Quality Management Systems for Tele Communications industry), ISO 13485:2016 (Quality Management Systems for medical devices - scope of certification limited to medical devices business within Tech Mahindra), AS9100 Rev D (Standard for Aerospace domain - scope of certification limited to the aerospace business within Tech Mahindra), ISO 17025:2017 - Laboratory Quality Management Systems for our device testing labs.

In addition to these, your Company also maintains its commitment to health, safety and environment by continually improving its processes in accordance with ISO 14001:2015 (Environmental Management System) and ISO 45001: 2018 (Occupational Health and Safety

Assessment Series) standards. Your Company is also certified on ISO 22301:2012 (Societal Security and Business Continuity Management System) and has a comprehensive Business Continuity and Disaster Recovery framework, to prevent potential business disruptions in the event of any disaster. It has processes that helped resume services to customer’s acceptable service levels. Automated Service Desk with SLAs for enabling business and Vulnerability Assessment and Penetration Testing Lab for secured corporate network operations are highlights that showcase the information security posture of the Organization.

Tech Mahindra (IT Division) has been assessed for the implementation of high maturity business excellence practices at Mahindra Group (Services Sector). It has been assessed at TMW Maturity Stage 7 (on scale of 1-10 stages) of Mahindra Business Excellence Framework - The Mahindra Way. These certifications are testimony of the robustness of business processes and at large, the quality culture imbibed in the organization.

Your Company has institutionalized the Deliverability Risk Assessment (DRA) practice - to assess the readiness and to identify risks at the beginning of the program, continued to strengthen the process for transforming Quality Assurance processes & delivery methods to adopt and strengthen Delivery excellence, Risk governance, and further enhance automation to enable quality delivery to the customer. Quality index which is a measure of quality of products and services delivery is institutionalized.

The Company is ensuring all these initiatives are in place, to ensure that it delivers as stated in its Quality Policy.

DIRECTORS

During the year under review, all Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Independent Directors have also given declaration of compliance with Rules 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014, with respect to their name appearing in the data bank of Independent Directors maintained by the Indian Institute of Corporate Affairs.

Pursuant to the provisions of Section 152(6)(c) of the Companies Act, 2013, Mr. Manoj Bhat, Director (DIN: 05205447) is liable to retire by rotation and being eligible offers himself for reappointment.

During the year under review, Ms. Penelope Fowler (DIN: 09591815) was appointed as Additional Director by the Board of Directors of the Company on May 13, 2022. She was further appointed as an Independent Director pursuant to the special resolution passed by the shareholders at the Annual General Meeting held on July 26, 2022 for a period of 5 years.

In view of the retirement of Mr. C. P Gurnani, Managing Director and CEO, the Board of Directors at its meeting held on June 15, 2023, based on the recommendation of the Nomination and Remuneration Committee approved the Appointment of Mr. Mohit Joshi, (DIN: 08339247) as Additional Director with effect from June 20, 2023 to hold office up to the date of ensuing Annual General Meeting. Further in order to ensure smooth transition into the role of Managing Director as Mr. C. P. Gurnani would retire on December 19, 2023, Mr. Mohit Joshi was also appointed as a Whole Time Director designated as Managing Director (Designate) and Key Managerial Personnel with effect from June 20, 2023 up to December 19, 2023 subject to the approval of the members of the Company and the Central Government.

The Board of Directors, based on the recommendation of Nomination and Remuneration Committee also approved the appointment of Mr. Mohit Joshi as Managing Director & Chief Executive Officer of the Company and Key Managerial Personnel under the Companies Act, 2013 from December 20, 2023 to June 19, 2028 (both days inclusive), subject to approval of the members of the Company and the Central Government.

The Board recommends the appointment of Mr. Manoj Bhat and Mr. Mohit Joshi to the Members at the ensuing Annual General Meeting. The brief profile of Mr. Manoj Bhat and Mr. Mohit Joshi is given in the Notice of the Annual General Meeting.

In terms of Regulation 24(1) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, Mr. T. N. Manoharan, Lead Independent Director of the Company has been appointed as Director on the Board of Tech Mahindra (Americas) Inc., a wholly

owned unlisted material subsidiary of the Company with effect from May 21, 2019.

In the opinion of the Board of Directors, the Independent Directors have relevant proficiency, expertise and experience.

FAMILIARISATION PROGRAMME

These programmes aim to provide insights into the Company to enable the Independent Directors to understand its business in depth and contribute significantly to the Company. The details of the program for familiarisation of the Independent Directors with the Company are available on its website and can be accessed at https://insights.techmahindra.com/ investors/tml-familarisation-progarmmes-for-IDs.pdf

The Board of Directors are regularly updated on changes in statutory provisions like amendments in Corporate Laws, SEBI Regulations, Taxation Laws and People related laws as applicable at the quarterly Board meetings. The Board members are also updated on the Risk universe applicable to the Company’s business. The MD & CEO of the Company had quarterly sessions with Board members sharing updates about the Company’s business strategy, operations and the key trends in the IT industry that are relevant to the Company. These updates help the Board members in keeping abreast of key changes and their impact on the Company. Further Subject Knowledge Experts from various fields are also invited to the meetings of the Board/Committees to appraise the Board Members of the latest developments in the IT and the business.

TRAINING

The Company has laid down a policy on the training of Independent Directors as part of its governance policies. The Senior Leadership of the Company periodically updates the Directors on regulatory changes, business strategy and operations.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Regulation 19 read with Schedule II, Part D of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has devised a policy on evaluating the performance of the Board of Directors, the Chairman, Committees, and Individual Directors. The evaluation process was carried out through a web-based portal. The summary of the evaluation reports

was presented to the respective Committees and the Board. The Directors had given positive feedback on the overall functioning of the Committees and the Board. The suggestions made by the Directors in the evaluation process have been suitably incorporated in the processes.

NUMBER OF MEETINGS OF THE BOARD

The Board met five times during the Financial Year 2022-23. The meeting details are provided in the Corporate Governance report that forms part of this Annual Report. The maximum interval between any two meetings did not exceed 120 days as prescribed in the Companies Act, 2013 and SEBI Listing Regulations.

COMMITTEES OF THE BOARD

As on March 31, 2023, the Board has constituted seven Committees, namely, Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk Management Committee, Corporate Social Responsibility Committee, Investment Committee and Securities Allotment Committee. The details of terms of reference of each Committee and the meetings held during the year are given in the Corporate Governance Report.

The Company has also formed Group Governance Council comprising of Board Members and Senior Management in terms of the SEBI Circular No. SEBI/ HO/CFD/CMD/CIR /P/2018/79 dated May 10, 2018, considering it has a large number of subsidiaries.

POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION

The Governance policies laid down by the Board of Directors of your Company include:

i. Policy on the appointment and removal of Directors, Key Managerial Personnel and Senior Management.

ii. Policy on remuneration to the Directors, Key Managerial Personnel and Senior Management and other Employees.

The extract of these two policies is provided in "Annexure III”.

The policies are available on the website of the Company and can be accessed at https://insights. techmahindra.com/investors/Governance-Policies-including-remuneration-to-Directors-KMPS.pdf

SUCCESSION PLAN

In accordance with the principles of transparency and consistency, your Company has adopted governance policies for appointments, remuneration and evaluation of its Board of Directors, Key Managerial Personnel & Senior Management. In line with these Governance policies, the Company has established a formal Succession Planning Program for Key Managerial Personnel across the organization. The Board evaluates all such plans at a regular interval and institutes a formal program for filling any such critical position. The Board evaluates both internal and external candidates for such positions along with the recommendations of the management. The Company also has a leadership development program where it identifies high potential managers, and trains them to take up the positions of higher responsibility. The Company has identified the second line of leadership, which provides stability to the business in case of contingencies.

KEY MANAGERIAL PERSONNEL (KMP)

Pursuant to provisions of Section 203 of the Companies Act, 2013, Mr. C. P. Gurnani, Managing Director & Chief Executive Officer, Mr. Milind Kulkarni, Chief Financial Officer (up to May 31, 2022), Mr. Rohit Anand, Chief Financial Officer (w.e.f. June 1, 2022) and Mr. Anil Khatri, Company Secretary & Compliance Officer were the Key Managerial Personnel of the Company during the year under review.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, your Directors, based on the representation(s) received from the Operating Management and after due enquiry, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and, reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for the year ended on that date;

iii. proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts have been prepared on a going concern basis;

v. they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

vi. the proper systems to ensure compliance with the provisions of all applicable laws are in place and are adequate and operating effectively.

DETAILS WITH RESPECT TO ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has internal financial controls which are adequate and were operating effectively. The controls are adequate for ensuring the orderly and efficient conduct of the business, including adherence to the Company’s policies, the safeguarding of assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records and timely preparation of reliable financial information.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / PROCEEDINGS

There are no significant and material orders passed by the regulators or courts or tribunal, impacting the going concern status and the Company’s operations in the future.

Further no application against the Company has been filed or is pending under the Insolvency and Bankruptcy Code, 2016, nor has the Company done any one-time settlement with any Bank or Financial institutions.

STATUTORY AUDITORS

The members, in the 35^th Annual General Meeting (AGM) held on July 26, 2022, appointed M/s. B S R & Co. LLP, Chartered Accountants, [ICAI Firm’s Registration No. 101248W/W- 100022] as the Statutory Auditors of the Company, to hold office for a further term of five consecutive years from the conclusion of the 35^th AGM of the Company held in

the Financial Year 2021-22 until the conclusion of the AGM of the Company for the Financial Year 2026-27 on such remuneration as may be determined by the Board of Directors.

There are no qualifications, reservations, adverse remarks or disclaimers made in the audit report for the Financial Year 2022-23.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies

(Appointment and Remuneration of Managerial

Personnel) Rules, 2014, the Company had appointed Makarand Lele & Co., Practicing Company

Secretary, Pune to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is available at "Annexure IV” to this report. There are no qualifications, reservations, adverse remarks or disclaimers made in the Secretarial Audit Report.

COMPLIANCE WITH SECRETARIAL

STANDARDS

The Company has complied with the applicable Secretarial Standards.

ANNUAL RETURN

Pursuant to the provisions of Section 92(3) read with Section 134(3) (a) of the Companies Act, 2013, the Annual Return in Form MGT-7 is available on the website of the Company and can be accessed at https://insights.techmahindra.com/investors/mgt-7.pdf

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

During the year, the Company has transferred the unclaimed dividends of '' 2,13,40,674 to the Investor Education and Protection Fund. Further, 2,26,700 corresponding shares on which dividends were unclaimed for seven consecutive years were transferred to the fund as per the requirements of the IEPF Rules. The Members are requested to check the details of the unpaid dividend on the website of the Company and claim their dividend to avoid the shares from being transferred to IEPF.

MANAGERIAL REMUNERATION

Disclosures of the ratio of the remuneration of each director to the median employee’s remuneration and other details as required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014 as amended from time to time, are provided as "Annexure V”. None of the Directors or the Managing Director & CEO of the Company received any remuneration or commission from Subsidiary Companies of your Company.

The details of remuneration paid to the Directors including the Managing Director & CEO of the Company are provided in the Corporate Governance Report.

PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Companies Act, 2013 ("the Act”) read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. However, pursuant to first proviso to Section 136(1) of the Act, this report is being sent to the Shareholders excluding the aforesaid information. Any shareholder interested in obtaining said information may write to the Company Secretary at the Registered Office / Corporate Office of the Company and the said information is open for inspection at the Registered Office of the Company.

POLICY ON PREVENTION OF SEXUAL HARASSMENT

Your Company has laid down the Prevention of Sexual Harassment (POSH) policy which is available on its website. The Company has zero tolerance on Sexual Harassment at workplace. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The status of complaints received under POSH and redressed by the POSH Committee of the Company, during the Financial Year under review, are given below:

a) Number of complaints received during the year - 74

b) Number of complaints redressed during the year - 73@

c) Number of complaints pending for redressal as on March 31, 2023 - 3

@ - Includes 2 complaints received during the previous year and redressed during the year.

There are focused campaigns on the POSH policy within the Company and awareness drives that

take place. Furthermore, employees are required to undertake a mandatory certification on POSH to sensitize themselves and strengthen their awareness.

EMPLOYEE STOCK OPTION SCHEMES

During the year under review, there were no material changes in the Employee Stock Option Schemes (ESOPs) of the Company and the Schemes are in compliance with the SEBI Regulations on ESOPs.

As per Regulation 14 of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, the details of the ESOPs are uploaded on the website of the Company and can be accessed at https://insights.techmahindra. com/investors/details-of-esops-fy-2022-23.pdf

CORPORATE GOVERNANCE

A report on Corporate Governance covering among others composition of the Board of Directors, details of meetings of the Board and Committees along with a certificate for compliance with the conditions of Corporate Governance in accordance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, issued by the Statutory Auditors of the Company, forms part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of your Company’s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)

SEBI, vide its circular dated May 10, 2021, made BRSR mandatory for the top 1,000 listed companies (by market capitalization) with effect from the FY 2022-23. The Company voluntarily published BRSR for the Financial year 2021-22. The BRSR Report for the year 2022-23 is enclosed as part of this Annual Report.

In addition to the BRSR, the Integrated Annual Report of the Company provides an insight on the various ESG initiatives adopted by the Company. The ESG disclosures have been independently assured by KPMG.

COST RECORDS

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities of the Company.

RISK MANAGEMENT

The Risk Management Committee of the Board of Directors devised a Risk Management Policy and guides the operating management to identify risks, analyze their probability and impact and prepare mitigation plans. It periodically reviews the Risk Management Framework & Enterprise Risk Register which is presented by the Chief Risk Officer. The Company identifies all potential risks viz. economic, business, currency, operations, climate, governance, finance, cyber, business continuity etc. and prepares a mitigation plan for each of the risks. The elements of risk as identified by the Company with the impact and mitigation strategy are set out in the Management Discussion and Analysis Report.

ESTABLISHMENT OF VIGIL MECHANISM

The Company has laid down Whistle Blower Policy covering Vigil Mechanism with protective clauses for the Whistle Blowers. The Whistle Blower Policy is made available on the website of the Company.

DEPOSITS / LOANS & ADVANCES, GUARANTEES OR INVESTMENTS

The Company has not accepted any deposits from the public during the year under review. The particulars of loans/advances, guarantees and investments under Section 186 of the Companies Act, 2013 are given in the notes forming part of the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All transactions entered with Related Parties as defined under Section 2(76) of the Companies Act, 2013 and Regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, ("The Listing Regulations”), during the financial year under review were in the ordinary course of business and at an arm’s length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no transactions with related parties in the Financial Year which conflicted with the interest of the Company and required compliance of the provisions of Regulation 23 of the Listing Regulations.

Suitable disclosure as required by the Indian Accounting Standards (Ind AS 24) has been made in the notes forming part of the Financial Statements.

The Company has formulated a policy on the Related Party Transactions and dealing with Related Party Transactions which has been uploaded on the website of the Company and can be accessed at https:// insights.techmahindra.com/investors/Related-Party-Transactions-Policy.pdf

The particulars of related party transactions in prescribed Form AOC - 2 are attached as ‘Annexure VI”. Pursuant to Regulation 23(9) of the Listing Regulations, your Company has filed half yearly report on Related Party Transactions with the stock exchanges.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are provided in "Annexure VII” which forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY

The CSR vision of the Company is "Empowerment through Education.”

In compliance with the guidelines prescribed under Section 135 of the Companies Act, 2013, your Company has constituted a Corporate Social Responsibility (CSR) Committee of the Board. The CSR policy, covering the Objectives, Focus Areas, Governance Structure Monitoring and Reporting Framework among others is approved by the Board of Directors. In accordance with the amendments made in Section 135 in January 2021, the CSR Policy has been duly revised and is available on the website of the Company and can be accessed at https://insights. techmahindra.com/investors/tml-csr-policy-23.pdf

The Company has spent more than 2% of the average net profits of the Company during the three immediately preceding Financial Years on CSR.

The Company’s social initiatives are mainly carried out by Tech Mahindra Foundation and Mahindra Educational Institutions, Section 8 (erstwhile Section 25) Companies promoted by the Company.

TECH MAHINDRA FOUNDATION (TMF) EDUCATION

The key initiatives taken by TMF in the arena of school education include:

ALL ROUND IMPROVEMENT IN SCHOOL EDUCATION (ARISE)

Tech Mahindra Foundation’s educational initiatives under ARISE are long-term school improvement programmes, in partnership with local governments and partner organisations. The Foundation in 2022-23 worked with 18 government primary & secondary schools to transform them into model schools of excellence. A total of 5,224 students were positively impacted under this programme, of which 2,832 were girls.

During the year, the Foundation expanded its work for children with special needs through its ARISE programme. This programme is a variant of ARISE in which children with special needs are provided chronic therapy as well as special education to help them lead more fulfilling lives. Through 32 projects, the programme enabled 4,829 children with special needs to become better learners with greater independence in managing their lives. The Foundation has taken up the provision of assistive technology for these children as an important value addition to its work in ARISE .

SHIKSHAANTAR

Shikshaantar, envisioned as a programme for enhancing the capacity of government school teachers, has emerged as an important programme in the education portfolio of the Foundation. TMF works with the Municipal Corporation of Delhi by running their In-Service Teacher Education Institutes. With the merger of the MCDs, TMF now has the responsibility of training teachers from close to 1,500 primary schools in Delhi. During the year under review, as many as 4,379 teachers were trained as part of Shikshaantar. This included specially designed modules for Digital Literacy, Child Safety, Cyber Security and Mental Health that were delivered to the teachers in a hybrid mode.

MOBILE SCIENCE LAB & ROBOTICS LAB

In order to increase the footprint of its work in Education and reach the unreached, TMF launched a unique initiative in 2019-20 - The Mobile Science Lab (MSL). For this, a Mahindra bus has been remodeled to become a science lab on wheels and has been travelling from school to school in East Delhi to provide STEM learning for children in grades 3 and 4 in these

schools. The MSL program benefitted as many as 6,861 students and 77 teachers throughout the year.

Following the success of the MSL program, TMF has also set up a Robotics Lab at one of its ARISE schools in Delhi which is an all-girls school. This lab was inaugurated in November 2022, and nearly 300 girls from this school are the potential beneficiaries.

EMPLOYABILITY

Skills-for-Market Training (SMART) is the Foundation’s flagship programme in employability. It is built on the vision of an educated, enabled and empowered India, and the belief that educated and skilled youth are the country’s true strength. The programme started with 3 Centres in 2012 and is currently running over 85 Centres at 10 locations across India. These include SMART Centres, SMART Centres (training for people with disabilities), and SMART-T Centres (training in technical trades).

In 2022-23, your Company trained 17,641 young women and men under its SMART program, of which, 1,303 were persons with disabilities. More than 70% of the graduates are placed in jobs across multiple industries upon successful completion of the training. The average salaries being earned by the graduates of the SMART program have been steadily rising and saw a 10% jump over the previous year.

The Foundation’s commitment to setting new benchmarks in skill development in India has been underscored by the setting up of Tech Mahindra SMART Academies, which provide the highest quality of skill training to youngsters in Healthcare and Digital Technologies. During FY 2022-23, 3,584 students were trained at the nine Academies that are now functional - 5 in Healthcare, 3 in Digital Technologies, and 1 in Logistics.

TMF’S OUTREACH INITIATIVES

In addition to all the core programs described above, Tech Mahindra Foundation is now also implementing several outreach projects in collaboration with various agencies. As part of these, the TMF team members are engaged in activities such as community health initiatives, teacher training, provision of content for other large-scale projects, etc. As part of such outreach projects, TMF supported 20,734 beneficiaries, taking the total tally of direct beneficiaries for the year to 61,995. This is nearly 50% more than the number of direct beneficiaries for FY 2021-22, which stood at 41,374.

MAHINDRA EDUCATIONAL INSTITUTIONS (MEI)

MEI - a not-for-profit, 100% subsidiary of the Company has set up Mahindra Ecole Centrale in August 2014 - through a collaborative venture between Mahindra Educational Institutions and Ecole Centrale of Paris, France (now known as Centrale Supelec) and the JNTU Hyderabad - to offer undergraduate engineering programs. Through this strong Indo-French Collaboration with Centrale Supelec and Industry connect with Tech Mahindra, MEC has emerged as a disruptive player in the field of Technical Education.

MEI has sponsored the setting up of Mahindra University to introduce diverse streams of education in addition to Engineering. Further the Engineering stream is being transitioned to Mahindra University.

MAHINDRA UNIVERSITY (MU)

Mahindra University ("MU”) (sponsored by Mahindra Educational Institutions, ("MEI”) - a not-for-profit, 100% subsidiary of Tech Mahindra), was notified on May 20, 2020 by the Government of Telangana vide The Telangana State Private Universities (Establishment and Regulation) Act, 2018 for "educating future citizens for and of a better world”.

The Ecole Centrale School of Engineering (ECSoE) currently runs various UG, PG and Ph.D. programs in cutting-edge engineering departments. ECSoE also launched a Centre for Life Sciences and offers courses in biotechnology and computational biology under it. The school plans to launch the 2.5 year integrated programs in Biotechnology & CSE for AY 2023-24.

Cornell University’s SC Johnson College of Business, an ivy league institution is the "Academic Partner” for School of Management. Mahindra University’s School of Management (MU - SoM) will benefit significantly from Cornell University’s expertise in curriculum development, faculty exchange programs including some specialty courses delivery by the Cornell faculty to Mahindra University students, as well as student immersion at Cornell. The School of Management currently conducts BBA, BA, E-MBA, and MBA (starting in 2023) programs.

The School of Law, Mahindra University, commenced operations in September 2021 in Hyderabad offering 5-year integrated programs in BA LL.B and BBA LL.B. It was founded on the philosophy of securing justice, equality, and service to all sections of society. With the needs of modern society evolving rapidly, there is a renewed focus on the importance of the discipline of

law. The School of Law will aim to make a difference to the legal profession and practice by providing a diverse, flexible curriculum and pedagogy, touching on several aspects of domestic and international law, while appraising the students of the latest trends in academia and practice. Starting 2022, the School of Law has launched a 3-year LLB (Hons) program and intend to launch a 6-year integrated B.Tech LLB course starting Academic Year 2023.

The University also plans to launch the following programs/schools for the Academic Year 2023-24:

1. School of Media

a. 4-year B.Tech. (Computation & Media)

b. 3-year BA (Digital Media & Communication)

2. School of Hotel Management

a. 3-year B.Sc. (Hospitality & Hotel Administration)

In the academic year 2022, a total of 2,971 students were studying under various programs across all schools and departments. The new admissions for academic year 2022 are 1,236 students of which 1,128 students are in various UG programs, including School of Management and School of Law, 22 students in the PG programs of School of Engineering and 86 students in the Ph.D programs across all the schools.

The Annual Report on CSR activities is provided as "Annexure VIII”.

SUSTAINABILITY

Your Company aligns closely with the Mahindra Group’s ambition to Rise: Be People positive, Planet positive, and Trust positive. The Company holistically embraces ever greater responsibility towards protecting the environment, empowering the society, and providing good governance.

Your Company’s strategy for creating long-term sustainable value is by improving, scaling, and transparently communicating our ecological, social, and economic impacts. Our strong governance framework led by the Board of Directors of your Company, who have oversight of the Company’s overall strategy and future direction and ensures the planning and implementation of environmental and social programs.

The Company’s holistic approach enables to drive sustainable impact in alignment with leading global frameworks, initiatives, and agendas committed to furthering sustainability such as the TCFD, SASB, GRI, as well as the Paris Agreement, the UNGC and the UN SDGs.

As a business, the Company recognizes the value of following the UN SDGs (Sustainable Development Goals) of People, Planet, Prosperity, and Partnership and continues to create value through initiatives that cater directly to these aspects of our performance.

People:

• Great place to work: Working to enhance our organizational culture by enabling our associates with access to advanced technologies, providing Learning & Development opportunities to help develop their skills and areas of expertise and providing them with robust career development programmes.

• Work-life balance: Providing feasible and flexible work-life balance and integration along with a range of associate-friendly policies and processes to reduce attrition.

• Diversity and inclusion: Ensuring that our organization continues to transcend into the realms of gender diversity and includes people with disabilities as well as people from the LGBTQIA community as part of being a socially responsible business.

• Employee engagement & recognition:

Ensuring our associates are engaged, feel valued, and recognized through a robust performance management system, a flexible system of working, and an extensive system of benefits and perquisites.

• Individual Social Responsibility: Encouraging associates to contribute to the society & environment and make these activities an integral part of their day-to-day activities.

Planet:

• Carbon neutrality and Net zero: Committing to carbon neutrality (2030) and Net zero (2035) by switching to renewable energy through on site installations and open access; improving energy efficiency through installation of LEDs, sensors; boosting green investments by

implementing Carbon Price; optimizing business travel by enabling virtual meetings; encouraging use of public transport and carpooling to reduce employee commute emissions; carbon sequestration through tree plantation; moving towards a low carbon economy by optimizing operations to ensure environmental protection.

• No waste to landfill: Installing Organic Waste Converters and vermicomposting plants at own campuses to convert food waste to manure, cutting down their transportation emissions and reducing waste to landfill.

• No to plastic: Maintaining plastic-free campuses and encouraging all stakeholders to use ecofriendly and biodegradable materials. Spreading awareness and initiating campaigns on preventing single-use plastic.

• Reduce, Reuse, Recycle, Recover: Implementing the process of Reduce, Reuse, Recycle and Recover across the value chain to limit waste and enable a circular economy.

• Being water positive: Improving water efficiency and increasing water savings by using water sensors, restrictors and water-efficient coolers, recycling wastewater through STPs, and recharging groundwater levels with Rainwater Harvesting Pits.

• Promoting Biodiversity: Protecting local flora and fauna across all our locations to ensure that we do not adversely impact biodiversity through our operations.

Prosperity:

• Innovation: Embracing technology and innovation by incorporating IoT, Blockchain, AI and Machine Learning to develop a portfolio of sustainable solutions that help reduce emissions and other negative impacts of climate change.

• Green solutions: Investing in Sustainability reporting solution (i.Sustain) and Climate Risk Management platforms, Smart grid, Microgrid-As-A-Service, Community Action Platform for Energy, Integrated Electric Vehicle Charging systems (IEVCS), Smart data hubs and Smart Cities for our Customers to reduce their carbon emissions.

• Connecting with customers: Embracing brand equity by connecting with our customers to address their current and future needs and ensuring customer satisfaction.

Partnership

• Learning and Sharing: Partnering with collaborators & partner companies to create an alliance ecosystem and supplement each other’s capabilities on joint projects. Collaborating with academia, businesses, NGOs, and governments to address some of the global challenges like health care, climate change, inequality, etc.

• Sustainable supply chain: Ensuring that we are in synch with our value chain in our commitment towards climate action and helping our suppliers follow the highest standards of sustainable and ethical best practices within their own organizations.

Tech Mahindra has drafted its Integrated Annual report in accordance with Global Reporting standards and frameworks with the data assured by a third party thus complying with the highest transparency standards.

The Company’s progress against the sustainability targets and metrics are disclosed in the externally assured Integrated reports available on the website of the company- https://www.techmahindra.com/en-in/ sustainability/

AWARDS AND RECOGNITION

Your Company continued its quest for excellence in its chosen area of business to emerge as a true global brand. Several awards and rankings continue to endorse your Company as a thought leader in the industry. A few of the prominent Awards / recognitions received by the Company during the Financial Year 2022-23 include:

• Tech Mahindra won several medals in the USA for its people practices- Brandon Hall HCM Excellence Awards, Stevie Awards for Great Employers and was also included in the 2023 Bloomberg Gender-Equality Index (GEI).

• Tech Mahindra Philippines was certified as a Great Place to Work.

• The Economic Times bestowed Tech Mahindra with several recognitions including Great Manager Awards (People Business), Human Capital Awards and ‘Best Organizations for Women’ (Femina).

• Tech Mahindra was also recognized by Avtar and Seramount as "Champions” in Most Inclusive Companies Index and "Top 10” in Best Companies for Women in India.

• Dun & Bradstreet India recognized Tech Mahindra as a top performer in the ESG Performance -Software and BPM sector.

• Tech Mahindra won Frost & Sullivan’s Technology Innovation Leadership Award 2022 for Metaverse Technology Services.

• Tech Mahindra was recognized among the Iconic brands at ET Iconic Brands 2022.

• TechM amplifAI0->^ is awarded "Cool Product or Service of the Year in Business 2022.” at the 12^th Annual 2022 Business Excellence Awards by Globee® Business Awards.

• Tech Mahindra MEA was recognized for Ground-breaking products/services in Ecommerce at GITEX.

• Tech Mahindra was awarded ‘A’ rating in MSCI ESG ratings 2022.

• Tech Mahindra received the "Mahatma Award 2022 for Social Good & Impact - Decent Work and Economic Growth” for its SMART Program.

These awards are a reflection of the Company’s continued efforts in the fields of business, sustainability, human resource management and its sustained progress towards creating a better society for all.

ACKNOWLEDGEMENTS

Your directors place on records their appreciation for the contributions made by employees towards the success of your Company. Your directors gratefully acknowledge the co-operation and support received from the shareholders, customers, vendors, bankers, Regulatory and Governmental authorities in India and abroad.

For and on behalf of the Board

Anand G. Mahindra Place: Mumbai Chairman

Date: 15^th June, 2023 (DIN: 00004695)

Note: The Board of Directors at its meeting held on April 27, 2023, had approved the financial statements for the financial year 2023 and the Director''s Report along with the Annexures. However, in view of the appointment of Mr. Mohit Joshi as Additional Director and Whole Time Director, the revised Director''s Report was approved by the Board at its Meeting held on June 15, 2023.

1

Interim Dividend (Special Dividend) for the Financial Year ended March 31, 2022 and Final Dividend for the Financial Year ended March 31, 2021

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Mar 31, 2023

Your directors are pleased to present the Thirty Sixth Annual Report along with the audited accounts of your Company for the year ended March 31, 2023.

FINANCIAL RESULTS (STANDALONE)

('' in Million)
For the year ended March 31	2023	2022#
Income	437,856	372,079
Profit Before Interest, Depreciation and Tax	58,978	72,383
Interest	(1,808)	(689)
Depreciation	(8,129)	(7,403)
Profit Before Tax	49,041	64,291
Provision for Taxation	(11,266)	(14,058)
Profit After Tax	37,775	50,233
Other Comprehensive Income	(2,480)	1,200
Balance brought forward from previous year	216,090	203,329
Profit available for appropriation	253,917	253,292
Equity Dividends	(46,705)1	(43,624)1
Transfer to retained earnings on account of options lapsed	99	74
Transferred from Special Economic Zone re-investment reserve on utilization	7,151	6,348
Balance carried forward	214,462	216,090

# - Figures for the previous year are restated after considering the amalgamation of Tech Mahindra Business Services Limited and Born Commerce Private Limited with the Company.

¹ Interim Dividend (Special Dividend) for the Financial Year ended March 31, 2023 and Final Dividend for the Financial Year ended March 31,2022

DIVIDEND

The Board of Directors on November 1, 2022 approved a special interim dividend of '' 18/- per share (i.e. 360%) on the par value of '' 5/- each which was paid by the Company to the shareholders whose names appeared in the Register of Members as on November 10, 2022, being the record date for the payment of dividend. Your Directors are pleased to recommend a final dividend of '' 32/- per share on par value of '' 5/- (i.e. 640%), payable to those Shareholders whose names appear in the Register of Members as on the Book Closure Date. Thus, the total dividend for the FY 2022-23 will be '' 50/- per share (i.e. 1000%) against the dividend of '' 45/- per share (i.e. 900%) paid for the Financial Year 2021-22.

The Board of your Company decided not to transfer any amount to the General Reserve for the year under review.

Your Company has formulated a Dividend Policy which is disclosed on the website of the Company and can be accessed at https://insights.techmahindra.com/ investors/tml-dividend-distribution-policy.pdf

SHARE CAPITAL

During the year under review, your Company allotted 2,313,996 equity shares on the exercise of stock options under various Employee Stock Option Schemes. Consequently, the issued, subscribed and paid-up equity share capital has increased from '' 4,859.17 million divided into 971,833,479 equity shares of '' 5/- each to '' 4,870.74 million divided into 974,147,475 equity shares of '' 5/- each.

ALTERATION OF ‘CAPITAL CLAUSE’ OF MEMORANDUM OF ASSOCIATION

Consequent to the merger of Tech Mahindra Business Services Limited and Born Commerce Private Limited with the Company, the Authorised Capital of the

Company increased from '' 8,336.50 million divided into 1,667,300,000 equity shares of '' 5/- each to '' 9,093 million divided into 1,818,600,000 equity shares of '' 5/- each.

Accordingly, the Capital Clause of the Memorandum of Association of the Company was altered and substituted with the new Clause V to reflect the corresponding changes in the Authorised Share Capital.

BUSINESS PERFORMANCE / FINANCIAL OVERVIEW

Imperative for businesses and your Company to stay relevant is the need to be cognizant of the tectonic shifts occurring around the world. Technological innovations, climate change and the need for inclusive growth and representation among others is defining the way organization’s function. Tech Mahindra has remained on the forefront of all cutting-edge technological advancements and harnessed many emerging technologies to transform customer and employee experiences. Your Company’s execution strategy is indexed to the pillars of client focus, portfolio synergy, operational rigor, new age technology bets and people transformation.

During the Financial Year ended on March 31, 2023, the Company’s revenues grew to '' 532,902 million on a consolidated basis as against '' 446,460 million in the previous year - indicating a robust growth of 19.4%. The growth was broad based across geographies as both Americas and Europe contributed in line with overall business growth. The Company also saw healthy growth across business segments in Communications, Media and Entertainment (CME) and Enterprise verticals.

The EBITDA on a consolidated basis for the Financial Year 2023 was '' 80,288 million, similar to the previous year’s EBITDA of '' 80,200 million. The resultant EBITDA margins were in the range of 15.1% in FY 2023 compared to 18.1% in FY 2022. The post-tax profit of the Company was reduced to '' 48,313 million in FY 2023 as against '' 55,661 million in FY 2022.

The Company saw robust demand for digital transformation services with a focus on customer experience and cloud. The Company has seen new deal wins close to USD 3,000 million during the year, indicating a healthy growth momentum across all business verticals. Your Company’s investments in Enterprise SaaS and Hi-tech capabilities will help

it cater to increasing modernization demands from businesses in the Financial Year 2024 and beyond.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT

There have been no material changes and commitments which affect the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this report.

ACQUISITIONS

Your company made the following acquisition during the FY 2022-23.

THIRDWARE SOLUTIONS LIMITED

The Company acquired 100% of the share capital of Thirdware Solutions Limited ("Thirdware”) on June 3, 2022 at a consideration up to USD 42 million including earnouts. Thirdware is a global player in Enterprise Applications and will enhance the Company’s digital solutions and services in automotive consultant and design, development and implementation in areas like ERP (Enterprise Resource Planning), EPM (Enterprise Performance Management), RPA (Robotic Process Automation) and IloT (Industrial Internet of Things). These capabilities will give the Company an edge in the manufacturing space.

UPDATE ON MERGER

Your directors at their meeting held on January 31, 2021 approved the Scheme of Merger of Tech Mahindra Business Services Limited (TMBSL) and Born Commerce Private Limited (Born) with the Company with the appointed date as April 1, 2021.

Hon’ble NCLT, Mumbai bench and Hon’ble NCLT, Chennai bench vide their order dated January 5, 2023 and January 12, 2023 respectively, approved the scheme of merger by absorption of the TMBSL and Born with the Company and their respective shareholders and the said Scheme has become effective on February 16, 2023.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES OF THE COMPANY

The performance and financial position of the subsidiaries, associates, and joint venture companies included in the consolidated financial statement is provided in accordance with the provisions of Section

129 read with Rule 5 of the Companies (Accounts) Rules, 2014 containing the salient features of the financial statement of the Company’s subsidiaries/joint ventures or associate companies in Form AOC - 1 in “Annexure I” to this report.

Pursuant to Rule 8(5)(iv) of the Companies (Accounts) Rules, 2014, the names of the companies which have been incorporated or ceased to be the subsidiaries, joint ventures or associate companies during the year are provided in “Annexure II” to this report. The Company is actively pursuing the initiative on the consolidation of its subsidiaries/branches to optimize the operational costs. During the year under review, your Company has closed/merged twenty subsidiaries.

HUMAN RESOURCES

The employees of the Company are the most critical asset to your Company. The Company has taken several steps to protect, retain, and improve the competencies of these assets including:

Hiring: Forecast to Fulfilment

Your Company has streamlined its talent hiring process adopting some best-in-class practices. By building predictability in talent planning & forecasting for new age skills, your Company has been able to fuel business growth. Your Company has revamped its Buddy Referral programs to recruit talent from existing employee networks while offering attractive incentives. Embracing diversity in the hiring process has improved the global and local representation of talent within the organization. The Company has also redesigned its Candidate Engagement process to focus on creating positive experiences from the issuing joining offer letter to internal deployment to client projects. With rigor in talent allocation and proactive skilling of bench talent, your Company has been able to increase its internal fulfilment to 71% from 48% which is the best in the industry.

Learning: Skilling on the job

With the growth in digital business, your Company has been transforming its workforce both at speed and scale. The Company accelerated skilling initiatives to keep up with the pace of technological developments and built a ‘future-ready’ talent pool. #NAD Learn, the Al-based platform with interactive, on-demand, contextual and hyper-personalised up-skilling is helping the Company develop full-stack professionals. Your Company has supplemented this with young leadership development programs as well

as new policies to promote niche skilling and fast-track career growth. Employees can learn and grow as a Fresher through Elevate, in customer deployments through Project Skilling, for career progression through Future Skilling and into the leadership pipeline through journey-based programs. The Company also offers super-specialization skilling programs including Architect CoE, HiPOT programs at units and Program Manager CoE through EMBARK. Some new programs that the Company has recently launched for high-potential talent development include MALT and TrIBE.

Leadership: Integrative Thinking

The natural culture of empowerment that was supercharged during the pandemic continues to be the mainstay in the current hybrid work environment. Your Company aims to help employees imbibe mindsets & behaviors for the future which include a renewed focus on Integrative Thinking, Business & Financial Acumen, Bias for Action, Closure over Follow-up, Data over Emotions and Extreme Ownership. This was reinforced through the adoption of an industry leading learning platform - Harvard Manage Mentor Spark aimed at imparting best-in-class training at every level in realtime. Your Company has a robust Talent Management process for developing the leadership talent pipeline and has adopted consistent coaching practices for managers. Apart from Coaching, the employees have experienced new forms of learning with technology-enabled tools and pedagogies. For example, the ‘Wheel of Life’ is a customized self-coaching tool with gamified journeys, and personalized Habit Tracking making personal and professional well-being goals accessible to every employee.

Performance: Feedback focused

Your Company launched the Annual Performance Feedback cycle in December 2022. In order to build a culture where performance is enabled through feedback, Managers have been trained to have better performance review dialogues with their direct reports and work on an outcome-based evaluation rather than process or effort measurement. Your Company is creating a High-Performance Culture through hyper-personalized Incentive plans. Your Company has a suite of Incentive plans that are designed to create a strong alignment between Individual growth and Organization performance.

Wellness: Collective well-being

Your Company puts a happier, healthier and more productive workforce at the core of its business, policies and decisions. Your Company has designed

initiatives covering eight dimensions of wellness -Physical, Occupational, Emotional, Spiritual, Social, Environmental, Financial and Intellectual. The focus on preventative care with Corporate paid preventive health check, on-campus doctor consultations & counselling programs, helps employees diagnose any health condition in advance. To tackle IT industry specific issues, the Company organizes wellness sessions on Ergonomics, Healthy eating, Lifestyle management etc. Multiple tech-enabled wellness interventions like Kick the Butt (Smoking Cessation Program), Bend it like TechM (Guide to Ergonomics), Dump the Plump (Weight loss challenge) etc. have helped employees create healthier habits. Through the People Care program, managers are encouraged to show their human side and empower their team members to pursue collective well-being.

Communication: Building purpose

A robust communication process is at the heart of the Company’s vibrant culture. Employees are kept connected and informed through multiple media. Your Company’s 360-degree communication framework ensures employees have access to connect with leaders, peers and the external world. With publications, platforms, storytelling, campaigns, and connects, the organizational culture is shared with all. Your Company shares stories of diverse individuals achieving extraordinary things using structured formats like #RiseFromWithin. Leaders in the Company share not just business updates and success stories but personal anecdotes that reinforce the belief of a shared destiny.

Engagement: Hybrid connects

For an increasingly hybrid workplace, the Company has designed several virtual ‘water-cooler’ moments like All Hand Meets with CXO, Prime Time, Location Connects etc. along with family connects. Employees have platforms like MS Teams and Cisco WebEx for collaborative yet decentralized working. Your Company also organized on-ground engagement linked to TechM’s FIDE partnership for the Chess Olympiad. TechM CARES Action Planning workshops were also organized across different business units to implement changes based on employee feedback. Your Company also organized more than 1,200 engagement programs globally linked to Rise Refresh.

Rise Refresh: #TogetherWeRise

For more than a decade, the Rise philosophy has inspired employees from across the Mahindra Group to come to work and build something meaningful.

Since then, the world has changed with the rise of disruptive technologies, changing start-up ecosystem, climate change and recently, the pandemic. This is why, the Company has defined a new core purpose and brand pillars of Rise to simplify and sharpen its commitments. Your Company has leveraged every possible medium to ensure that this is communicated to all employees. From the conventional posters, communities, blogs, leader-bytes, microsite, quizzes and signatures route to the unconventional music, memes, WhatsApp stickers, GenZ lingo, podcast conversations and comic strips, Rise has touched the heart of every employee.

Diversity: Respecting Individuality

Your Company believes that respecting diversity and ensuring inclusion is fundamentally the right thing to do. It respects, embraces and celebrates the uniqueness of every individual. This also links back to the stated objective of the Company to be human-centered by encouraging associates to bring their most authentic selves to work. Your Company initiated the Maternity Assistance Program (MAP) to support employees who were on Maternity Leave in their transition back to work. The Company has also organized several Fireside chats featuring women with STEAM (Science, Technology, Engineering, Arts, Mathematics) roles to inspire others to grow in these fields. Through the ‘Restart’ Program, the Company aims to help Women IT Professionals restart their career after a break.

Recognition: Appreciation always

Your Company believes in appreciating, recognizing, and celebrating by building a culture where good work and behavior are appreciated. The Company has designed specialized recognition programs where rewards, tenure, performance, and contribution are celebrated, often with the loved ones of employees. The recognition program is centered around n = 1, that is, the individual at the heart of everything. A key part of personalizing recognition is to bring it to the desk of every employee. This is enabled by the KUDOS portal that offers recognition badges as well as redemption options for the points earned. Giving employees the ability to appreciate colleagues and sustained campaigns have led your Company to have an industry leading rewards penetration of ~74% including monetary and non-monetary recognition. Tenure is rewarded with personalized gifts for both the employee and their family members. Lastly, there are several organizational level awards for outstanding achievements like the ACE, STAR, Location Council and Spotlight awards.

HR Digitization: Experiencing technology

Your Company has revolutionized employee experience by deploying technology at different touchpoints of their lifecycle. Your Company continued its internal automation focus by using Robotic Process Automation for completing common workforce actions to reduce manual work. Your Company has also integrated HR Chatbot UVO and Technical Support Chatbot ATOM into MS Teams making it easier to perform workforce actions like leave applications, pending approvals, ticket registrations etc. Developing an "Attrition Prediction Model” has provided Your Company with an early warning system predicting the employees’ likelihood to quit, giving the Business HR team the ability to stage an intervention. The Company has also explored the use of Metaverse where three dimensional avatars interact in a virtual world to develop modules for hiring and on-boarding. Translating these experiences to mobile devices, the Company has developed ‘The Wheel of Life’ application as a self-coaching tool.

QUALITY

The Company continues its focus on quality and strives to exceed customer expectations at all times. During the year, it continued to strengthen the implementation of Quality systems and upgraded the processes/systems to comply with CMMI V 2.0 for both Development and Services and currently assessed for maturity level 5. Similarly it underwent various upgrade and re-certification audits for multiple standards during the year in order to meet client demands and enhance value delivery - successfully re-certified, ISO 9001:2015 (Quality Management System), ISO 20000-1:2018 (Information Technology Service Management System), ISO 27001:2013 (Information Security Management System), ISO 27701:2019 (Privacy Information Management System), TL9000 R 6.2/ R5.7 (Quality Management Systems for Tele Communications industry), ISO 13485:2016 (Quality Management Systems for medical devices - scope of certification limited to medical devices business within Tech Mahindra), AS9100 Rev D (Standard for Aerospace domain - scope of certification limited to the aerospace business within Tech Mahindra), ISO 17025:2017 - Laboratory Quality Management Systems for our device testing labs.

In addition to these, your Company also maintains its commitment to health, safety and environment by continually improving its processes in accordance with ISO 14001:2015 (Environmental Management System) and ISO 45001: 2018 (Occupational Health and Safety

Assessment Series) standards. Your Company is also certified on ISO 22301:2012 (Societal Security and Business Continuity Management System) and has a comprehensive Business Continuity and Disaster Recovery framework, to prevent potential business disruptions in the event of any disaster. It has processes that helped resume services to customer’s acceptable service levels. Automated Service Desk with SLAs for enabling business and Vulnerability Assessment and Penetration Testing Lab for secured corporate network operations are highlights that showcase the information security posture of the Organization.

Tech Mahindra (IT Division) has been assessed for the implementation of high maturity business excellence practices at Mahindra Group (Services Sector). It has been assessed at TMW Maturity Stage 7 (on scale of 1-10 stages) of Mahindra Business Excellence Framework - The Mahindra Way. These certifications are testimony of the robustness of business processes and at large, the quality culture imbibed in the organization.

Your Company has institutionalized the Deliverability Risk Assessment (DRA) practice - to assess the readiness and to identify risks at the beginning of the program, continued to strengthen the process for transforming Quality Assurance processes & delivery methods to adopt and strengthen Delivery excellence, Risk governance, and further enhance automation to enable quality delivery to the customer. Quality index which is a measure of quality of products and services delivery is institutionalized.

The Company is ensuring all these initiatives are in place, to ensure that it delivers as stated in its Quality Policy.

DIRECTORS

During the year under review, all Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Independent Directors have also given declaration of compliance with Rules 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014, with respect to their name appearing in the data bank of Independent Directors maintained by the Indian Institute of Corporate Affairs.

Pursuant to the provisions of Section 152(6)(c) of the Companies Act, 2013, Mr. Manoj Bhat, Director (DIN: 05205447) is liable to retire by rotation and being eligible offers himself for reappointment.

During the year under review, Ms. Penelope Fowler (DIN: 09591815) was appointed as Additional Director by the Board of Directors of the Company on May 13, 2022. She was further appointed as an Independent Director pursuant to the special resolution passed by the shareholders at the Annual General Meeting held on July 26, 2022 for a period of 5 years.

In view of the retirement of Mr. C. P Gurnani, Managing Director and CEO, the Board of Directors at its meeting held on June 15, 2023, based on the recommendation of the Nomination and Remuneration Committee approved the Appointment of Mr. Mohit Joshi, (DIN: 08339247) as Additional Director with effect from June 20, 2023 to hold office up to the date of ensuing Annual General Meeting. Further in order to ensure smooth transition into the role of Managing Director as Mr. C. P. Gurnani would retire on December 19, 2023, Mr. Mohit Joshi was also appointed as a Whole Time Director designated as Managing Director (Designate) and Key Managerial Personnel with effect from June 20, 2023 up to December 19, 2023 subject to the approval of the members of the Company and the Central Government.

The Board of Directors, based on the recommendation of Nomination and Remuneration Committee also approved the appointment of Mr. Mohit Joshi as Managing Director & Chief Executive Officer of the Company and Key Managerial Personnel under the Companies Act, 2013 from December 20, 2023 to June 19, 2028 (both days inclusive), subject to approval of the members of the Company and the Central Government.

The Board recommends the appointment of Mr. Manoj Bhat and Mr. Mohit Joshi to the Members at the ensuing Annual General Meeting. The brief profile of Mr. Manoj Bhat and Mr. Mohit Joshi is given in the Notice of the Annual General Meeting.

In terms of Regulation 24(1) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, Mr. T. N. Manoharan, Lead Independent Director of the Company has been appointed as Director on the Board of Tech Mahindra (Americas) Inc., a wholly

owned unlisted material subsidiary of the Company with effect from May 21, 2019.

In the opinion of the Board of Directors, the Independent Directors have relevant proficiency, expertise and experience.

FAMILIARISATION PROGRAMME

These programmes aim to provide insights into the Company to enable the Independent Directors to understand its business in depth and contribute significantly to the Company. The details of the program for familiarisation of the Independent Directors with the Company are available on its website and can be accessed at https://insights.techmahindra.com/ investors/tml-familarisation-progarmmes-for-IDs.pdf

The Board of Directors are regularly updated on changes in statutory provisions like amendments in Corporate Laws, SEBI Regulations, Taxation Laws and People related laws as applicable at the quarterly Board meetings. The Board members are also updated on the Risk universe applicable to the Company’s business. The MD & CEO of the Company had quarterly sessions with Board members sharing updates about the Company’s business strategy, operations and the key trends in the IT industry that are relevant to the Company. These updates help the Board members in keeping abreast of key changes and their impact on the Company. Further Subject Knowledge Experts from various fields are also invited to the meetings of the Board/Committees to appraise the Board Members of the latest developments in the IT and the business.

TRAINING

The Company has laid down a policy on the training of Independent Directors as part of its governance policies. The Senior Leadership of the Company periodically updates the Directors on regulatory changes, business strategy and operations.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Regulation 19 read with Schedule II, Part D of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has devised a policy on evaluating the performance of the Board of Directors, the Chairman, Committees, and Individual Directors. The evaluation process was carried out through a web-based portal. The summary of the evaluation reports

was presented to the respective Committees and the Board. The Directors had given positive feedback on the overall functioning of the Committees and the Board. The suggestions made by the Directors in the evaluation process have been suitably incorporated in the processes.

NUMBER OF MEETINGS OF THE BOARD

The Board met five times during the Financial Year 2022-23. The meeting details are provided in the Corporate Governance report that forms part of this Annual Report. The maximum interval between any two meetings did not exceed 120 days as prescribed in the Companies Act, 2013 and SEBI Listing Regulations.

COMMITTEES OF THE BOARD

As on March 31, 2023, the Board has constituted seven Committees, namely, Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk Management Committee, Corporate Social Responsibility Committee, Investment Committee and Securities Allotment Committee. The details of terms of reference of each Committee and the meetings held during the year are given in the Corporate Governance Report.

The Company has also formed Group Governance Council comprising of Board Members and Senior Management in terms of the SEBI Circular No. SEBI/ HO/CFD/CMD/CIR /P/2018/79 dated May 10, 2018, considering it has a large number of subsidiaries.

POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION

The Governance policies laid down by the Board of Directors of your Company include:

i. Policy on the appointment and removal of Directors, Key Managerial Personnel and Senior Management.

ii. Policy on remuneration to the Directors, Key Managerial Personnel and Senior Management and other Employees.

The extract of these two policies is provided in "Annexure III”.

The policies are available on the website of the Company and can be accessed at https://insights. techmahindra.com/investors/Governance-Policies-including-remuneration-to-Directors-KMPS.pdf

SUCCESSION PLAN

In accordance with the principles of transparency and consistency, your Company has adopted governance policies for appointments, remuneration and evaluation of its Board of Directors, Key Managerial Personnel & Senior Management. In line with these Governance policies, the Company has established a formal Succession Planning Program for Key Managerial Personnel across the organization. The Board evaluates all such plans at a regular interval and institutes a formal program for filling any such critical position. The Board evaluates both internal and external candidates for such positions along with the recommendations of the management. The Company also has a leadership development program where it identifies high potential managers, and trains them to take up the positions of higher responsibility. The Company has identified the second line of leadership, which provides stability to the business in case of contingencies.

KEY MANAGERIAL PERSONNEL (KMP)

Pursuant to provisions of Section 203 of the Companies Act, 2013, Mr. C. P. Gurnani, Managing Director & Chief Executive Officer, Mr. Milind Kulkarni, Chief Financial Officer (up to May 31, 2022), Mr. Rohit Anand, Chief Financial Officer (w.e.f. June 1, 2022) and Mr. Anil Khatri, Company Secretary & Compliance Officer were the Key Managerial Personnel of the Company during the year under review.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, your Directors, based on the representation(s) received from the Operating Management and after due enquiry, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and, reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for the year ended on that date;

iii. proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts have been prepared on a going concern basis;

v. they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

vi. the proper systems to ensure compliance with the provisions of all applicable laws are in place and are adequate and operating effectively.

DETAILS WITH RESPECT TO ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has internal financial controls which are adequate and were operating effectively. The controls are adequate for ensuring the orderly and efficient conduct of the business, including adherence to the Company’s policies, the safeguarding of assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records and timely preparation of reliable financial information.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / PROCEEDINGS

There are no significant and material orders passed by the regulators or courts or tribunal, impacting the going concern status and the Company’s operations in the future.

Further no application against the Company has been filed or is pending under the Insolvency and Bankruptcy Code, 2016, nor has the Company done any one-time settlement with any Bank or Financial institutions.

STATUTORY AUDITORS

The members, in the 35^th Annual General Meeting (AGM) held on July 26, 2022, appointed M/s. B S R & Co. LLP, Chartered Accountants, [ICAI Firm’s Registration No. 101248W/W- 100022] as the Statutory Auditors of the Company, to hold office for a further term of five consecutive years from the conclusion of the 35^th AGM of the Company held in

the Financial Year 2021-22 until the conclusion of the AGM of the Company for the Financial Year 2026-27 on such remuneration as may be determined by the Board of Directors.

There are no qualifications, reservations, adverse remarks or disclaimers made in the audit report for the Financial Year 2022-23.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies

(Appointment and Remuneration of Managerial

Personnel) Rules, 2014, the Company had appointed Makarand Lele & Co., Practicing Company

Secretary, Pune to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is available at "Annexure IV” to this report. There are no qualifications, reservations, adverse remarks or disclaimers made in the Secretarial Audit Report.

COMPLIANCE WITH SECRETARIAL

STANDARDS

The Company has complied with the applicable Secretarial Standards.

ANNUAL RETURN

Pursuant to the provisions of Section 92(3) read with Section 134(3) (a) of the Companies Act, 2013, the Annual Return in Form MGT-7 is available on the website of the Company and can be accessed at https://insights.techmahindra.com/investors/mgt-7.pdf

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

During the year, the Company has transferred the unclaimed dividends of '' 2,13,40,674 to the Investor Education and Protection Fund. Further, 2,26,700 corresponding shares on which dividends were unclaimed for seven consecutive years were transferred to the fund as per the requirements of the IEPF Rules. The Members are requested to check the details of the unpaid dividend on the website of the Company and claim their dividend to avoid the shares from being transferred to IEPF.

MANAGERIAL REMUNERATION

Disclosures of the ratio of the remuneration of each director to the median employee’s remuneration and other details as required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014 as amended from time to time, are provided as "Annexure V”. None of the Directors or the Managing Director & CEO of the Company received any remuneration or commission from Subsidiary Companies of your Company.

The details of remuneration paid to the Directors including the Managing Director & CEO of the Company are provided in the Corporate Governance Report.

PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Companies Act, 2013 ("the Act”) read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. However, pursuant to first proviso to Section 136(1) of the Act, this report is being sent to the Shareholders excluding the aforesaid information. Any shareholder interested in obtaining said information may write to the Company Secretary at the Registered Office / Corporate Office of the Company and the said information is open for inspection at the Registered Office of the Company.

POLICY ON PREVENTION OF SEXUAL HARASSMENT

Your Company has laid down the Prevention of Sexual Harassment (POSH) policy which is available on its website. The Company has zero tolerance on Sexual Harassment at workplace. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The status of complaints received under POSH and redressed by the POSH Committee of the Company, during the Financial Year under review, are given below:

a) Number of complaints received during the year - 74

b) Number of complaints redressed during the year - 73@

c) Number of complaints pending for redressal as on March 31, 2023 - 3

@ - Includes 2 complaints received during the previous year and redressed during the year.

There are focused campaigns on the POSH policy within the Company and awareness drives that

take place. Furthermore, employees are required to undertake a mandatory certification on POSH to sensitize themselves and strengthen their awareness.

EMPLOYEE STOCK OPTION SCHEMES

During the year under review, there were no material changes in the Employee Stock Option Schemes (ESOPs) of the Company and the Schemes are in compliance with the SEBI Regulations on ESOPs.

As per Regulation 14 of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, the details of the ESOPs are uploaded on the website of the Company and can be accessed at https://insights.techmahindra. com/investors/details-of-esops-fy-2022-23.pdf

CORPORATE GOVERNANCE

A report on Corporate Governance covering among others composition of the Board of Directors, details of meetings of the Board and Committees along with a certificate for compliance with the conditions of Corporate Governance in accordance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, issued by the Statutory Auditors of the Company, forms part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of your Company’s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)

SEBI, vide its circular dated May 10, 2021, made BRSR mandatory for the top 1,000 listed companies (by market capitalization) with effect from the FY 2022-23. The Company voluntarily published BRSR for the Financial year 2021-22. The BRSR Report for the year 2022-23 is enclosed as part of this Annual Report.

In addition to the BRSR, the Integrated Annual Report of the Company provides an insight on the various ESG initiatives adopted by the Company. The ESG disclosures have been independently assured by KPMG.

COST RECORDS

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities of the Company.

RISK MANAGEMENT

The Risk Management Committee of the Board of Directors devised a Risk Management Policy and guides the operating management to identify risks, analyze their probability and impact and prepare mitigation plans. It periodically reviews the Risk Management Framework & Enterprise Risk Register which is presented by the Chief Risk Officer. The Company identifies all potential risks viz. economic, business, currency, operations, climate, governance, finance, cyber, business continuity etc. and prepares a mitigation plan for each of the risks. The elements of risk as identified by the Company with the impact and mitigation strategy are set out in the Management Discussion and Analysis Report.

ESTABLISHMENT OF VIGIL MECHANISM

The Company has laid down Whistle Blower Policy covering Vigil Mechanism with protective clauses for the Whistle Blowers. The Whistle Blower Policy is made available on the website of the Company.

DEPOSITS / LOANS & ADVANCES, GUARANTEES OR INVESTMENTS

The Company has not accepted any deposits from the public during the year under review. The particulars of loans/advances, guarantees and investments under Section 186 of the Companies Act, 2013 are given in the notes forming part of the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All transactions entered with Related Parties as defined under Section 2(76) of the Companies Act, 2013 and Regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, ("The Listing Regulations”), during the financial year under review were in the ordinary course of business and at an arm’s length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no transactions with related parties in the Financial Year which conflicted with the interest of the Company and required compliance of the provisions of Regulation 23 of the Listing Regulations.

Suitable disclosure as required by the Indian Accounting Standards (Ind AS 24) has been made in the notes forming part of the Financial Statements.

The Company has formulated a policy on the Related Party Transactions and dealing with Related Party Transactions which has been uploaded on the website of the Company and can be accessed at https:// insights.techmahindra.com/investors/Related-Party-Transactions-Policy.pdf

The particulars of related party transactions in prescribed Form AOC - 2 are attached as ‘Annexure VI”. Pursuant to Regulation 23(9) of the Listing Regulations, your Company has filed half yearly report on Related Party Transactions with the stock exchanges.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are provided in "Annexure VII” which forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY

The CSR vision of the Company is "Empowerment through Education.”

In compliance with the guidelines prescribed under Section 135 of the Companies Act, 2013, your Company has constituted a Corporate Social Responsibility (CSR) Committee of the Board. The CSR policy, covering the Objectives, Focus Areas, Governance Structure Monitoring and Reporting Framework among others is approved by the Board of Directors. In accordance with the amendments made in Section 135 in January 2021, the CSR Policy has been duly revised and is available on the website of the Company and can be accessed at https://insights. techmahindra.com/investors/tml-csr-policy-23.pdf

The Company has spent more than 2% of the average net profits of the Company during the three immediately preceding Financial Years on CSR.

The Company’s social initiatives are mainly carried out by Tech Mahindra Foundation and Mahindra Educational Institutions, Section 8 (erstwhile Section 25) Companies promoted by the Company.

TECH MAHINDRA FOUNDATION (TMF) EDUCATION

The key initiatives taken by TMF in the arena of school education include:

ALL ROUND IMPROVEMENT IN SCHOOL EDUCATION (ARISE)

Tech Mahindra Foundation’s educational initiatives under ARISE are long-term school improvement programmes, in partnership with local governments and partner organisations. The Foundation in 2022-23 worked with 18 government primary & secondary schools to transform them into model schools of excellence. A total of 5,224 students were positively impacted under this programme, of which 2,832 were girls.

During the year, the Foundation expanded its work for children with special needs through its ARISE programme. This programme is a variant of ARISE in which children with special needs are provided chronic therapy as well as special education to help them lead more fulfilling lives. Through 32 projects, the programme enabled 4,829 children with special needs to become better learners with greater independence in managing their lives. The Foundation has taken up the provision of assistive technology for these children as an important value addition to its work in ARISE .

SHIKSHAANTAR

Shikshaantar, envisioned as a programme for enhancing the capacity of government school teachers, has emerged as an important programme in the education portfolio of the Foundation. TMF works with the Municipal Corporation of Delhi by running their In-Service Teacher Education Institutes. With the merger of the MCDs, TMF now has the responsibility of training teachers from close to 1,500 primary schools in Delhi. During the year under review, as many as 4,379 teachers were trained as part of Shikshaantar. This included specially designed modules for Digital Literacy, Child Safety, Cyber Security and Mental Health that were delivered to the teachers in a hybrid mode.

MOBILE SCIENCE LAB & ROBOTICS LAB

In order to increase the footprint of its work in Education and reach the unreached, TMF launched a unique initiative in 2019-20 - The Mobile Science Lab (MSL). For this, a Mahindra bus has been remodeled to become a science lab on wheels and has been travelling from school to school in East Delhi to provide STEM learning for children in grades 3 and 4 in these

schools. The MSL program benefitted as many as 6,861 students and 77 teachers throughout the year.

Following the success of the MSL program, TMF has also set up a Robotics Lab at one of its ARISE schools in Delhi which is an all-girls school. This lab was inaugurated in November 2022, and nearly 300 girls from this school are the potential beneficiaries.

EMPLOYABILITY

Skills-for-Market Training (SMART) is the Foundation’s flagship programme in employability. It is built on the vision of an educated, enabled and empowered India, and the belief that educated and skilled youth are the country’s true strength. The programme started with 3 Centres in 2012 and is currently running over 85 Centres at 10 locations across India. These include SMART Centres, SMART Centres (training for people with disabilities), and SMART-T Centres (training in technical trades).

In 2022-23, your Company trained 17,641 young women and men under its SMART program, of which, 1,303 were persons with disabilities. More than 70% of the graduates are placed in jobs across multiple industries upon successful completion of the training. The average salaries being earned by the graduates of the SMART program have been steadily rising and saw a 10% jump over the previous year.

The Foundation’s commitment to setting new benchmarks in skill development in India has been underscored by the setting up of Tech Mahindra SMART Academies, which provide the highest quality of skill training to youngsters in Healthcare and Digital Technologies. During FY 2022-23, 3,584 students were trained at the nine Academies that are now functional - 5 in Healthcare, 3 in Digital Technologies, and 1 in Logistics.

TMF’S OUTREACH INITIATIVES

In addition to all the core programs described above, Tech Mahindra Foundation is now also implementing several outreach projects in collaboration with various agencies. As part of these, the TMF team members are engaged in activities such as community health initiatives, teacher training, provision of content for other large-scale projects, etc. As part of such outreach projects, TMF supported 20,734 beneficiaries, taking the total tally of direct beneficiaries for the year to 61,995. This is nearly 50% more than the number of direct beneficiaries for FY 2021-22, which stood at 41,374.

MAHINDRA EDUCATIONAL INSTITUTIONS (MEI)

MEI - a not-for-profit, 100% subsidiary of the Company has set up Mahindra Ecole Centrale in August 2014 - through a collaborative venture between Mahindra Educational Institutions and Ecole Centrale of Paris, France (now known as Centrale Supelec) and the JNTU Hyderabad - to offer undergraduate engineering programs. Through this strong Indo-French Collaboration with Centrale Supelec and Industry connect with Tech Mahindra, MEC has emerged as a disruptive player in the field of Technical Education.

MEI has sponsored the setting up of Mahindra University to introduce diverse streams of education in addition to Engineering. Further the Engineering stream is being transitioned to Mahindra University.

MAHINDRA UNIVERSITY (MU)

Mahindra University ("MU”) (sponsored by Mahindra Educational Institutions, ("MEI”) - a not-for-profit, 100% subsidiary of Tech Mahindra), was notified on May 20, 2020 by the Government of Telangana vide The Telangana State Private Universities (Establishment and Regulation) Act, 2018 for "educating future citizens for and of a better world”.

The Ecole Centrale School of Engineering (ECSoE) currently runs various UG, PG and Ph.D. programs in cutting-edge engineering departments. ECSoE also launched a Centre for Life Sciences and offers courses in biotechnology and computational biology under it. The school plans to launch the 2.5 year integrated programs in Biotechnology & CSE for AY 2023-24.

Cornell University’s SC Johnson College of Business, an ivy league institution is the "Academic Partner” for School of Management. Mahindra University’s School of Management (MU - SoM) will benefit significantly from Cornell University’s expertise in curriculum development, faculty exchange programs including some specialty courses delivery by the Cornell faculty to Mahindra University students, as well as student immersion at Cornell. The School of Management currently conducts BBA, BA, E-MBA, and MBA (starting in 2023) programs.

The School of Law, Mahindra University, commenced operations in September 2021 in Hyderabad offering 5-year integrated programs in BA LL.B and BBA LL.B. It was founded on the philosophy of securing justice, equality, and service to all sections of society. With the needs of modern society evolving rapidly, there is a renewed focus on the importance of the discipline of

law. The School of Law will aim to make a difference to the legal profession and practice by providing a diverse, flexible curriculum and pedagogy, touching on several aspects of domestic and international law, while appraising the students of the latest trends in academia and practice. Starting 2022, the School of Law has launched a 3-year LLB (Hons) program and intend to launch a 6-year integrated B.Tech LLB course starting Academic Year 2023.

The University also plans to launch the following programs/schools for the Academic Year 2023-24:

1. School of Media

a. 4-year B.Tech. (Computation & Media)

b. 3-year BA (Digital Media & Communication)

2. School of Hotel Management

a. 3-year B.Sc. (Hospitality & Hotel Administration)

In the academic year 2022, a total of 2,971 students were studying under various programs across all schools and departments. The new admissions for academic year 2022 are 1,236 students of which 1,128 students are in various UG programs, including School of Management and School of Law, 22 students in the PG programs of School of Engineering and 86 students in the Ph.D programs across all the schools.

The Annual Report on CSR activities is provided as "Annexure VIII”.

SUSTAINABILITY

Your Company aligns closely with the Mahindra Group’s ambition to Rise: Be People positive, Planet positive, and Trust positive. The Company holistically embraces ever greater responsibility towards protecting the environment, empowering the society, and providing good governance.

Your Company’s strategy for creating long-term sustainable value is by improving, scaling, and transparently communicating our ecological, social, and economic impacts. Our strong governance framework led by the Board of Directors of your Company, who have oversight of the Company’s overall strategy and future direction and ensures the planning and implementation of environmental and social programs.

The Company’s holistic approach enables to drive sustainable impact in alignment with leading global frameworks, initiatives, and agendas committed to furthering sustainability such as the TCFD, SASB, GRI, as well as the Paris Agreement, the UNGC and the UN SDGs.

As a business, the Company recognizes the value of following the UN SDGs (Sustainable Development Goals) of People, Planet, Prosperity, and Partnership and continues to create value through initiatives that cater directly to these aspects of our performance.

People:

• Great place to work: Working to enhance our organizational culture by enabling our associates with access to advanced technologies, providing Learning & Development opportunities to help develop their skills and areas of expertise and providing them with robust career development programmes.

• Work-life balance: Providing feasible and flexible work-life balance and integration along with a range of associate-friendly policies and processes to reduce attrition.

• Diversity and inclusion: Ensuring that our organization continues to transcend into the realms of gender diversity and includes people with disabilities as well as people from the LGBTQIA community as part of being a socially responsible business.

• Employee engagement & recognition:

Ensuring our associates are engaged, feel valued, and recognized through a robust performance management system, a flexible system of working, and an extensive system of benefits and perquisites.

• Individual Social Responsibility: Encouraging associates to contribute to the society & environment and make these activities an integral part of their day-to-day activities.

Planet:

• Carbon neutrality and Net zero: Committing to carbon neutrality (2030) and Net zero (2035) by switching to renewable energy through on site installations and open access; improving energy efficiency through installation of LEDs, sensors; boosting green investments by

implementing Carbon Price; optimizing business travel by enabling virtual meetings; encouraging use of public transport and carpooling to reduce employee commute emissions; carbon sequestration through tree plantation; moving towards a low carbon economy by optimizing operations to ensure environmental protection.

• No waste to landfill: Installing Organic Waste Converters and vermicomposting plants at own campuses to convert food waste to manure, cutting down their transportation emissions and reducing waste to landfill.

• No to plastic: Maintaining plastic-free campuses and encouraging all stakeholders to use ecofriendly and biodegradable materials. Spreading awareness and initiating campaigns on preventing single-use plastic.

• Reduce, Reuse, Recycle, Recover: Implementing the process of Reduce, Reuse, Recycle and Recover across the value chain to limit waste and enable a circular economy.

• Being water positive: Improving water efficiency and increasing water savings by using water sensors, restrictors and water-efficient coolers, recycling wastewater through STPs, and recharging groundwater levels with Rainwater Harvesting Pits.

• Promoting Biodiversity: Protecting local flora and fauna across all our locations to ensure that we do not adversely impact biodiversity through our operations.

Prosperity:

• Innovation: Embracing technology and innovation by incorporating IoT, Blockchain, AI and Machine Learning to develop a portfolio of sustainable solutions that help reduce emissions and other negative impacts of climate change.

• Green solutions: Investing in Sustainability reporting solution (i.Sustain) and Climate Risk Management platforms, Smart grid, Microgrid-As-A-Service, Community Action Platform for Energy, Integrated Electric Vehicle Charging systems (IEVCS), Smart data hubs and Smart Cities for our Customers to reduce their carbon emissions.

• Connecting with customers: Embracing brand equity by connecting with our customers to address their current and future needs and ensuring customer satisfaction.

Partnership

• Learning and Sharing: Partnering with collaborators & partner companies to create an alliance ecosystem and supplement each other’s capabilities on joint projects. Collaborating with academia, businesses, NGOs, and governments to address some of the global challenges like health care, climate change, inequality, etc.

• Sustainable supply chain: Ensuring that we are in synch with our value chain in our commitment towards climate action and helping our suppliers follow the highest standards of sustainable and ethical best practices within their own organizations.

Tech Mahindra has drafted its Integrated Annual report in accordance with Global Reporting standards and frameworks with the data assured by a third party thus complying with the highest transparency standards.

The Company’s progress against the sustainability targets and metrics are disclosed in the externally assured Integrated reports available on the website of the company- https://www.techmahindra.com/en-in/ sustainability/

AWARDS AND RECOGNITION

Your Company continued its quest for excellence in its chosen area of business to emerge as a true global brand. Several awards and rankings continue to endorse your Company as a thought leader in the industry. A few of the prominent Awards / recognitions received by the Company during the Financial Year 2022-23 include:

• Tech Mahindra won several medals in the USA for its people practices- Brandon Hall HCM Excellence Awards, Stevie Awards for Great Employers and was also included in the 2023 Bloomberg Gender-Equality Index (GEI).

• Tech Mahindra Philippines was certified as a Great Place to Work.

• The Economic Times bestowed Tech Mahindra with several recognitions including Great Manager Awards (People Business), Human Capital Awards and ‘Best Organizations for Women’ (Femina).

• Tech Mahindra was also recognized by Avtar and Seramount as "Champions” in Most Inclusive Companies Index and "Top 10” in Best Companies for Women in India.

• Dun & Bradstreet India recognized Tech Mahindra as a top performer in the ESG Performance -Software and BPM sector.

• Tech Mahindra won Frost & Sullivan’s Technology Innovation Leadership Award 2022 for Metaverse Technology Services.

• Tech Mahindra was recognized among the Iconic brands at ET Iconic Brands 2022.

• TechM amplifAI0->^ is awarded "Cool Product or Service of the Year in Business 2022.” at the 12^th Annual 2022 Business Excellence Awards by Globee® Business Awards.

• Tech Mahindra MEA was recognized for Ground-breaking products/services in Ecommerce at GITEX.

• Tech Mahindra was awarded ‘A’ rating in MSCI ESG ratings 2022.

• Tech Mahindra received the "Mahatma Award 2022 for Social Good & Impact - Decent Work and Economic Growth” for its SMART Program.

These awards are a reflection of the Company’s continued efforts in the fields of business, sustainability, human resource management and its sustained progress towards creating a better society for all.

ACKNOWLEDGEMENTS

Your directors place on records their appreciation for the contributions made by employees towards the success of your Company. Your directors gratefully acknowledge the co-operation and support received from the shareholders, customers, vendors, bankers, Regulatory and Governmental authorities in India and abroad.

For and on behalf of the Board

Anand G. Mahindra Place: Mumbai Chairman

Date: 15^th June, 2023 (DIN: 00004695)

Note: The Board of Directors at its meeting held on April 27, 2023, had approved the financial statements for the financial year 2023 and the Director''s Report along with the Annexures. However, in view of the appointment of Mr. Mohit Joshi as Additional Director and Whole Time Director, the revised Director''s Report was approved by the Board at its Meeting held on June 15, 2023.

1

Interim Dividend (Special Dividend) for the Financial Year ended March 31, 2022 and Final Dividend for the Financial Year ended March 31, 2021

---

Mar 31, 2023

Your directors are pleased to present the Thirty Sixth Annual Report along with the audited accounts of your Company for the year ended March 31, 2023.

FINANCIAL RESULTS (STANDALONE)

('' in Million)
For the year ended March 31	2023	2022#
Income	437,856	372,079
Profit Before Interest, Depreciation and Tax	58,978	72,383
Interest	(1,808)	(689)
Depreciation	(8,129)	(7,403)
Profit Before Tax	49,041	64,291
Provision for Taxation	(11,266)	(14,058)
Profit After Tax	37,775	50,233
Other Comprehensive Income	(2,480)	1,200
Balance brought forward from previous year	216,090	203,329
Profit available for appropriation	253,917	253,292
Equity Dividends	(46,705)1	(43,624)1
Transfer to retained earnings on account of options lapsed	99	74
Transferred from Special Economic Zone re-investment reserve on utilization	7,151	6,348
Balance carried forward	214,462	216,090

# - Figures for the previous year are restated after considering the amalgamation of Tech Mahindra Business Services Limited and Born Commerce Private Limited with the Company.

¹ Interim Dividend (Special Dividend) for the Financial Year ended March 31, 2023 and Final Dividend for the Financial Year ended March 31,2022

DIVIDEND

The Board of Directors on November 1, 2022 approved a special interim dividend of '' 18/- per share (i.e. 360%) on the par value of '' 5/- each which was paid by the Company to the shareholders whose names appeared in the Register of Members as on November 10, 2022, being the record date for the payment of dividend. Your Directors are pleased to recommend a final dividend of '' 32/- per share on par value of '' 5/- (i.e. 640%), payable to those Shareholders whose names appear in the Register of Members as on the Book Closure Date. Thus, the total dividend for the FY 2022-23 will be '' 50/- per share (i.e. 1000%) against the dividend of '' 45/- per share (i.e. 900%) paid for the Financial Year 2021-22.

The Board of your Company decided not to transfer any amount to the General Reserve for the year under review.

Your Company has formulated a Dividend Policy which is disclosed on the website of the Company and can be accessed at https://insights.techmahindra.com/ investors/tml-dividend-distribution-policy.pdf

SHARE CAPITAL

During the year under review, your Company allotted 2,313,996 equity shares on the exercise of stock options under various Employee Stock Option Schemes. Consequently, the issued, subscribed and paid-up equity share capital has increased from '' 4,859.17 million divided into 971,833,479 equity shares of '' 5/- each to '' 4,870.74 million divided into 974,147,475 equity shares of '' 5/- each.

ALTERATION OF ‘CAPITAL CLAUSE’ OF MEMORANDUM OF ASSOCIATION

Consequent to the merger of Tech Mahindra Business Services Limited and Born Commerce Private Limited with the Company, the Authorised Capital of the

Company increased from '' 8,336.50 million divided into 1,667,300,000 equity shares of '' 5/- each to '' 9,093 million divided into 1,818,600,000 equity shares of '' 5/- each.

Accordingly, the Capital Clause of the Memorandum of Association of the Company was altered and substituted with the new Clause V to reflect the corresponding changes in the Authorised Share Capital.

BUSINESS PERFORMANCE / FINANCIAL OVERVIEW

Imperative for businesses and your Company to stay relevant is the need to be cognizant of the tectonic shifts occurring around the world. Technological innovations, climate change and the need for inclusive growth and representation among others is defining the way organization’s function. Tech Mahindra has remained on the forefront of all cutting-edge technological advancements and harnessed many emerging technologies to transform customer and employee experiences. Your Company’s execution strategy is indexed to the pillars of client focus, portfolio synergy, operational rigor, new age technology bets and people transformation.

During the Financial Year ended on March 31, 2023, the Company’s revenues grew to '' 532,902 million on a consolidated basis as against '' 446,460 million in the previous year - indicating a robust growth of 19.4%. The growth was broad based across geographies as both Americas and Europe contributed in line with overall business growth. The Company also saw healthy growth across business segments in Communications, Media and Entertainment (CME) and Enterprise verticals.

The EBITDA on a consolidated basis for the Financial Year 2023 was '' 80,288 million, similar to the previous year’s EBITDA of '' 80,200 million. The resultant EBITDA margins were in the range of 15.1% in FY 2023 compared to 18.1% in FY 2022. The post-tax profit of the Company was reduced to '' 48,313 million in FY 2023 as against '' 55,661 million in FY 2022.

The Company saw robust demand for digital transformation services with a focus on customer experience and cloud. The Company has seen new deal wins close to USD 3,000 million during the year, indicating a healthy growth momentum across all business verticals. Your Company’s investments in Enterprise SaaS and Hi-tech capabilities will help

it cater to increasing modernization demands from businesses in the Financial Year 2024 and beyond.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT

There have been no material changes and commitments which affect the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this report.

ACQUISITIONS

Your company made the following acquisition during the FY 2022-23.

THIRDWARE SOLUTIONS LIMITED

The Company acquired 100% of the share capital of Thirdware Solutions Limited ("Thirdware”) on June 3, 2022 at a consideration up to USD 42 million including earnouts. Thirdware is a global player in Enterprise Applications and will enhance the Company’s digital solutions and services in automotive consultant and design, development and implementation in areas like ERP (Enterprise Resource Planning), EPM (Enterprise Performance Management), RPA (Robotic Process Automation) and IloT (Industrial Internet of Things). These capabilities will give the Company an edge in the manufacturing space.

UPDATE ON MERGER

Your directors at their meeting held on January 31, 2021 approved the Scheme of Merger of Tech Mahindra Business Services Limited (TMBSL) and Born Commerce Private Limited (Born) with the Company with the appointed date as April 1, 2021.

Hon’ble NCLT, Mumbai bench and Hon’ble NCLT, Chennai bench vide their order dated January 5, 2023 and January 12, 2023 respectively, approved the scheme of merger by absorption of the TMBSL and Born with the Company and their respective shareholders and the said Scheme has become effective on February 16, 2023.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES OF THE COMPANY

The performance and financial position of the subsidiaries, associates, and joint venture companies included in the consolidated financial statement is provided in accordance with the provisions of Section

129 read with Rule 5 of the Companies (Accounts) Rules, 2014 containing the salient features of the financial statement of the Company’s subsidiaries/joint ventures or associate companies in Form AOC - 1 in “Annexure I” to this report.

Pursuant to Rule 8(5)(iv) of the Companies (Accounts) Rules, 2014, the names of the companies which have been incorporated or ceased to be the subsidiaries, joint ventures or associate companies during the year are provided in “Annexure II” to this report. The Company is actively pursuing the initiative on the consolidation of its subsidiaries/branches to optimize the operational costs. During the year under review, your Company has closed/merged twenty subsidiaries.

HUMAN RESOURCES

The employees of the Company are the most critical asset to your Company. The Company has taken several steps to protect, retain, and improve the competencies of these assets including:

Hiring: Forecast to Fulfilment

Your Company has streamlined its talent hiring process adopting some best-in-class practices. By building predictability in talent planning & forecasting for new age skills, your Company has been able to fuel business growth. Your Company has revamped its Buddy Referral programs to recruit talent from existing employee networks while offering attractive incentives. Embracing diversity in the hiring process has improved the global and local representation of talent within the organization. The Company has also redesigned its Candidate Engagement process to focus on creating positive experiences from the issuing joining offer letter to internal deployment to client projects. With rigor in talent allocation and proactive skilling of bench talent, your Company has been able to increase its internal fulfilment to 71% from 48% which is the best in the industry.

Learning: Skilling on the job

With the growth in digital business, your Company has been transforming its workforce both at speed and scale. The Company accelerated skilling initiatives to keep up with the pace of technological developments and built a ‘future-ready’ talent pool. #NAD Learn, the Al-based platform with interactive, on-demand, contextual and hyper-personalised up-skilling is helping the Company develop full-stack professionals. Your Company has supplemented this with young leadership development programs as well

as new policies to promote niche skilling and fast-track career growth. Employees can learn and grow as a Fresher through Elevate, in customer deployments through Project Skilling, for career progression through Future Skilling and into the leadership pipeline through journey-based programs. The Company also offers super-specialization skilling programs including Architect CoE, HiPOT programs at units and Program Manager CoE through EMBARK. Some new programs that the Company has recently launched for high-potential talent development include MALT and TrIBE.

Leadership: Integrative Thinking

The natural culture of empowerment that was supercharged during the pandemic continues to be the mainstay in the current hybrid work environment. Your Company aims to help employees imbibe mindsets & behaviors for the future which include a renewed focus on Integrative Thinking, Business & Financial Acumen, Bias for Action, Closure over Follow-up, Data over Emotions and Extreme Ownership. This was reinforced through the adoption of an industry leading learning platform - Harvard Manage Mentor Spark aimed at imparting best-in-class training at every level in realtime. Your Company has a robust Talent Management process for developing the leadership talent pipeline and has adopted consistent coaching practices for managers. Apart from Coaching, the employees have experienced new forms of learning with technology-enabled tools and pedagogies. For example, the ‘Wheel of Life’ is a customized self-coaching tool with gamified journeys, and personalized Habit Tracking making personal and professional well-being goals accessible to every employee.

Performance: Feedback focused

Your Company launched the Annual Performance Feedback cycle in December 2022. In order to build a culture where performance is enabled through feedback, Managers have been trained to have better performance review dialogues with their direct reports and work on an outcome-based evaluation rather than process or effort measurement. Your Company is creating a High-Performance Culture through hyper-personalized Incentive plans. Your Company has a suite of Incentive plans that are designed to create a strong alignment between Individual growth and Organization performance.

Wellness: Collective well-being

Your Company puts a happier, healthier and more productive workforce at the core of its business, policies and decisions. Your Company has designed

initiatives covering eight dimensions of wellness -Physical, Occupational, Emotional, Spiritual, Social, Environmental, Financial and Intellectual. The focus on preventative care with Corporate paid preventive health check, on-campus doctor consultations & counselling programs, helps employees diagnose any health condition in advance. To tackle IT industry specific issues, the Company organizes wellness sessions on Ergonomics, Healthy eating, Lifestyle management etc. Multiple tech-enabled wellness interventions like Kick the Butt (Smoking Cessation Program), Bend it like TechM (Guide to Ergonomics), Dump the Plump (Weight loss challenge) etc. have helped employees create healthier habits. Through the People Care program, managers are encouraged to show their human side and empower their team members to pursue collective well-being.

Communication: Building purpose

A robust communication process is at the heart of the Company’s vibrant culture. Employees are kept connected and informed through multiple media. Your Company’s 360-degree communication framework ensures employees have access to connect with leaders, peers and the external world. With publications, platforms, storytelling, campaigns, and connects, the organizational culture is shared with all. Your Company shares stories of diverse individuals achieving extraordinary things using structured formats like #RiseFromWithin. Leaders in the Company share not just business updates and success stories but personal anecdotes that reinforce the belief of a shared destiny.

Engagement: Hybrid connects

For an increasingly hybrid workplace, the Company has designed several virtual ‘water-cooler’ moments like All Hand Meets with CXO, Prime Time, Location Connects etc. along with family connects. Employees have platforms like MS Teams and Cisco WebEx for collaborative yet decentralized working. Your Company also organized on-ground engagement linked to TechM’s FIDE partnership for the Chess Olympiad. TechM CARES Action Planning workshops were also organized across different business units to implement changes based on employee feedback. Your Company also organized more than 1,200 engagement programs globally linked to Rise Refresh.

Rise Refresh: #TogetherWeRise

For more than a decade, the Rise philosophy has inspired employees from across the Mahindra Group to come to work and build something meaningful.

Since then, the world has changed with the rise of disruptive technologies, changing start-up ecosystem, climate change and recently, the pandemic. This is why, the Company has defined a new core purpose and brand pillars of Rise to simplify and sharpen its commitments. Your Company has leveraged every possible medium to ensure that this is communicated to all employees. From the conventional posters, communities, blogs, leader-bytes, microsite, quizzes and signatures route to the unconventional music, memes, WhatsApp stickers, GenZ lingo, podcast conversations and comic strips, Rise has touched the heart of every employee.

Diversity: Respecting Individuality

Your Company believes that respecting diversity and ensuring inclusion is fundamentally the right thing to do. It respects, embraces and celebrates the uniqueness of every individual. This also links back to the stated objective of the Company to be human-centered by encouraging associates to bring their most authentic selves to work. Your Company initiated the Maternity Assistance Program (MAP) to support employees who were on Maternity Leave in their transition back to work. The Company has also organized several Fireside chats featuring women with STEAM (Science, Technology, Engineering, Arts, Mathematics) roles to inspire others to grow in these fields. Through the ‘Restart’ Program, the Company aims to help Women IT Professionals restart their career after a break.

Recognition: Appreciation always

Your Company believes in appreciating, recognizing, and celebrating by building a culture where good work and behavior are appreciated. The Company has designed specialized recognition programs where rewards, tenure, performance, and contribution are celebrated, often with the loved ones of employees. The recognition program is centered around n = 1, that is, the individual at the heart of everything. A key part of personalizing recognition is to bring it to the desk of every employee. This is enabled by the KUDOS portal that offers recognition badges as well as redemption options for the points earned. Giving employees the ability to appreciate colleagues and sustained campaigns have led your Company to have an industry leading rewards penetration of ~74% including monetary and non-monetary recognition. Tenure is rewarded with personalized gifts for both the employee and their family members. Lastly, there are several organizational level awards for outstanding achievements like the ACE, STAR, Location Council and Spotlight awards.

HR Digitization: Experiencing technology

Your Company has revolutionized employee experience by deploying technology at different touchpoints of their lifecycle. Your Company continued its internal automation focus by using Robotic Process Automation for completing common workforce actions to reduce manual work. Your Company has also integrated HR Chatbot UVO and Technical Support Chatbot ATOM into MS Teams making it easier to perform workforce actions like leave applications, pending approvals, ticket registrations etc. Developing an "Attrition Prediction Model” has provided Your Company with an early warning system predicting the employees’ likelihood to quit, giving the Business HR team the ability to stage an intervention. The Company has also explored the use of Metaverse where three dimensional avatars interact in a virtual world to develop modules for hiring and on-boarding. Translating these experiences to mobile devices, the Company has developed ‘The Wheel of Life’ application as a self-coaching tool.

QUALITY

The Company continues its focus on quality and strives to exceed customer expectations at all times. During the year, it continued to strengthen the implementation of Quality systems and upgraded the processes/systems to comply with CMMI V 2.0 for both Development and Services and currently assessed for maturity level 5. Similarly it underwent various upgrade and re-certification audits for multiple standards during the year in order to meet client demands and enhance value delivery - successfully re-certified, ISO 9001:2015 (Quality Management System), ISO 20000-1:2018 (Information Technology Service Management System), ISO 27001:2013 (Information Security Management System), ISO 27701:2019 (Privacy Information Management System), TL9000 R 6.2/ R5.7 (Quality Management Systems for Tele Communications industry), ISO 13485:2016 (Quality Management Systems for medical devices - scope of certification limited to medical devices business within Tech Mahindra), AS9100 Rev D (Standard for Aerospace domain - scope of certification limited to the aerospace business within Tech Mahindra), ISO 17025:2017 - Laboratory Quality Management Systems for our device testing labs.

In addition to these, your Company also maintains its commitment to health, safety and environment by continually improving its processes in accordance with ISO 14001:2015 (Environmental Management System) and ISO 45001: 2018 (Occupational Health and Safety

Assessment Series) standards. Your Company is also certified on ISO 22301:2012 (Societal Security and Business Continuity Management System) and has a comprehensive Business Continuity and Disaster Recovery framework, to prevent potential business disruptions in the event of any disaster. It has processes that helped resume services to customer’s acceptable service levels. Automated Service Desk with SLAs for enabling business and Vulnerability Assessment and Penetration Testing Lab for secured corporate network operations are highlights that showcase the information security posture of the Organization.

Tech Mahindra (IT Division) has been assessed for the implementation of high maturity business excellence practices at Mahindra Group (Services Sector). It has been assessed at TMW Maturity Stage 7 (on scale of 1-10 stages) of Mahindra Business Excellence Framework - The Mahindra Way. These certifications are testimony of the robustness of business processes and at large, the quality culture imbibed in the organization.

Your Company has institutionalized the Deliverability Risk Assessment (DRA) practice - to assess the readiness and to identify risks at the beginning of the program, continued to strengthen the process for transforming Quality Assurance processes & delivery methods to adopt and strengthen Delivery excellence, Risk governance, and further enhance automation to enable quality delivery to the customer. Quality index which is a measure of quality of products and services delivery is institutionalized.

The Company is ensuring all these initiatives are in place, to ensure that it delivers as stated in its Quality Policy.

DIRECTORS

During the year under review, all Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Independent Directors have also given declaration of compliance with Rules 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014, with respect to their name appearing in the data bank of Independent Directors maintained by the Indian Institute of Corporate Affairs.

Pursuant to the provisions of Section 152(6)(c) of the Companies Act, 2013, Mr. Manoj Bhat, Director (DIN: 05205447) is liable to retire by rotation and being eligible offers himself for reappointment.

During the year under review, Ms. Penelope Fowler (DIN: 09591815) was appointed as Additional Director by the Board of Directors of the Company on May 13, 2022. She was further appointed as an Independent Director pursuant to the special resolution passed by the shareholders at the Annual General Meeting held on July 26, 2022 for a period of 5 years.

In view of the retirement of Mr. C. P Gurnani, Managing Director and CEO, the Board of Directors at its meeting held on June 15, 2023, based on the recommendation of the Nomination and Remuneration Committee approved the Appointment of Mr. Mohit Joshi, (DIN: 08339247) as Additional Director with effect from June 20, 2023 to hold office up to the date of ensuing Annual General Meeting. Further in order to ensure smooth transition into the role of Managing Director as Mr. C. P. Gurnani would retire on December 19, 2023, Mr. Mohit Joshi was also appointed as a Whole Time Director designated as Managing Director (Designate) and Key Managerial Personnel with effect from June 20, 2023 up to December 19, 2023 subject to the approval of the members of the Company and the Central Government.

The Board of Directors, based on the recommendation of Nomination and Remuneration Committee also approved the appointment of Mr. Mohit Joshi as Managing Director & Chief Executive Officer of the Company and Key Managerial Personnel under the Companies Act, 2013 from December 20, 2023 to June 19, 2028 (both days inclusive), subject to approval of the members of the Company and the Central Government.

The Board recommends the appointment of Mr. Manoj Bhat and Mr. Mohit Joshi to the Members at the ensuing Annual General Meeting. The brief profile of Mr. Manoj Bhat and Mr. Mohit Joshi is given in the Notice of the Annual General Meeting.

In terms of Regulation 24(1) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, Mr. T. N. Manoharan, Lead Independent Director of the Company has been appointed as Director on the Board of Tech Mahindra (Americas) Inc., a wholly

owned unlisted material subsidiary of the Company with effect from May 21, 2019.

In the opinion of the Board of Directors, the Independent Directors have relevant proficiency, expertise and experience.

FAMILIARISATION PROGRAMME

These programmes aim to provide insights into the Company to enable the Independent Directors to understand its business in depth and contribute significantly to the Company. The details of the program for familiarisation of the Independent Directors with the Company are available on its website and can be accessed at https://insights.techmahindra.com/ investors/tml-familarisation-progarmmes-for-IDs.pdf

The Board of Directors are regularly updated on changes in statutory provisions like amendments in Corporate Laws, SEBI Regulations, Taxation Laws and People related laws as applicable at the quarterly Board meetings. The Board members are also updated on the Risk universe applicable to the Company’s business. The MD & CEO of the Company had quarterly sessions with Board members sharing updates about the Company’s business strategy, operations and the key trends in the IT industry that are relevant to the Company. These updates help the Board members in keeping abreast of key changes and their impact on the Company. Further Subject Knowledge Experts from various fields are also invited to the meetings of the Board/Committees to appraise the Board Members of the latest developments in the IT and the business.

TRAINING

The Company has laid down a policy on the training of Independent Directors as part of its governance policies. The Senior Leadership of the Company periodically updates the Directors on regulatory changes, business strategy and operations.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Regulation 19 read with Schedule II, Part D of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has devised a policy on evaluating the performance of the Board of Directors, the Chairman, Committees, and Individual Directors. The evaluation process was carried out through a web-based portal. The summary of the evaluation reports

was presented to the respective Committees and the Board. The Directors had given positive feedback on the overall functioning of the Committees and the Board. The suggestions made by the Directors in the evaluation process have been suitably incorporated in the processes.

NUMBER OF MEETINGS OF THE BOARD

The Board met five times during the Financial Year 2022-23. The meeting details are provided in the Corporate Governance report that forms part of this Annual Report. The maximum interval between any two meetings did not exceed 120 days as prescribed in the Companies Act, 2013 and SEBI Listing Regulations.

COMMITTEES OF THE BOARD

As on March 31, 2023, the Board has constituted seven Committees, namely, Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk Management Committee, Corporate Social Responsibility Committee, Investment Committee and Securities Allotment Committee. The details of terms of reference of each Committee and the meetings held during the year are given in the Corporate Governance Report.

The Company has also formed Group Governance Council comprising of Board Members and Senior Management in terms of the SEBI Circular No. SEBI/ HO/CFD/CMD/CIR /P/2018/79 dated May 10, 2018, considering it has a large number of subsidiaries.

POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION

The Governance policies laid down by the Board of Directors of your Company include:

i. Policy on the appointment and removal of Directors, Key Managerial Personnel and Senior Management.

ii. Policy on remuneration to the Directors, Key Managerial Personnel and Senior Management and other Employees.

The extract of these two policies is provided in "Annexure III”.

The policies are available on the website of the Company and can be accessed at https://insights. techmahindra.com/investors/Governance-Policies-including-remuneration-to-Directors-KMPS.pdf

SUCCESSION PLAN

In accordance with the principles of transparency and consistency, your Company has adopted governance policies for appointments, remuneration and evaluation of its Board of Directors, Key Managerial Personnel & Senior Management. In line with these Governance policies, the Company has established a formal Succession Planning Program for Key Managerial Personnel across the organization. The Board evaluates all such plans at a regular interval and institutes a formal program for filling any such critical position. The Board evaluates both internal and external candidates for such positions along with the recommendations of the management. The Company also has a leadership development program where it identifies high potential managers, and trains them to take up the positions of higher responsibility. The Company has identified the second line of leadership, which provides stability to the business in case of contingencies.

KEY MANAGERIAL PERSONNEL (KMP)

Pursuant to provisions of Section 203 of the Companies Act, 2013, Mr. C. P. Gurnani, Managing Director & Chief Executive Officer, Mr. Milind Kulkarni, Chief Financial Officer (up to May 31, 2022), Mr. Rohit Anand, Chief Financial Officer (w.e.f. June 1, 2022) and Mr. Anil Khatri, Company Secretary & Compliance Officer were the Key Managerial Personnel of the Company during the year under review.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, your Directors, based on the representation(s) received from the Operating Management and after due enquiry, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and, reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for the year ended on that date;

iii. proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts have been prepared on a going concern basis;

v. they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

vi. the proper systems to ensure compliance with the provisions of all applicable laws are in place and are adequate and operating effectively.

DETAILS WITH RESPECT TO ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has internal financial controls which are adequate and were operating effectively. The controls are adequate for ensuring the orderly and efficient conduct of the business, including adherence to the Company’s policies, the safeguarding of assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records and timely preparation of reliable financial information.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / PROCEEDINGS

There are no significant and material orders passed by the regulators or courts or tribunal, impacting the going concern status and the Company’s operations in the future.

Further no application against the Company has been filed or is pending under the Insolvency and Bankruptcy Code, 2016, nor has the Company done any one-time settlement with any Bank or Financial institutions.

STATUTORY AUDITORS

The members, in the 35^th Annual General Meeting (AGM) held on July 26, 2022, appointed M/s. B S R & Co. LLP, Chartered Accountants, [ICAI Firm’s Registration No. 101248W/W- 100022] as the Statutory Auditors of the Company, to hold office for a further term of five consecutive years from the conclusion of the 35^th AGM of the Company held in

the Financial Year 2021-22 until the conclusion of the AGM of the Company for the Financial Year 2026-27 on such remuneration as may be determined by the Board of Directors.

There are no qualifications, reservations, adverse remarks or disclaimers made in the audit report for the Financial Year 2022-23.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies

(Appointment and Remuneration of Managerial

Personnel) Rules, 2014, the Company had appointed Makarand Lele & Co., Practicing Company

Secretary, Pune to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is available at "Annexure IV” to this report. There are no qualifications, reservations, adverse remarks or disclaimers made in the Secretarial Audit Report.

COMPLIANCE WITH SECRETARIAL

STANDARDS

The Company has complied with the applicable Secretarial Standards.

ANNUAL RETURN

Pursuant to the provisions of Section 92(3) read with Section 134(3) (a) of the Companies Act, 2013, the Annual Return in Form MGT-7 is available on the website of the Company and can be accessed at https://insights.techmahindra.com/investors/mgt-7.pdf

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

During the year, the Company has transferred the unclaimed dividends of '' 2,13,40,674 to the Investor Education and Protection Fund. Further, 2,26,700 corresponding shares on which dividends were unclaimed for seven consecutive years were transferred to the fund as per the requirements of the IEPF Rules. The Members are requested to check the details of the unpaid dividend on the website of the Company and claim their dividend to avoid the shares from being transferred to IEPF.

MANAGERIAL REMUNERATION

Disclosures of the ratio of the remuneration of each director to the median employee’s remuneration and other details as required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014 as amended from time to time, are provided as "Annexure V”. None of the Directors or the Managing Director & CEO of the Company received any remuneration or commission from Subsidiary Companies of your Company.

The details of remuneration paid to the Directors including the Managing Director & CEO of the Company are provided in the Corporate Governance Report.

PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Companies Act, 2013 ("the Act”) read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. However, pursuant to first proviso to Section 136(1) of the Act, this report is being sent to the Shareholders excluding the aforesaid information. Any shareholder interested in obtaining said information may write to the Company Secretary at the Registered Office / Corporate Office of the Company and the said information is open for inspection at the Registered Office of the Company.

POLICY ON PREVENTION OF SEXUAL HARASSMENT

Your Company has laid down the Prevention of Sexual Harassment (POSH) policy which is available on its website. The Company has zero tolerance on Sexual Harassment at workplace. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The status of complaints received under POSH and redressed by the POSH Committee of the Company, during the Financial Year under review, are given below:

a) Number of complaints received during the year - 74

b) Number of complaints redressed during the year - 73@

c) Number of complaints pending for redressal as on March 31, 2023 - 3

@ - Includes 2 complaints received during the previous year and redressed during the year.

There are focused campaigns on the POSH policy within the Company and awareness drives that

take place. Furthermore, employees are required to undertake a mandatory certification on POSH to sensitize themselves and strengthen their awareness.

EMPLOYEE STOCK OPTION SCHEMES

During the year under review, there were no material changes in the Employee Stock Option Schemes (ESOPs) of the Company and the Schemes are in compliance with the SEBI Regulations on ESOPs.

As per Regulation 14 of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, the details of the ESOPs are uploaded on the website of the Company and can be accessed at https://insights.techmahindra. com/investors/details-of-esops-fy-2022-23.pdf

CORPORATE GOVERNANCE

A report on Corporate Governance covering among others composition of the Board of Directors, details of meetings of the Board and Committees along with a certificate for compliance with the conditions of Corporate Governance in accordance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, issued by the Statutory Auditors of the Company, forms part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of your Company’s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)

SEBI, vide its circular dated May 10, 2021, made BRSR mandatory for the top 1,000 listed companies (by market capitalization) with effect from the FY 2022-23. The Company voluntarily published BRSR for the Financial year 2021-22. The BRSR Report for the year 2022-23 is enclosed as part of this Annual Report.

In addition to the BRSR, the Integrated Annual Report of the Company provides an insight on the various ESG initiatives adopted by the Company. The ESG disclosures have been independently assured by KPMG.

COST RECORDS

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities of the Company.

RISK MANAGEMENT

The Risk Management Committee of the Board of Directors devised a Risk Management Policy and guides the operating management to identify risks, analyze their probability and impact and prepare mitigation plans. It periodically reviews the Risk Management Framework & Enterprise Risk Register which is presented by the Chief Risk Officer. The Company identifies all potential risks viz. economic, business, currency, operations, climate, governance, finance, cyber, business continuity etc. and prepares a mitigation plan for each of the risks. The elements of risk as identified by the Company with the impact and mitigation strategy are set out in the Management Discussion and Analysis Report.

ESTABLISHMENT OF VIGIL MECHANISM

The Company has laid down Whistle Blower Policy covering Vigil Mechanism with protective clauses for the Whistle Blowers. The Whistle Blower Policy is made available on the website of the Company.

DEPOSITS / LOANS & ADVANCES, GUARANTEES OR INVESTMENTS

The Company has not accepted any deposits from the public during the year under review. The particulars of loans/advances, guarantees and investments under Section 186 of the Companies Act, 2013 are given in the notes forming part of the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All transactions entered with Related Parties as defined under Section 2(76) of the Companies Act, 2013 and Regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, ("The Listing Regulations”), during the financial year under review were in the ordinary course of business and at an arm’s length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no transactions with related parties in the Financial Year which conflicted with the interest of the Company and required compliance of the provisions of Regulation 23 of the Listing Regulations.

Suitable disclosure as required by the Indian Accounting Standards (Ind AS 24) has been made in the notes forming part of the Financial Statements.

The Company has formulated a policy on the Related Party Transactions and dealing with Related Party Transactions which has been uploaded on the website of the Company and can be accessed at https:// insights.techmahindra.com/investors/Related-Party-Transactions-Policy.pdf

The particulars of related party transactions in prescribed Form AOC - 2 are attached as ‘Annexure VI”. Pursuant to Regulation 23(9) of the Listing Regulations, your Company has filed half yearly report on Related Party Transactions with the stock exchanges.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are provided in "Annexure VII” which forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY

The CSR vision of the Company is "Empowerment through Education.”

In compliance with the guidelines prescribed under Section 135 of the Companies Act, 2013, your Company has constituted a Corporate Social Responsibility (CSR) Committee of the Board. The CSR policy, covering the Objectives, Focus Areas, Governance Structure Monitoring and Reporting Framework among others is approved by the Board of Directors. In accordance with the amendments made in Section 135 in January 2021, the CSR Policy has been duly revised and is available on the website of the Company and can be accessed at https://insights. techmahindra.com/investors/tml-csr-policy-23.pdf

The Company has spent more than 2% of the average net profits of the Company during the three immediately preceding Financial Years on CSR.

The Company’s social initiatives are mainly carried out by Tech Mahindra Foundation and Mahindra Educational Institutions, Section 8 (erstwhile Section 25) Companies promoted by the Company.

TECH MAHINDRA FOUNDATION (TMF) EDUCATION

The key initiatives taken by TMF in the arena of school education include:

ALL ROUND IMPROVEMENT IN SCHOOL EDUCATION (ARISE)

Tech Mahindra Foundation’s educational initiatives under ARISE are long-term school improvement programmes, in partnership with local governments and partner organisations. The Foundation in 2022-23 worked with 18 government primary & secondary schools to transform them into model schools of excellence. A total of 5,224 students were positively impacted under this programme, of which 2,832 were girls.

During the year, the Foundation expanded its work for children with special needs through its ARISE programme. This programme is a variant of ARISE in which children with special needs are provided chronic therapy as well as special education to help them lead more fulfilling lives. Through 32 projects, the programme enabled 4,829 children with special needs to become better learners with greater independence in managing their lives. The Foundation has taken up the provision of assistive technology for these children as an important value addition to its work in ARISE .

SHIKSHAANTAR

Shikshaantar, envisioned as a programme for enhancing the capacity of government school teachers, has emerged as an important programme in the education portfolio of the Foundation. TMF works with the Municipal Corporation of Delhi by running their In-Service Teacher Education Institutes. With the merger of the MCDs, TMF now has the responsibility of training teachers from close to 1,500 primary schools in Delhi. During the year under review, as many as 4,379 teachers were trained as part of Shikshaantar. This included specially designed modules for Digital Literacy, Child Safety, Cyber Security and Mental Health that were delivered to the teachers in a hybrid mode.

MOBILE SCIENCE LAB & ROBOTICS LAB

In order to increase the footprint of its work in Education and reach the unreached, TMF launched a unique initiative in 2019-20 - The Mobile Science Lab (MSL). For this, a Mahindra bus has been remodeled to become a science lab on wheels and has been travelling from school to school in East Delhi to provide STEM learning for children in grades 3 and 4 in these

schools. The MSL program benefitted as many as 6,861 students and 77 teachers throughout the year.

Following the success of the MSL program, TMF has also set up a Robotics Lab at one of its ARISE schools in Delhi which is an all-girls school. This lab was inaugurated in November 2022, and nearly 300 girls from this school are the potential beneficiaries.

EMPLOYABILITY

Skills-for-Market Training (SMART) is the Foundation’s flagship programme in employability. It is built on the vision of an educated, enabled and empowered India, and the belief that educated and skilled youth are the country’s true strength. The programme started with 3 Centres in 2012 and is currently running over 85 Centres at 10 locations across India. These include SMART Centres, SMART Centres (training for people with disabilities), and SMART-T Centres (training in technical trades).

In 2022-23, your Company trained 17,641 young women and men under its SMART program, of which, 1,303 were persons with disabilities. More than 70% of the graduates are placed in jobs across multiple industries upon successful completion of the training. The average salaries being earned by the graduates of the SMART program have been steadily rising and saw a 10% jump over the previous year.

The Foundation’s commitment to setting new benchmarks in skill development in India has been underscored by the setting up of Tech Mahindra SMART Academies, which provide the highest quality of skill training to youngsters in Healthcare and Digital Technologies. During FY 2022-23, 3,584 students were trained at the nine Academies that are now functional - 5 in Healthcare, 3 in Digital Technologies, and 1 in Logistics.

TMF’S OUTREACH INITIATIVES

In addition to all the core programs described above, Tech Mahindra Foundation is now also implementing several outreach projects in collaboration with various agencies. As part of these, the TMF team members are engaged in activities such as community health initiatives, teacher training, provision of content for other large-scale projects, etc. As part of such outreach projects, TMF supported 20,734 beneficiaries, taking the total tally of direct beneficiaries for the year to 61,995. This is nearly 50% more than the number of direct beneficiaries for FY 2021-22, which stood at 41,374.

MAHINDRA EDUCATIONAL INSTITUTIONS (MEI)

MEI - a not-for-profit, 100% subsidiary of the Company has set up Mahindra Ecole Centrale in August 2014 - through a collaborative venture between Mahindra Educational Institutions and Ecole Centrale of Paris, France (now known as Centrale Supelec) and the JNTU Hyderabad - to offer undergraduate engineering programs. Through this strong Indo-French Collaboration with Centrale Supelec and Industry connect with Tech Mahindra, MEC has emerged as a disruptive player in the field of Technical Education.

MEI has sponsored the setting up of Mahindra University to introduce diverse streams of education in addition to Engineering. Further the Engineering stream is being transitioned to Mahindra University.

MAHINDRA UNIVERSITY (MU)

Mahindra University ("MU”) (sponsored by Mahindra Educational Institutions, ("MEI”) - a not-for-profit, 100% subsidiary of Tech Mahindra), was notified on May 20, 2020 by the Government of Telangana vide The Telangana State Private Universities (Establishment and Regulation) Act, 2018 for "educating future citizens for and of a better world”.

The Ecole Centrale School of Engineering (ECSoE) currently runs various UG, PG and Ph.D. programs in cutting-edge engineering departments. ECSoE also launched a Centre for Life Sciences and offers courses in biotechnology and computational biology under it. The school plans to launch the 2.5 year integrated programs in Biotechnology & CSE for AY 2023-24.

Cornell University’s SC Johnson College of Business, an ivy league institution is the "Academic Partner” for School of Management. Mahindra University’s School of Management (MU - SoM) will benefit significantly from Cornell University’s expertise in curriculum development, faculty exchange programs including some specialty courses delivery by the Cornell faculty to Mahindra University students, as well as student immersion at Cornell. The School of Management currently conducts BBA, BA, E-MBA, and MBA (starting in 2023) programs.

The School of Law, Mahindra University, commenced operations in September 2021 in Hyderabad offering 5-year integrated programs in BA LL.B and BBA LL.B. It was founded on the philosophy of securing justice, equality, and service to all sections of society. With the needs of modern society evolving rapidly, there is a renewed focus on the importance of the discipline of

law. The School of Law will aim to make a difference to the legal profession and practice by providing a diverse, flexible curriculum and pedagogy, touching on several aspects of domestic and international law, while appraising the students of the latest trends in academia and practice. Starting 2022, the School of Law has launched a 3-year LLB (Hons) program and intend to launch a 6-year integrated B.Tech LLB course starting Academic Year 2023.

The University also plans to launch the following programs/schools for the Academic Year 2023-24:

1. School of Media

a. 4-year B.Tech. (Computation & Media)

b. 3-year BA (Digital Media & Communication)

2. School of Hotel Management

a. 3-year B.Sc. (Hospitality & Hotel Administration)

In the academic year 2022, a total of 2,971 students were studying under various programs across all schools and departments. The new admissions for academic year 2022 are 1,236 students of which 1,128 students are in various UG programs, including School of Management and School of Law, 22 students in the PG programs of School of Engineering and 86 students in the Ph.D programs across all the schools.

The Annual Report on CSR activities is provided as "Annexure VIII”.

SUSTAINABILITY

Your Company aligns closely with the Mahindra Group’s ambition to Rise: Be People positive, Planet positive, and Trust positive. The Company holistically embraces ever greater responsibility towards protecting the environment, empowering the society, and providing good governance.

Your Company’s strategy for creating long-term sustainable value is by improving, scaling, and transparently communicating our ecological, social, and economic impacts. Our strong governance framework led by the Board of Directors of your Company, who have oversight of the Company’s overall strategy and future direction and ensures the planning and implementation of environmental and social programs.

The Company’s holistic approach enables to drive sustainable impact in alignment with leading global frameworks, initiatives, and agendas committed to furthering sustainability such as the TCFD, SASB, GRI, as well as the Paris Agreement, the UNGC and the UN SDGs.

As a business, the Company recognizes the value of following the UN SDGs (Sustainable Development Goals) of People, Planet, Prosperity, and Partnership and continues to create value through initiatives that cater directly to these aspects of our performance.

People:

• Great place to work: Working to enhance our organizational culture by enabling our associates with access to advanced technologies, providing Learning & Development opportunities to help develop their skills and areas of expertise and providing them with robust career development programmes.

• Work-life balance: Providing feasible and flexible work-life balance and integration along with a range of associate-friendly policies and processes to reduce attrition.

• Diversity and inclusion: Ensuring that our organization continues to transcend into the realms of gender diversity and includes people with disabilities as well as people from the LGBTQIA community as part of being a socially responsible business.

• Employee engagement & recognition:

Ensuring our associates are engaged, feel valued, and recognized through a robust performance management system, a flexible system of working, and an extensive system of benefits and perquisites.

• Individual Social Responsibility: Encouraging associates to contribute to the society & environment and make these activities an integral part of their day-to-day activities.

Planet:

• Carbon neutrality and Net zero: Committing to carbon neutrality (2030) and Net zero (2035) by switching to renewable energy through on site installations and open access; improving energy efficiency through installation of LEDs, sensors; boosting green investments by

implementing Carbon Price; optimizing business travel by enabling virtual meetings; encouraging use of public transport and carpooling to reduce employee commute emissions; carbon sequestration through tree plantation; moving towards a low carbon economy by optimizing operations to ensure environmental protection.

• No waste to landfill: Installing Organic Waste Converters and vermicomposting plants at own campuses to convert food waste to manure, cutting down their transportation emissions and reducing waste to landfill.

• No to plastic: Maintaining plastic-free campuses and encouraging all stakeholders to use ecofriendly and biodegradable materials. Spreading awareness and initiating campaigns on preventing single-use plastic.

• Reduce, Reuse, Recycle, Recover: Implementing the process of Reduce, Reuse, Recycle and Recover across the value chain to limit waste and enable a circular economy.

• Being water positive: Improving water efficiency and increasing water savings by using water sensors, restrictors and water-efficient coolers, recycling wastewater through STPs, and recharging groundwater levels with Rainwater Harvesting Pits.

• Promoting Biodiversity: Protecting local flora and fauna across all our locations to ensure that we do not adversely impact biodiversity through our operations.

Prosperity:

• Innovation: Embracing technology and innovation by incorporating IoT, Blockchain, AI and Machine Learning to develop a portfolio of sustainable solutions that help reduce emissions and other negative impacts of climate change.

• Green solutions: Investing in Sustainability reporting solution (i.Sustain) and Climate Risk Management platforms, Smart grid, Microgrid-As-A-Service, Community Action Platform for Energy, Integrated Electric Vehicle Charging systems (IEVCS), Smart data hubs and Smart Cities for our Customers to reduce their carbon emissions.

• Connecting with customers: Embracing brand equity by connecting with our customers to address their current and future needs and ensuring customer satisfaction.

Partnership

• Learning and Sharing: Partnering with collaborators & partner companies to create an alliance ecosystem and supplement each other’s capabilities on joint projects. Collaborating with academia, businesses, NGOs, and governments to address some of the global challenges like health care, climate change, inequality, etc.

• Sustainable supply chain: Ensuring that we are in synch with our value chain in our commitment towards climate action and helping our suppliers follow the highest standards of sustainable and ethical best practices within their own organizations.

Tech Mahindra has drafted its Integrated Annual report in accordance with Global Reporting standards and frameworks with the data assured by a third party thus complying with the highest transparency standards.

The Company’s progress against the sustainability targets and metrics are disclosed in the externally assured Integrated reports available on the website of the company- https://www.techmahindra.com/en-in/ sustainability/

AWARDS AND RECOGNITION

Your Company continued its quest for excellence in its chosen area of business to emerge as a true global brand. Several awards and rankings continue to endorse your Company as a thought leader in the industry. A few of the prominent Awards / recognitions received by the Company during the Financial Year 2022-23 include:

• Tech Mahindra won several medals in the USA for its people practices- Brandon Hall HCM Excellence Awards, Stevie Awards for Great Employers and was also included in the 2023 Bloomberg Gender-Equality Index (GEI).

• Tech Mahindra Philippines was certified as a Great Place to Work.

• The Economic Times bestowed Tech Mahindra with several recognitions including Great Manager Awards (People Business), Human Capital Awards and ‘Best Organizations for Women’ (Femina).

• Tech Mahindra was also recognized by Avtar and Seramount as "Champions” in Most Inclusive Companies Index and "Top 10” in Best Companies for Women in India.

• Dun & Bradstreet India recognized Tech Mahindra as a top performer in the ESG Performance -Software and BPM sector.

• Tech Mahindra won Frost & Sullivan’s Technology Innovation Leadership Award 2022 for Metaverse Technology Services.

• Tech Mahindra was recognized among the Iconic brands at ET Iconic Brands 2022.

• TechM amplifAI0->^ is awarded "Cool Product or Service of the Year in Business 2022.” at the 12^th Annual 2022 Business Excellence Awards by Globee® Business Awards.

• Tech Mahindra MEA was recognized for Ground-breaking products/services in Ecommerce at GITEX.

• Tech Mahindra was awarded ‘A’ rating in MSCI ESG ratings 2022.

• Tech Mahindra received the "Mahatma Award 2022 for Social Good & Impact - Decent Work and Economic Growth” for its SMART Program.

These awards are a reflection of the Company’s continued efforts in the fields of business, sustainability, human resource management and its sustained progress towards creating a better society for all.

ACKNOWLEDGEMENTS

Your directors place on records their appreciation for the contributions made by employees towards the success of your Company. Your directors gratefully acknowledge the co-operation and support received from the shareholders, customers, vendors, bankers, Regulatory and Governmental authorities in India and abroad.

For and on behalf of the Board

Anand G. Mahindra Place: Mumbai Chairman

Date: 15^th June, 2023 (DIN: 00004695)

Note: The Board of Directors at its meeting held on April 27, 2023, had approved the financial statements for the financial year 2023 and the Director''s Report along with the Annexures. However, in view of the appointment of Mr. Mohit Joshi as Additional Director and Whole Time Director, the revised Director''s Report was approved by the Board at its Meeting held on June 15, 2023.

1

Interim Dividend (Special Dividend) for the Financial Year ended March 31, 2022 and Final Dividend for the Financial Year ended March 31, 2021

---

Mar 31, 2023

Your directors are pleased to present the Thirty Sixth Annual Report along with the audited accounts of your Company for the year ended March 31, 2023.

FINANCIAL RESULTS (STANDALONE)

('' in Million)
For the year ended March 31	2023	2022#
Income	437,856	372,079
Profit Before Interest, Depreciation and Tax	58,978	72,383
Interest	(1,808)	(689)
Depreciation	(8,129)	(7,403)
Profit Before Tax	49,041	64,291
Provision for Taxation	(11,266)	(14,058)
Profit After Tax	37,775	50,233
Other Comprehensive Income	(2,480)	1,200
Balance brought forward from previous year	216,090	203,329
Profit available for appropriation	253,917	253,292
Equity Dividends	(46,705)1	(43,624)1
Transfer to retained earnings on account of options lapsed	99	74
Transferred from Special Economic Zone re-investment reserve on utilization	7,151	6,348
Balance carried forward	214,462	216,090

# - Figures for the previous year are restated after considering the amalgamation of Tech Mahindra Business Services Limited and Born Commerce Private Limited with the Company.

¹ Interim Dividend (Special Dividend) for the Financial Year ended March 31, 2023 and Final Dividend for the Financial Year ended March 31,2022

DIVIDEND

The Board of Directors on November 1, 2022 approved a special interim dividend of '' 18/- per share (i.e. 360%) on the par value of '' 5/- each which was paid by the Company to the shareholders whose names appeared in the Register of Members as on November 10, 2022, being the record date for the payment of dividend. Your Directors are pleased to recommend a final dividend of '' 32/- per share on par value of '' 5/- (i.e. 640%), payable to those Shareholders whose names appear in the Register of Members as on the Book Closure Date. Thus, the total dividend for the FY 2022-23 will be '' 50/- per share (i.e. 1000%) against the dividend of '' 45/- per share (i.e. 900%) paid for the Financial Year 2021-22.

The Board of your Company decided not to transfer any amount to the General Reserve for the year under review.

Your Company has formulated a Dividend Policy which is disclosed on the website of the Company and can be accessed at https://insights.techmahindra.com/ investors/tml-dividend-distribution-policy.pdf

SHARE CAPITAL

During the year under review, your Company allotted 2,313,996 equity shares on the exercise of stock options under various Employee Stock Option Schemes. Consequently, the issued, subscribed and paid-up equity share capital has increased from '' 4,859.17 million divided into 971,833,479 equity shares of '' 5/- each to '' 4,870.74 million divided into 974,147,475 equity shares of '' 5/- each.

ALTERATION OF ‘CAPITAL CLAUSE’ OF MEMORANDUM OF ASSOCIATION

Consequent to the merger of Tech Mahindra Business Services Limited and Born Commerce Private Limited with the Company, the Authorised Capital of the

Company increased from '' 8,336.50 million divided into 1,667,300,000 equity shares of '' 5/- each to '' 9,093 million divided into 1,818,600,000 equity shares of '' 5/- each.

Accordingly, the Capital Clause of the Memorandum of Association of the Company was altered and substituted with the new Clause V to reflect the corresponding changes in the Authorised Share Capital.

BUSINESS PERFORMANCE / FINANCIAL OVERVIEW

Imperative for businesses and your Company to stay relevant is the need to be cognizant of the tectonic shifts occurring around the world. Technological innovations, climate change and the need for inclusive growth and representation among others is defining the way organization’s function. Tech Mahindra has remained on the forefront of all cutting-edge technological advancements and harnessed many emerging technologies to transform customer and employee experiences. Your Company’s execution strategy is indexed to the pillars of client focus, portfolio synergy, operational rigor, new age technology bets and people transformation.

During the Financial Year ended on March 31, 2023, the Company’s revenues grew to '' 532,902 million on a consolidated basis as against '' 446,460 million in the previous year - indicating a robust growth of 19.4%. The growth was broad based across geographies as both Americas and Europe contributed in line with overall business growth. The Company also saw healthy growth across business segments in Communications, Media and Entertainment (CME) and Enterprise verticals.

The EBITDA on a consolidated basis for the Financial Year 2023 was '' 80,288 million, similar to the previous year’s EBITDA of '' 80,200 million. The resultant EBITDA margins were in the range of 15.1% in FY 2023 compared to 18.1% in FY 2022. The post-tax profit of the Company was reduced to '' 48,313 million in FY 2023 as against '' 55,661 million in FY 2022.

The Company saw robust demand for digital transformation services with a focus on customer experience and cloud. The Company has seen new deal wins close to USD 3,000 million during the year, indicating a healthy growth momentum across all business verticals. Your Company’s investments in Enterprise SaaS and Hi-tech capabilities will help

it cater to increasing modernization demands from businesses in the Financial Year 2024 and beyond.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT

There have been no material changes and commitments which affect the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this report.

ACQUISITIONS

Your company made the following acquisition during the FY 2022-23.

THIRDWARE SOLUTIONS LIMITED

The Company acquired 100% of the share capital of Thirdware Solutions Limited ("Thirdware”) on June 3, 2022 at a consideration up to USD 42 million including earnouts. Thirdware is a global player in Enterprise Applications and will enhance the Company’s digital solutions and services in automotive consultant and design, development and implementation in areas like ERP (Enterprise Resource Planning), EPM (Enterprise Performance Management), RPA (Robotic Process Automation) and IloT (Industrial Internet of Things). These capabilities will give the Company an edge in the manufacturing space.

UPDATE ON MERGER

Your directors at their meeting held on January 31, 2021 approved the Scheme of Merger of Tech Mahindra Business Services Limited (TMBSL) and Born Commerce Private Limited (Born) with the Company with the appointed date as April 1, 2021.

Hon’ble NCLT, Mumbai bench and Hon’ble NCLT, Chennai bench vide their order dated January 5, 2023 and January 12, 2023 respectively, approved the scheme of merger by absorption of the TMBSL and Born with the Company and their respective shareholders and the said Scheme has become effective on February 16, 2023.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES OF THE COMPANY

The performance and financial position of the subsidiaries, associates, and joint venture companies included in the consolidated financial statement is provided in accordance with the provisions of Section

129 read with Rule 5 of the Companies (Accounts) Rules, 2014 containing the salient features of the financial statement of the Company’s subsidiaries/joint ventures or associate companies in Form AOC - 1 in “Annexure I” to this report.

Pursuant to Rule 8(5)(iv) of the Companies (Accounts) Rules, 2014, the names of the companies which have been incorporated or ceased to be the subsidiaries, joint ventures or associate companies during the year are provided in “Annexure II” to this report. The Company is actively pursuing the initiative on the consolidation of its subsidiaries/branches to optimize the operational costs. During the year under review, your Company has closed/merged twenty subsidiaries.

HUMAN RESOURCES

The employees of the Company are the most critical asset to your Company. The Company has taken several steps to protect, retain, and improve the competencies of these assets including:

Hiring: Forecast to Fulfilment

Your Company has streamlined its talent hiring process adopting some best-in-class practices. By building predictability in talent planning & forecasting for new age skills, your Company has been able to fuel business growth. Your Company has revamped its Buddy Referral programs to recruit talent from existing employee networks while offering attractive incentives. Embracing diversity in the hiring process has improved the global and local representation of talent within the organization. The Company has also redesigned its Candidate Engagement process to focus on creating positive experiences from the issuing joining offer letter to internal deployment to client projects. With rigor in talent allocation and proactive skilling of bench talent, your Company has been able to increase its internal fulfilment to 71% from 48% which is the best in the industry.

Learning: Skilling on the job

With the growth in digital business, your Company has been transforming its workforce both at speed and scale. The Company accelerated skilling initiatives to keep up with the pace of technological developments and built a ‘future-ready’ talent pool. #NAD Learn, the Al-based platform with interactive, on-demand, contextual and hyper-personalised up-skilling is helping the Company develop full-stack professionals. Your Company has supplemented this with young leadership development programs as well

as new policies to promote niche skilling and fast-track career growth. Employees can learn and grow as a Fresher through Elevate, in customer deployments through Project Skilling, for career progression through Future Skilling and into the leadership pipeline through journey-based programs. The Company also offers super-specialization skilling programs including Architect CoE, HiPOT programs at units and Program Manager CoE through EMBARK. Some new programs that the Company has recently launched for high-potential talent development include MALT and TrIBE.

Leadership: Integrative Thinking

The natural culture of empowerment that was supercharged during the pandemic continues to be the mainstay in the current hybrid work environment. Your Company aims to help employees imbibe mindsets & behaviors for the future which include a renewed focus on Integrative Thinking, Business & Financial Acumen, Bias for Action, Closure over Follow-up, Data over Emotions and Extreme Ownership. This was reinforced through the adoption of an industry leading learning platform - Harvard Manage Mentor Spark aimed at imparting best-in-class training at every level in realtime. Your Company has a robust Talent Management process for developing the leadership talent pipeline and has adopted consistent coaching practices for managers. Apart from Coaching, the employees have experienced new forms of learning with technology-enabled tools and pedagogies. For example, the ‘Wheel of Life’ is a customized self-coaching tool with gamified journeys, and personalized Habit Tracking making personal and professional well-being goals accessible to every employee.

Performance: Feedback focused

Your Company launched the Annual Performance Feedback cycle in December 2022. In order to build a culture where performance is enabled through feedback, Managers have been trained to have better performance review dialogues with their direct reports and work on an outcome-based evaluation rather than process or effort measurement. Your Company is creating a High-Performance Culture through hyper-personalized Incentive plans. Your Company has a suite of Incentive plans that are designed to create a strong alignment between Individual growth and Organization performance.

Wellness: Collective well-being

Your Company puts a happier, healthier and more productive workforce at the core of its business, policies and decisions. Your Company has designed

initiatives covering eight dimensions of wellness -Physical, Occupational, Emotional, Spiritual, Social, Environmental, Financial and Intellectual. The focus on preventative care with Corporate paid preventive health check, on-campus doctor consultations & counselling programs, helps employees diagnose any health condition in advance. To tackle IT industry specific issues, the Company organizes wellness sessions on Ergonomics, Healthy eating, Lifestyle management etc. Multiple tech-enabled wellness interventions like Kick the Butt (Smoking Cessation Program), Bend it like TechM (Guide to Ergonomics), Dump the Plump (Weight loss challenge) etc. have helped employees create healthier habits. Through the People Care program, managers are encouraged to show their human side and empower their team members to pursue collective well-being.

Communication: Building purpose

A robust communication process is at the heart of the Company’s vibrant culture. Employees are kept connected and informed through multiple media. Your Company’s 360-degree communication framework ensures employees have access to connect with leaders, peers and the external world. With publications, platforms, storytelling, campaigns, and connects, the organizational culture is shared with all. Your Company shares stories of diverse individuals achieving extraordinary things using structured formats like #RiseFromWithin. Leaders in the Company share not just business updates and success stories but personal anecdotes that reinforce the belief of a shared destiny.

Engagement: Hybrid connects

For an increasingly hybrid workplace, the Company has designed several virtual ‘water-cooler’ moments like All Hand Meets with CXO, Prime Time, Location Connects etc. along with family connects. Employees have platforms like MS Teams and Cisco WebEx for collaborative yet decentralized working. Your Company also organized on-ground engagement linked to TechM’s FIDE partnership for the Chess Olympiad. TechM CARES Action Planning workshops were also organized across different business units to implement changes based on employee feedback. Your Company also organized more than 1,200 engagement programs globally linked to Rise Refresh.

Rise Refresh: #TogetherWeRise

For more than a decade, the Rise philosophy has inspired employees from across the Mahindra Group to come to work and build something meaningful.

Since then, the world has changed with the rise of disruptive technologies, changing start-up ecosystem, climate change and recently, the pandemic. This is why, the Company has defined a new core purpose and brand pillars of Rise to simplify and sharpen its commitments. Your Company has leveraged every possible medium to ensure that this is communicated to all employees. From the conventional posters, communities, blogs, leader-bytes, microsite, quizzes and signatures route to the unconventional music, memes, WhatsApp stickers, GenZ lingo, podcast conversations and comic strips, Rise has touched the heart of every employee.

Diversity: Respecting Individuality

Your Company believes that respecting diversity and ensuring inclusion is fundamentally the right thing to do. It respects, embraces and celebrates the uniqueness of every individual. This also links back to the stated objective of the Company to be human-centered by encouraging associates to bring their most authentic selves to work. Your Company initiated the Maternity Assistance Program (MAP) to support employees who were on Maternity Leave in their transition back to work. The Company has also organized several Fireside chats featuring women with STEAM (Science, Technology, Engineering, Arts, Mathematics) roles to inspire others to grow in these fields. Through the ‘Restart’ Program, the Company aims to help Women IT Professionals restart their career after a break.

Recognition: Appreciation always

Your Company believes in appreciating, recognizing, and celebrating by building a culture where good work and behavior are appreciated. The Company has designed specialized recognition programs where rewards, tenure, performance, and contribution are celebrated, often with the loved ones of employees. The recognition program is centered around n = 1, that is, the individual at the heart of everything. A key part of personalizing recognition is to bring it to the desk of every employee. This is enabled by the KUDOS portal that offers recognition badges as well as redemption options for the points earned. Giving employees the ability to appreciate colleagues and sustained campaigns have led your Company to have an industry leading rewards penetration of ~74% including monetary and non-monetary recognition. Tenure is rewarded with personalized gifts for both the employee and their family members. Lastly, there are several organizational level awards for outstanding achievements like the ACE, STAR, Location Council and Spotlight awards.

HR Digitization: Experiencing technology

Your Company has revolutionized employee experience by deploying technology at different touchpoints of their lifecycle. Your Company continued its internal automation focus by using Robotic Process Automation for completing common workforce actions to reduce manual work. Your Company has also integrated HR Chatbot UVO and Technical Support Chatbot ATOM into MS Teams making it easier to perform workforce actions like leave applications, pending approvals, ticket registrations etc. Developing an "Attrition Prediction Model” has provided Your Company with an early warning system predicting the employees’ likelihood to quit, giving the Business HR team the ability to stage an intervention. The Company has also explored the use of Metaverse where three dimensional avatars interact in a virtual world to develop modules for hiring and on-boarding. Translating these experiences to mobile devices, the Company has developed ‘The Wheel of Life’ application as a self-coaching tool.

QUALITY

The Company continues its focus on quality and strives to exceed customer expectations at all times. During the year, it continued to strengthen the implementation of Quality systems and upgraded the processes/systems to comply with CMMI V 2.0 for both Development and Services and currently assessed for maturity level 5. Similarly it underwent various upgrade and re-certification audits for multiple standards during the year in order to meet client demands and enhance value delivery - successfully re-certified, ISO 9001:2015 (Quality Management System), ISO 20000-1:2018 (Information Technology Service Management System), ISO 27001:2013 (Information Security Management System), ISO 27701:2019 (Privacy Information Management System), TL9000 R 6.2/ R5.7 (Quality Management Systems for Tele Communications industry), ISO 13485:2016 (Quality Management Systems for medical devices - scope of certification limited to medical devices business within Tech Mahindra), AS9100 Rev D (Standard for Aerospace domain - scope of certification limited to the aerospace business within Tech Mahindra), ISO 17025:2017 - Laboratory Quality Management Systems for our device testing labs.

In addition to these, your Company also maintains its commitment to health, safety and environment by continually improving its processes in accordance with ISO 14001:2015 (Environmental Management System) and ISO 45001: 2018 (Occupational Health and Safety

Assessment Series) standards. Your Company is also certified on ISO 22301:2012 (Societal Security and Business Continuity Management System) and has a comprehensive Business Continuity and Disaster Recovery framework, to prevent potential business disruptions in the event of any disaster. It has processes that helped resume services to customer’s acceptable service levels. Automated Service Desk with SLAs for enabling business and Vulnerability Assessment and Penetration Testing Lab for secured corporate network operations are highlights that showcase the information security posture of the Organization.

Tech Mahindra (IT Division) has been assessed for the implementation of high maturity business excellence practices at Mahindra Group (Services Sector). It has been assessed at TMW Maturity Stage 7 (on scale of 1-10 stages) of Mahindra Business Excellence Framework - The Mahindra Way. These certifications are testimony of the robustness of business processes and at large, the quality culture imbibed in the organization.

Your Company has institutionalized the Deliverability Risk Assessment (DRA) practice - to assess the readiness and to identify risks at the beginning of the program, continued to strengthen the process for transforming Quality Assurance processes & delivery methods to adopt and strengthen Delivery excellence, Risk governance, and further enhance automation to enable quality delivery to the customer. Quality index which is a measure of quality of products and services delivery is institutionalized.

The Company is ensuring all these initiatives are in place, to ensure that it delivers as stated in its Quality Policy.

DIRECTORS

During the year under review, all Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Independent Directors have also given declaration of compliance with Rules 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014, with respect to their name appearing in the data bank of Independent Directors maintained by the Indian Institute of Corporate Affairs.

Pursuant to the provisions of Section 152(6)(c) of the Companies Act, 2013, Mr. Manoj Bhat, Director (DIN: 05205447) is liable to retire by rotation and being eligible offers himself for reappointment.

During the year under review, Ms. Penelope Fowler (DIN: 09591815) was appointed as Additional Director by the Board of Directors of the Company on May 13, 2022. She was further appointed as an Independent Director pursuant to the special resolution passed by the shareholders at the Annual General Meeting held on July 26, 2022 for a period of 5 years.

In view of the retirement of Mr. C. P Gurnani, Managing Director and CEO, the Board of Directors at its meeting held on June 15, 2023, based on the recommendation of the Nomination and Remuneration Committee approved the Appointment of Mr. Mohit Joshi, (DIN: 08339247) as Additional Director with effect from June 20, 2023 to hold office up to the date of ensuing Annual General Meeting. Further in order to ensure smooth transition into the role of Managing Director as Mr. C. P. Gurnani would retire on December 19, 2023, Mr. Mohit Joshi was also appointed as a Whole Time Director designated as Managing Director (Designate) and Key Managerial Personnel with effect from June 20, 2023 up to December 19, 2023 subject to the approval of the members of the Company and the Central Government.

The Board of Directors, based on the recommendation of Nomination and Remuneration Committee also approved the appointment of Mr. Mohit Joshi as Managing Director & Chief Executive Officer of the Company and Key Managerial Personnel under the Companies Act, 2013 from December 20, 2023 to June 19, 2028 (both days inclusive), subject to approval of the members of the Company and the Central Government.

The Board recommends the appointment of Mr. Manoj Bhat and Mr. Mohit Joshi to the Members at the ensuing Annual General Meeting. The brief profile of Mr. Manoj Bhat and Mr. Mohit Joshi is given in the Notice of the Annual General Meeting.

In terms of Regulation 24(1) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, Mr. T. N. Manoharan, Lead Independent Director of the Company has been appointed as Director on the Board of Tech Mahindra (Americas) Inc., a wholly

owned unlisted material subsidiary of the Company with effect from May 21, 2019.

In the opinion of the Board of Directors, the Independent Directors have relevant proficiency, expertise and experience.

FAMILIARISATION PROGRAMME

These programmes aim to provide insights into the Company to enable the Independent Directors to understand its business in depth and contribute significantly to the Company. The details of the program for familiarisation of the Independent Directors with the Company are available on its website and can be accessed at https://insights.techmahindra.com/ investors/tml-familarisation-progarmmes-for-IDs.pdf

The Board of Directors are regularly updated on changes in statutory provisions like amendments in Corporate Laws, SEBI Regulations, Taxation Laws and People related laws as applicable at the quarterly Board meetings. The Board members are also updated on the Risk universe applicable to the Company’s business. The MD & CEO of the Company had quarterly sessions with Board members sharing updates about the Company’s business strategy, operations and the key trends in the IT industry that are relevant to the Company. These updates help the Board members in keeping abreast of key changes and their impact on the Company. Further Subject Knowledge Experts from various fields are also invited to the meetings of the Board/Committees to appraise the Board Members of the latest developments in the IT and the business.

TRAINING

The Company has laid down a policy on the training of Independent Directors as part of its governance policies. The Senior Leadership of the Company periodically updates the Directors on regulatory changes, business strategy and operations.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Regulation 19 read with Schedule II, Part D of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has devised a policy on evaluating the performance of the Board of Directors, the Chairman, Committees, and Individual Directors. The evaluation process was carried out through a web-based portal. The summary of the evaluation reports

was presented to the respective Committees and the Board. The Directors had given positive feedback on the overall functioning of the Committees and the Board. The suggestions made by the Directors in the evaluation process have been suitably incorporated in the processes.

NUMBER OF MEETINGS OF THE BOARD

The Board met five times during the Financial Year 2022-23. The meeting details are provided in the Corporate Governance report that forms part of this Annual Report. The maximum interval between any two meetings did not exceed 120 days as prescribed in the Companies Act, 2013 and SEBI Listing Regulations.

COMMITTEES OF THE BOARD

As on March 31, 2023, the Board has constituted seven Committees, namely, Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk Management Committee, Corporate Social Responsibility Committee, Investment Committee and Securities Allotment Committee. The details of terms of reference of each Committee and the meetings held during the year are given in the Corporate Governance Report.

The Company has also formed Group Governance Council comprising of Board Members and Senior Management in terms of the SEBI Circular No. SEBI/ HO/CFD/CMD/CIR /P/2018/79 dated May 10, 2018, considering it has a large number of subsidiaries.

POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION

The Governance policies laid down by the Board of Directors of your Company include:

i. Policy on the appointment and removal of Directors, Key Managerial Personnel and Senior Management.

ii. Policy on remuneration to the Directors, Key Managerial Personnel and Senior Management and other Employees.

The extract of these two policies is provided in "Annexure III”.

The policies are available on the website of the Company and can be accessed at https://insights. techmahindra.com/investors/Governance-Policies-including-remuneration-to-Directors-KMPS.pdf

SUCCESSION PLAN

In accordance with the principles of transparency and consistency, your Company has adopted governance policies for appointments, remuneration and evaluation of its Board of Directors, Key Managerial Personnel & Senior Management. In line with these Governance policies, the Company has established a formal Succession Planning Program for Key Managerial Personnel across the organization. The Board evaluates all such plans at a regular interval and institutes a formal program for filling any such critical position. The Board evaluates both internal and external candidates for such positions along with the recommendations of the management. The Company also has a leadership development program where it identifies high potential managers, and trains them to take up the positions of higher responsibility. The Company has identified the second line of leadership, which provides stability to the business in case of contingencies.

KEY MANAGERIAL PERSONNEL (KMP)

Pursuant to provisions of Section 203 of the Companies Act, 2013, Mr. C. P. Gurnani, Managing Director & Chief Executive Officer, Mr. Milind Kulkarni, Chief Financial Officer (up to May 31, 2022), Mr. Rohit Anand, Chief Financial Officer (w.e.f. June 1, 2022) and Mr. Anil Khatri, Company Secretary & Compliance Officer were the Key Managerial Personnel of the Company during the year under review.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, your Directors, based on the representation(s) received from the Operating Management and after due enquiry, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and, reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for the year ended on that date;

iii. proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts have been prepared on a going concern basis;

v. they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

vi. the proper systems to ensure compliance with the provisions of all applicable laws are in place and are adequate and operating effectively.

DETAILS WITH RESPECT TO ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has internal financial controls which are adequate and were operating effectively. The controls are adequate for ensuring the orderly and efficient conduct of the business, including adherence to the Company’s policies, the safeguarding of assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records and timely preparation of reliable financial information.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / PROCEEDINGS

There are no significant and material orders passed by the regulators or courts or tribunal, impacting the going concern status and the Company’s operations in the future.

Further no application against the Company has been filed or is pending under the Insolvency and Bankruptcy Code, 2016, nor has the Company done any one-time settlement with any Bank or Financial institutions.

STATUTORY AUDITORS

The members, in the 35^th Annual General Meeting (AGM) held on July 26, 2022, appointed M/s. B S R & Co. LLP, Chartered Accountants, [ICAI Firm’s Registration No. 101248W/W- 100022] as the Statutory Auditors of the Company, to hold office for a further term of five consecutive years from the conclusion of the 35^th AGM of the Company held in

the Financial Year 2021-22 until the conclusion of the AGM of the Company for the Financial Year 2026-27 on such remuneration as may be determined by the Board of Directors.

There are no qualifications, reservations, adverse remarks or disclaimers made in the audit report for the Financial Year 2022-23.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies

(Appointment and Remuneration of Managerial

Personnel) Rules, 2014, the Company had appointed Makarand Lele & Co., Practicing Company

Secretary, Pune to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is available at "Annexure IV” to this report. There are no qualifications, reservations, adverse remarks or disclaimers made in the Secretarial Audit Report.

COMPLIANCE WITH SECRETARIAL

STANDARDS

The Company has complied with the applicable Secretarial Standards.

ANNUAL RETURN

Pursuant to the provisions of Section 92(3) read with Section 134(3) (a) of the Companies Act, 2013, the Annual Return in Form MGT-7 is available on the website of the Company and can be accessed at https://insights.techmahindra.com/investors/mgt-7.pdf

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

During the year, the Company has transferred the unclaimed dividends of '' 2,13,40,674 to the Investor Education and Protection Fund. Further, 2,26,700 corresponding shares on which dividends were unclaimed for seven consecutive years were transferred to the fund as per the requirements of the IEPF Rules. The Members are requested to check the details of the unpaid dividend on the website of the Company and claim their dividend to avoid the shares from being transferred to IEPF.

MANAGERIAL REMUNERATION

Disclosures of the ratio of the remuneration of each director to the median employee’s remuneration and other details as required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014 as amended from time to time, are provided as "Annexure V”. None of the Directors or the Managing Director & CEO of the Company received any remuneration or commission from Subsidiary Companies of your Company.

The details of remuneration paid to the Directors including the Managing Director & CEO of the Company are provided in the Corporate Governance Report.

PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Companies Act, 2013 ("the Act”) read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. However, pursuant to first proviso to Section 136(1) of the Act, this report is being sent to the Shareholders excluding the aforesaid information. Any shareholder interested in obtaining said information may write to the Company Secretary at the Registered Office / Corporate Office of the Company and the said information is open for inspection at the Registered Office of the Company.

POLICY ON PREVENTION OF SEXUAL HARASSMENT

Your Company has laid down the Prevention of Sexual Harassment (POSH) policy which is available on its website. The Company has zero tolerance on Sexual Harassment at workplace. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The status of complaints received under POSH and redressed by the POSH Committee of the Company, during the Financial Year under review, are given below:

a) Number of complaints received during the year - 74

b) Number of complaints redressed during the year - 73@

c) Number of complaints pending for redressal as on March 31, 2023 - 3

@ - Includes 2 complaints received during the previous year and redressed during the year.

There are focused campaigns on the POSH policy within the Company and awareness drives that

take place. Furthermore, employees are required to undertake a mandatory certification on POSH to sensitize themselves and strengthen their awareness.

EMPLOYEE STOCK OPTION SCHEMES

During the year under review, there were no material changes in the Employee Stock Option Schemes (ESOPs) of the Company and the Schemes are in compliance with the SEBI Regulations on ESOPs.

As per Regulation 14 of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, the details of the ESOPs are uploaded on the website of the Company and can be accessed at https://insights.techmahindra. com/investors/details-of-esops-fy-2022-23.pdf

CORPORATE GOVERNANCE

A report on Corporate Governance covering among others composition of the Board of Directors, details of meetings of the Board and Committees along with a certificate for compliance with the conditions of Corporate Governance in accordance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, issued by the Statutory Auditors of the Company, forms part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of your Company’s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)

SEBI, vide its circular dated May 10, 2021, made BRSR mandatory for the top 1,000 listed companies (by market capitalization) with effect from the FY 2022-23. The Company voluntarily published BRSR for the Financial year 2021-22. The BRSR Report for the year 2022-23 is enclosed as part of this Annual Report.

In addition to the BRSR, the Integrated Annual Report of the Company provides an insight on the various ESG initiatives adopted by the Company. The ESG disclosures have been independently assured by KPMG.

COST RECORDS

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities of the Company.

RISK MANAGEMENT

The Risk Management Committee of the Board of Directors devised a Risk Management Policy and guides the operating management to identify risks, analyze their probability and impact and prepare mitigation plans. It periodically reviews the Risk Management Framework & Enterprise Risk Register which is presented by the Chief Risk Officer. The Company identifies all potential risks viz. economic, business, currency, operations, climate, governance, finance, cyber, business continuity etc. and prepares a mitigation plan for each of the risks. The elements of risk as identified by the Company with the impact and mitigation strategy are set out in the Management Discussion and Analysis Report.

ESTABLISHMENT OF VIGIL MECHANISM

The Company has laid down Whistle Blower Policy covering Vigil Mechanism with protective clauses for the Whistle Blowers. The Whistle Blower Policy is made available on the website of the Company.

DEPOSITS / LOANS & ADVANCES, GUARANTEES OR INVESTMENTS

The Company has not accepted any deposits from the public during the year under review. The particulars of loans/advances, guarantees and investments under Section 186 of the Companies Act, 2013 are given in the notes forming part of the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All transactions entered with Related Parties as defined under Section 2(76) of the Companies Act, 2013 and Regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, ("The Listing Regulations”), during the financial year under review were in the ordinary course of business and at an arm’s length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no transactions with related parties in the Financial Year which conflicted with the interest of the Company and required compliance of the provisions of Regulation 23 of the Listing Regulations.

Suitable disclosure as required by the Indian Accounting Standards (Ind AS 24) has been made in the notes forming part of the Financial Statements.

The Company has formulated a policy on the Related Party Transactions and dealing with Related Party Transactions which has been uploaded on the website of the Company and can be accessed at https:// insights.techmahindra.com/investors/Related-Party-Transactions-Policy.pdf

The particulars of related party transactions in prescribed Form AOC - 2 are attached as ‘Annexure VI”. Pursuant to Regulation 23(9) of the Listing Regulations, your Company has filed half yearly report on Related Party Transactions with the stock exchanges.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are provided in "Annexure VII” which forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY

The CSR vision of the Company is "Empowerment through Education.”

In compliance with the guidelines prescribed under Section 135 of the Companies Act, 2013, your Company has constituted a Corporate Social Responsibility (CSR) Committee of the Board. The CSR policy, covering the Objectives, Focus Areas, Governance Structure Monitoring and Reporting Framework among others is approved by the Board of Directors. In accordance with the amendments made in Section 135 in January 2021, the CSR Policy has been duly revised and is available on the website of the Company and can be accessed at https://insights. techmahindra.com/investors/tml-csr-policy-23.pdf

The Company has spent more than 2% of the average net profits of the Company during the three immediately preceding Financial Years on CSR.

The Company’s social initiatives are mainly carried out by Tech Mahindra Foundation and Mahindra Educational Institutions, Section 8 (erstwhile Section 25) Companies promoted by the Company.

TECH MAHINDRA FOUNDATION (TMF) EDUCATION

The key initiatives taken by TMF in the arena of school education include:

ALL ROUND IMPROVEMENT IN SCHOOL EDUCATION (ARISE)

Tech Mahindra Foundation’s educational initiatives under ARISE are long-term school improvement programmes, in partnership with local governments and partner organisations. The Foundation in 2022-23 worked with 18 government primary & secondary schools to transform them into model schools of excellence. A total of 5,224 students were positively impacted under this programme, of which 2,832 were girls.

During the year, the Foundation expanded its work for children with special needs through its ARISE programme. This programme is a variant of ARISE in which children with special needs are provided chronic therapy as well as special education to help them lead more fulfilling lives. Through 32 projects, the programme enabled 4,829 children with special needs to become better learners with greater independence in managing their lives. The Foundation has taken up the provision of assistive technology for these children as an important value addition to its work in ARISE .

SHIKSHAANTAR

Shikshaantar, envisioned as a programme for enhancing the capacity of government school teachers, has emerged as an important programme in the education portfolio of the Foundation. TMF works with the Municipal Corporation of Delhi by running their In-Service Teacher Education Institutes. With the merger of the MCDs, TMF now has the responsibility of training teachers from close to 1,500 primary schools in Delhi. During the year under review, as many as 4,379 teachers were trained as part of Shikshaantar. This included specially designed modules for Digital Literacy, Child Safety, Cyber Security and Mental Health that were delivered to the teachers in a hybrid mode.

MOBILE SCIENCE LAB & ROBOTICS LAB

In order to increase the footprint of its work in Education and reach the unreached, TMF launched a unique initiative in 2019-20 - The Mobile Science Lab (MSL). For this, a Mahindra bus has been remodeled to become a science lab on wheels and has been travelling from school to school in East Delhi to provide STEM learning for children in grades 3 and 4 in these

schools. The MSL program benefitted as many as 6,861 students and 77 teachers throughout the year.

Following the success of the MSL program, TMF has also set up a Robotics Lab at one of its ARISE schools in Delhi which is an all-girls school. This lab was inaugurated in November 2022, and nearly 300 girls from this school are the potential beneficiaries.

EMPLOYABILITY

Skills-for-Market Training (SMART) is the Foundation’s flagship programme in employability. It is built on the vision of an educated, enabled and empowered India, and the belief that educated and skilled youth are the country’s true strength. The programme started with 3 Centres in 2012 and is currently running over 85 Centres at 10 locations across India. These include SMART Centres, SMART Centres (training for people with disabilities), and SMART-T Centres (training in technical trades).

In 2022-23, your Company trained 17,641 young women and men under its SMART program, of which, 1,303 were persons with disabilities. More than 70% of the graduates are placed in jobs across multiple industries upon successful completion of the training. The average salaries being earned by the graduates of the SMART program have been steadily rising and saw a 10% jump over the previous year.

The Foundation’s commitment to setting new benchmarks in skill development in India has been underscored by the setting up of Tech Mahindra SMART Academies, which provide the highest quality of skill training to youngsters in Healthcare and Digital Technologies. During FY 2022-23, 3,584 students were trained at the nine Academies that are now functional - 5 in Healthcare, 3 in Digital Technologies, and 1 in Logistics.

TMF’S OUTREACH INITIATIVES

In addition to all the core programs described above, Tech Mahindra Foundation is now also implementing several outreach projects in collaboration with various agencies. As part of these, the TMF team members are engaged in activities such as community health initiatives, teacher training, provision of content for other large-scale projects, etc. As part of such outreach projects, TMF supported 20,734 beneficiaries, taking the total tally of direct beneficiaries for the year to 61,995. This is nearly 50% more than the number of direct beneficiaries for FY 2021-22, which stood at 41,374.

MAHINDRA EDUCATIONAL INSTITUTIONS (MEI)

MEI - a not-for-profit, 100% subsidiary of the Company has set up Mahindra Ecole Centrale in August 2014 - through a collaborative venture between Mahindra Educational Institutions and Ecole Centrale of Paris, France (now known as Centrale Supelec) and the JNTU Hyderabad - to offer undergraduate engineering programs. Through this strong Indo-French Collaboration with Centrale Supelec and Industry connect with Tech Mahindra, MEC has emerged as a disruptive player in the field of Technical Education.

MEI has sponsored the setting up of Mahindra University to introduce diverse streams of education in addition to Engineering. Further the Engineering stream is being transitioned to Mahindra University.

MAHINDRA UNIVERSITY (MU)

Mahindra University ("MU”) (sponsored by Mahindra Educational Institutions, ("MEI”) - a not-for-profit, 100% subsidiary of Tech Mahindra), was notified on May 20, 2020 by the Government of Telangana vide The Telangana State Private Universities (Establishment and Regulation) Act, 2018 for "educating future citizens for and of a better world”.

The Ecole Centrale School of Engineering (ECSoE) currently runs various UG, PG and Ph.D. programs in cutting-edge engineering departments. ECSoE also launched a Centre for Life Sciences and offers courses in biotechnology and computational biology under it. The school plans to launch the 2.5 year integrated programs in Biotechnology & CSE for AY 2023-24.

Cornell University’s SC Johnson College of Business, an ivy league institution is the "Academic Partner” for School of Management. Mahindra University’s School of Management (MU - SoM) will benefit significantly from Cornell University’s expertise in curriculum development, faculty exchange programs including some specialty courses delivery by the Cornell faculty to Mahindra University students, as well as student immersion at Cornell. The School of Management currently conducts BBA, BA, E-MBA, and MBA (starting in 2023) programs.

The School of Law, Mahindra University, commenced operations in September 2021 in Hyderabad offering 5-year integrated programs in BA LL.B and BBA LL.B. It was founded on the philosophy of securing justice, equality, and service to all sections of society. With the needs of modern society evolving rapidly, there is a renewed focus on the importance of the discipline of

law. The School of Law will aim to make a difference to the legal profession and practice by providing a diverse, flexible curriculum and pedagogy, touching on several aspects of domestic and international law, while appraising the students of the latest trends in academia and practice. Starting 2022, the School of Law has launched a 3-year LLB (Hons) program and intend to launch a 6-year integrated B.Tech LLB course starting Academic Year 2023.

The University also plans to launch the following programs/schools for the Academic Year 2023-24:

1. School of Media

a. 4-year B.Tech. (Computation & Media)

b. 3-year BA (Digital Media & Communication)

2. School of Hotel Management

a. 3-year B.Sc. (Hospitality & Hotel Administration)

In the academic year 2022, a total of 2,971 students were studying under various programs across all schools and departments. The new admissions for academic year 2022 are 1,236 students of which 1,128 students are in various UG programs, including School of Management and School of Law, 22 students in the PG programs of School of Engineering and 86 students in the Ph.D programs across all the schools.

The Annual Report on CSR activities is provided as "Annexure VIII”.

SUSTAINABILITY

Your Company aligns closely with the Mahindra Group’s ambition to Rise: Be People positive, Planet positive, and Trust positive. The Company holistically embraces ever greater responsibility towards protecting the environment, empowering the society, and providing good governance.

Your Company’s strategy for creating long-term sustainable value is by improving, scaling, and transparently communicating our ecological, social, and economic impacts. Our strong governance framework led by the Board of Directors of your Company, who have oversight of the Company’s overall strategy and future direction and ensures the planning and implementation of environmental and social programs.

The Company’s holistic approach enables to drive sustainable impact in alignment with leading global frameworks, initiatives, and agendas committed to furthering sustainability such as the TCFD, SASB, GRI, as well as the Paris Agreement, the UNGC and the UN SDGs.

As a business, the Company recognizes the value of following the UN SDGs (Sustainable Development Goals) of People, Planet, Prosperity, and Partnership and continues to create value through initiatives that cater directly to these aspects of our performance.

People:

• Great place to work: Working to enhance our organizational culture by enabling our associates with access to advanced technologies, providing Learning & Development opportunities to help develop their skills and areas of expertise and providing them with robust career development programmes.

• Work-life balance: Providing feasible and flexible work-life balance and integration along with a range of associate-friendly policies and processes to reduce attrition.

• Diversity and inclusion: Ensuring that our organization continues to transcend into the realms of gender diversity and includes people with disabilities as well as people from the LGBTQIA community as part of being a socially responsible business.

• Employee engagement & recognition:

Ensuring our associates are engaged, feel valued, and recognized through a robust performance management system, a flexible system of working, and an extensive system of benefits and perquisites.

• Individual Social Responsibility: Encouraging associates to contribute to the society & environment and make these activities an integral part of their day-to-day activities.

Planet:

• Carbon neutrality and Net zero: Committing to carbon neutrality (2030) and Net zero (2035) by switching to renewable energy through on site installations and open access; improving energy efficiency through installation of LEDs, sensors; boosting green investments by

implementing Carbon Price; optimizing business travel by enabling virtual meetings; encouraging use of public transport and carpooling to reduce employee commute emissions; carbon sequestration through tree plantation; moving towards a low carbon economy by optimizing operations to ensure environmental protection.

• No waste to landfill: Installing Organic Waste Converters and vermicomposting plants at own campuses to convert food waste to manure, cutting down their transportation emissions and reducing waste to landfill.

• No to plastic: Maintaining plastic-free campuses and encouraging all stakeholders to use ecofriendly and biodegradable materials. Spreading awareness and initiating campaigns on preventing single-use plastic.

• Reduce, Reuse, Recycle, Recover: Implementing the process of Reduce, Reuse, Recycle and Recover across the value chain to limit waste and enable a circular economy.

• Being water positive: Improving water efficiency and increasing water savings by using water sensors, restrictors and water-efficient coolers, recycling wastewater through STPs, and recharging groundwater levels with Rainwater Harvesting Pits.

• Promoting Biodiversity: Protecting local flora and fauna across all our locations to ensure that we do not adversely impact biodiversity through our operations.

Prosperity:

• Innovation: Embracing technology and innovation by incorporating IoT, Blockchain, AI and Machine Learning to develop a portfolio of sustainable solutions that help reduce emissions and other negative impacts of climate change.

• Green solutions: Investing in Sustainability reporting solution (i.Sustain) and Climate Risk Management platforms, Smart grid, Microgrid-As-A-Service, Community Action Platform for Energy, Integrated Electric Vehicle Charging systems (IEVCS), Smart data hubs and Smart Cities for our Customers to reduce their carbon emissions.

• Connecting with customers: Embracing brand equity by connecting with our customers to address their current and future needs and ensuring customer satisfaction.

Partnership

• Learning and Sharing: Partnering with collaborators & partner companies to create an alliance ecosystem and supplement each other’s capabilities on joint projects. Collaborating with academia, businesses, NGOs, and governments to address some of the global challenges like health care, climate change, inequality, etc.

• Sustainable supply chain: Ensuring that we are in synch with our value chain in our commitment towards climate action and helping our suppliers follow the highest standards of sustainable and ethical best practices within their own organizations.

Tech Mahindra has drafted its Integrated Annual report in accordance with Global Reporting standards and frameworks with the data assured by a third party thus complying with the highest transparency standards.

The Company’s progress against the sustainability targets and metrics are disclosed in the externally assured Integrated reports available on the website of the company- https://www.techmahindra.com/en-in/ sustainability/

AWARDS AND RECOGNITION

Your Company continued its quest for excellence in its chosen area of business to emerge as a true global brand. Several awards and rankings continue to endorse your Company as a thought leader in the industry. A few of the prominent Awards / recognitions received by the Company during the Financial Year 2022-23 include:

• Tech Mahindra won several medals in the USA for its people practices- Brandon Hall HCM Excellence Awards, Stevie Awards for Great Employers and was also included in the 2023 Bloomberg Gender-Equality Index (GEI).

• Tech Mahindra Philippines was certified as a Great Place to Work.

• The Economic Times bestowed Tech Mahindra with several recognitions including Great Manager Awards (People Business), Human Capital Awards and ‘Best Organizations for Women’ (Femina).

• Tech Mahindra was also recognized by Avtar and Seramount as "Champions” in Most Inclusive Companies Index and "Top 10” in Best Companies for Women in India.

• Dun & Bradstreet India recognized Tech Mahindra as a top performer in the ESG Performance -Software and BPM sector.

• Tech Mahindra won Frost & Sullivan’s Technology Innovation Leadership Award 2022 for Metaverse Technology Services.

• Tech Mahindra was recognized among the Iconic brands at ET Iconic Brands 2022.

• TechM amplifAI0->^ is awarded "Cool Product or Service of the Year in Business 2022.” at the 12^th Annual 2022 Business Excellence Awards by Globee® Business Awards.

• Tech Mahindra MEA was recognized for Ground-breaking products/services in Ecommerce at GITEX.

• Tech Mahindra was awarded ‘A’ rating in MSCI ESG ratings 2022.

• Tech Mahindra received the "Mahatma Award 2022 for Social Good & Impact - Decent Work and Economic Growth” for its SMART Program.

These awards are a reflection of the Company’s continued efforts in the fields of business, sustainability, human resource management and its sustained progress towards creating a better society for all.

ACKNOWLEDGEMENTS

Your directors place on records their appreciation for the contributions made by employees towards the success of your Company. Your directors gratefully acknowledge the co-operation and support received from the shareholders, customers, vendors, bankers, Regulatory and Governmental authorities in India and abroad.

For and on behalf of the Board

Anand G. Mahindra Place: Mumbai Chairman

Date: 15^th June, 2023 (DIN: 00004695)

Note: The Board of Directors at its meeting held on April 27, 2023, had approved the financial statements for the financial year 2023 and the Director''s Report along with the Annexures. However, in view of the appointment of Mr. Mohit Joshi as Additional Director and Whole Time Director, the revised Director''s Report was approved by the Board at its Meeting held on June 15, 2023.

1

Interim Dividend (Special Dividend) for the Financial Year ended March 31, 2022 and Final Dividend for the Financial Year ended March 31, 2021

---

Mar 31, 2022

The Directors present their Report together with the audited financial statements of your Company for the year ended 31^st March, 2022.

A. FINANCIAL AND OPERATIONAL HIGHLIGHTS
(Rs. in crores
Particulars	2022	2021
Revenue from Operations..............................	57,446	44,630
Other Income..................................................	2,076	1,199
Profit before Depreciation, Finance Costs, Exceptional items and Taxation.....................	9,118	8,157
Less: Depreciation, Amortisation and Impairment Expenses............................	2,451	2,370
Profit before Finance Costs, Exceptional items and Taxation .........................................	6,667	5,787
Less: Finance Costs..........................................	223	396
Profit before Exceptional items and Taxation...	6,444	5,391
Add: Exceptional items...................................	(209)	(3,087)
Profit before Taxation....................................	6,235	2,304
Less: Tax Expense............................................	1,300	1,320
Profit for the year...........................................	4,935	984
Balance of profit for earlier years.................	29,464	29,102
Less: Transfer to Retained Earnings..............	—	(20)
Profits available for appropriation................	34,399	30,106
Add: Due to Scheme of Arrangement..........	—	(294)
Add: Other Comprehensive Income/(Loss)* ..	102	(56)
Less: Dividend paid on Equity Shares............	1,088	292
Balance carried forward.................................	33,413	29,464

* Remeasurement of (loss)/gain (net) on defined benefit plans, recognised as part of retained earnings.

The Financial Year 2022 will go down in India''s economic history as an unprecedented one with huge gyrations in fortune. The second wave of the pandemic hit lives hard and was way more vicious than the first one. Yet, it was not about Covid in spite of the second wave, it was more about hope and recovery as India successfully navigated its course through turbulent waters. As the wave receded, there was a dramatic surge in the pace of vaccination and India was able to vaccinate most of its eligible population rapidly. Concomitantly, there was

a rebound in growth as evidenced from high frequency indicators. However, the enthusiasm was disrupted by the third wave of the pandemic which fortunately proved to be less vicious and short lived.

The Union Budget doubled down on the investment-oriented strategy focussing on capital expenditure to kickstart a "virtuous cycle of investment" while crowding in private investments. However, by the end of February, global risk-off sentiments gathered steam and geopolitical risks came to the fore from the war in Ukraine. The return of uncertainty clouded the global macroeconomic and financial landscape even as the global economy struggled to recover from the pandemic.

The Indian economy is estimated to have grown by 8.9% during the Financial Year 2022 aided by a favourable base but the economic recovery across the Sectors was uneven. Private consumption and fixed investment -key drivers of domestic demand remained subdued being only 1.2% and 2.6% respectively, above their pre-pandemic levels.

The Profit for the year before Depreciation, Finance Costs, Exceptional items and Taxation recorded an increase of 11.8% at Rs. 9,118 crores as against Rs. 8,157 crores in the previous year. Profit after tax increased by 401.5% at Rs. 4,935 crores as against Rs. 984 crores in the previous year.

Your Company continues with its rigorous cost restructuring exercises and efficiency improvements which have resulted in significant savings through continued focus on cost controls, process efficiencies and product innovations that exceed customer expectations in all areas thereby enabling the Company to maintain profitable growth in the current economic scenario.

Details of Material Changes from the end of the Financial Year till the date of this Report

No material changes and commitments have occurred after the closure of the Financial Year 2021-22 till the date of this Report, which would affect the financial position of your Company.

Performance Review

Automotive Sector

Your Company''s Automotive Sector posted total sales of 4,55,570 vehicles (4,35,086 Passenger vehicles, commercial vehicles and 20,484 three-wheelers) as against a total of 3,48,621 vehicles (3,31,384 four-wheelers and 17,237 three-wheelers) in the previous year, registering a growth of 30.7%.

In the domestic market, your Company sold a total of 4,23,143 vehicles as compared to 3,30,271 vehicles in the previous year, resulting in a growth of 28.1%.

In the Passenger Vehicle (PV) segment, your Company sold 2,25,895 vehicles [including 2,23,682 Utility Vehicles (UVs), 2,154 Vans and 59 Cars] registering a growth of 43.7%, as compared to the previous year''s volume of 1,57,215 vehicles [including 1,55,530 UVs, 1,676 Vans and 9 Cars].

In the Commercial Vehicle (CV) segment, your Company sold 1,77,117 vehicles [including 32,039 vehicles <2T GVW, 1,38,643 vehicles between 2-3.5T GVW, 1,891 Light Commercial Vehicles (LCVs) in the LCV > 3.5T segment, 1,135 vehicles in the 7.5-16.2T GVW segment and 3,409 Heavy Commercial Vehicles (HCVs)] registering a growth of 13.4% over the previous year''s volume of 1,56,159 vehicles [including 23,789 vehicles < 2T GVW, 1,28,100 vehicles between 2-3.5T GVW, 1,160 LCVs in the LCV > 3.5T segment, 684 vehicles in the 7.5-16.2T GVW segment and 2,426 HCVs].

In the three-wheeler segment, your Company sold 20,131 three-wheelers, registering a growth of 19.1% over the previous year''s volume of 16,897 three-wheelers.

For the year under review, the Indian automotive industry (except 2W) grew by 15.7%, with the PV industry growth of 13.2% and CV industry growth of 26%. The UV segment showed growth by 40.4%. Within the CV industry, the LCV goods <3.5T segment grew by 15.8% while the MHCV goods segment grew by 49.2%.

Your Company''s UV volumes stood at 2,23,682 units, a growth of 43.8%. The UV market share for your Company stood at 15%. For the year under review, the All New Mahindra-XUV700 launched in August 2021, performed well in the UV segment with a volume of 26,261 units for the Financial Year 2022. It garnered cumulative 50,000 bookings within a 3-hour booking window (spread over 2 days). Thar, Scorpio, XUV300 and Bolero continued to be strong brands for your Company in the UV segment.

In the LCV<3.5T segment, your Company retained its No.1 position with 40.3% market share. Your Company sold a total of 1,70,682 vehicles in this segment. Your Company has a market share of 55% in the LCV 2-3.5T segment, which is the Pickup segment.

In the Medium and Heavy Commercial Segment (MHCV), your Company sold 4,544 trucks as against 3,110 in the previous year. This is a growth of 46.1%. Your Company''s market share in the MHCV segment stands at 2%.

Your Company is the pioneer for Electric Vehicles (EVs) in India, and for the year under review, sold (along with its subsidiary Mahindra Electric Mobility Limited) 17,006 EVs as against 5,418 EVs in the previous year.

During the year under review, your Company posted an export volume of 32,427 vehicles as against the previous year''s exports of 18,350 vehicles. This is a growth of 76.7%.

The spare parts sales for the year stood at Rs. 2,859.2 crores (including exports of Rs. 235.2 crores) as compared to Rs. 2,165.3 crores (including exports of Rs. 133.5 crores) in the previous year, registering a growth of 32%.

Farm Equipment Sector

Your Company''s Farm Equipment Sector recorded total sales of 3,54,698 tractors (domestic export) as against 3,54,498 tractors sold in the previous year. These figures for the current year sales and previous year sales include tractors sold under the Trakstar brand, which is the third brand of your Company under the subsidiary Gromax Agri Equipment Limited.

For the year under review, the tractor industry in India recorded sales of 8,42,266 tractors, a de-growth of 6.4%. Tractor Industry recorded de-growth in Financial Year 2022 from a high base of highest ever sales in Financial Year 2021.

In the domestic market, your Company sold 3,37,052 tractors, as compared to 3,43,833 tractors in the previous year (these figures for the current year sales and previous year sales include tractors sold by Gromax Agri Equipment Limited), recording a de-growth of 2%. It is the second highest ever volume sold by your Company. With market share at 40%, a gain of 1.8% over previous year, the Company continues to be the market leader for the 39^th consecutive year. Your Company''s performance was supported by good performance of all products in the portfolio.

Your Company continues to focus on growing the farm mechanisation space, by offering affordable mechanisation solutions. The portfolio comprises of

Rotavators, Cultivators, Harvesters, Rice transplanters, Balers and Sprayers.

For the year under review, your Company exported 17,646 tractors which is a growth of 65.5% over the previous year.

Spare parts net sales for the year stood at Rs. 917 crores (including exports of Rs. 81 crores) in Financial Year 2022 as compared to Rs. 758.2 crores (including exports of Rs. 48.8 crores) in the previous Financial Year 2021, registering a growth of 20.9%.

Other Businesses

Powerol

Under the Powerol brand, your Company has been a leader in providing power back-up solutions to the telecom industry for more than 14 years. Your Company continues to consolidate its presence in the tele-infra management space. Alongside the Telecom, Powerol has been increasing the Retail market share, especially with the extension in HkVA range. With the introduction of the BS IV range of engines, Powerol has introduced 21 new nodes for various industrial applications.

Powerol stands at No. 2 brand by volume in the overall Diesel Genset power back-up segment.

Powerol''s move towards sustainability has led to the introduction of the Gas Powered gensets with introduction of 5 nodes between 15 kVA to 315 kVA. They offer lower operating costs and low emissions complying to the new emission norms.

Construction Equipment

For the year under review, your Company (under the Mahindra EarthMaster brand) sold 729 Backhoe Loaders (BHLs) against 681 in Financial Year 2020-21, which is a growth of 7%. Your Company also has a presence in the road construction equipment business through motor graders (under the Mahindra RoadMaster brand).

For the year under review, your Company sold 117 motor graders, as against 82 in Financial Year 2020-21 which is a growth of 42.7%. The BHL industry de-grew by 31% due to transition from BS3 to BS4 and commodity inflation. The Grader industry has grown by 14% with increased focus on the infrastructure development push by the Government of India.

Your Company has presence in Sugar Cane Haulage (under Mahindra Haul Master Brand) in Kenya. This is a new product which is added to the portfolio. For the year under review, your Company sold 105 Haulage tractors.

Two-Wheeler Business

In line with the strategy for the two-wheeler business, your Company through its subsidiary, Classic Legends Private Limited had reintroduced the iconic brand ''Jawa'' to the Indian market in the Financial Year 2019, with the launch of new range of JAWA motorcycles - Jawa and Jawa Forty-Two. A new addition to portfolio - Yezdi was launched in the Financial Year 2021-22.

Launch of Non-Fungible Tokens (NFTs)

The launch of NFTs is another step taken by your Company to leverage the next frontier of digital marketing. With the release of its first tranche of tokens, it became the first Indian automotive original equipment manufacturer to enter the universe of NFTs.

Current Year’s review

During the period 1^st April, 2022 to 27^th May, 2022, 90,899 vehicles were produced as against 54,903 vehicles and 79,739 vehicles were dispatched as against 49,117 vehicles during the corresponding period in the last year. During the same period 64,447 tractors were produced and 64,180 tractors dispatched as against 55,904 tractors produced and 55,682 tractors dispatched during the corresponding period in the previous year.

The tectonic shifts beginning 24^th February, with the commencement of war in Ukraine, followed by sanctions and escalating geopolitical tensions have cast a shadow on the pace of global recovery. Medium-term global growth is expected to decline to about 3%, compared to an average of 4.1% in the period from 2004 to 2013, and growth of 6.1% in 2021 as per the IMF. It has pared its expectation of global economic activity to slow with a projection of a 3.6% growth in 2022.

The global economy is staring at fractures in the international financial architecture and accentuation of shortage in key commodities will add to the inflationary pressures throughout 2022 with a projection of 5.7% in advanced economies and 8.7% in emerging economies. Global central banks across the world, look set to tighten monetary policy conditions in a bid to counter the growing inflationary pressures even if it leads to some sacrifice of growth.

Financial market volatility caused by monetary policy normalisation in advanced economies, geo-political backdrop, higher oil and commodity prices and renewed wave of COVID-19 pose a challenging backdrop in Financial Year 2023. Infections with augmented supply-side disruptions and protracted shortages of critical

prices across the board and elevated risk aversion and uncertainty owing to geopolitical developments weigh heavily on the outlook.

However, amidst this backdrop, the Bankers continue to rate your Company as a prime customer and extend facilities/services at prime rates. Your Company follows a prudent financial policy and aims not to exceed an optimum financial gearing at any time. The Company''s gross Debt to Equity Ratio is 0.17 as at 31^st March, 2022.

During the year, your Company continued to focus on managing cash efficiently and ensured that it had adequate liquidity and back up lines of credit. During the year, your Company raised short term borrowings of Rs. 1,000 crores by issuing Commercial Papers. This ensured sufficient liquidity to manage the adverse effects of pandemic, if any. Further, during the year, your Company repaid Rs. 2,233.75 crores of the total borrowings (long term and short term). With a high liquidity level of Rs. 11,552.59 crores as at 31^st March, 2022, your Company is better placed to tide over the impact of the re-surge in COVID-19 cases on the business, if any.

Further, your Company has been rated by CRISIL Limited ("CRISIL"), ICRA Limited ("ICRA"), India Ratings and Research Private Limited ("India Ratings") and CARE Ratings Limited ("CARE") for its Banking facilities. All have re-affirmed the highest credit rating for your Company''s Short Term facilities. For Long Term facilities and Non-Convertible Debentures, CRISIL, ICRA and India Ratings have re-affirmed their credit ratings of CRISIL AAA/Stable, [ICRA]AAA (stable) and IND AAA/Stable for the respective facilities rated by them. With the above rating affirmations, your Company continues to enjoy the highest level of rating from all major rating agencies at the same time.

The AAA ratings indicate highest degree of safety regarding timely servicing of financial obligations and is also a vote of confidence reposed in your Company''s Management by the rating agencies. It is an acknowledgement of the strong credit profile of your Company over the years, resilience in earnings despite cyclical upturns/downturns, robust financial flexibility arising from the significant market value of its holdings and prudent management.

Your Company is a "Large Corporate" as per the criteria under Securities and Exchange Board of India ("SEBI") Operational Circular No. SEBI/HO/DDHS/P/CIR/2021/613 dated 10^th August, 2021. The Company has complied with the provisions of the said Circular and has made required disclosures in this regard.

 

inputs, such as semi-conductors and chips, pose downside risks to the outlook. Yet, India remains relatively better positioned to weather these storms and is estimated to grow at 7.2% in the Financial Year 2023 - the fastest growth rate among peers and economies of its size.

While fiscal and monetary policies were supportive of India''s growth recovery thus far, the Reserve Bank of India has begun the process of normalisation of monetary policy by raising the policy repo rate as well as the cash reserve ratio. However, an avowed fiscal policy focus on capital expenditure that has significantly higher multipliers than other forms of spending will fuel durable growth over the medium to long term. Importantly, forecasts of the fourth successive ''normal'' Monsoon, higher vaccination coverage and seropositivity in the community provide higher margin of safety around growth in the year ahead.

Finance

Reeling under the jaws of an unprecedented Financial Year 2020-21, caused due to outbreak of COVID-19 severely impacting human lives, global trade and commerce, Financial Year 2021-22 saw the financial markets grappling with the Delta variant of COVID-19, choked supplies, escalating geo-political tensions, inflationary pressures, mounting commodity prices and volatility that came together as a perfect storm.

Emerging economies experienced disruptive spillovers in terms of tightening financial market conditions, besides capital outflows and currency depreciations. Given these unsettled conditions, investors sporadically sought shelter of safe-haven assets alternating between phases of risk-on activity with every positive news being priced in. Consequently, financial markets were on the edge, like never before.

Having said the above, the domestic economy experienced tremors from these developments. Economic activity, which gained slight traction in Q2:2021-22 (July-September) with the ebbing of the second wave experienced during Q1:2021-22 (April-June), has lost pace since Q3:2021-22 (October-December), exacerbated by the spread of the Omicron variant in Q4:2021-22 (January-March). Further, the beneficial effects of the rapid ebb of infections have, however, been overwhelmed by the geopolitical tensions towards the later part of the financial year. The fallout of the Russia-Ukraine conflict and retaliatory sanctions is already evident in the inflation prints. While India''s direct trade and financial exposures are modest, indirect spillovers from the slowing global economy, the sharp jump in commodity

those Shareholders whose names appear in the Register of Members as on the Book Closure Date. The Board of your Company decided not to transfer any amount to the General Reserve for the year under review.

Dividend Distribution Policy

The Dividend Distribution Policy containing the requirements mentioned in Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") is attached as Annexure I and forms part of this Annual Report.

The Dividend Distribution Policy of the Company is also uploaded on the Company''s website at the following Web-link: http://www.mahindra.com/resources/investor-reports/FY17/Governance/MM-Dividend-Distribution-Policy-29-9-2016-Final.pdf.

The Consolidated Financial Statements of the Company, its subsidiaries, associates and joint ventures prepared in accordance with the Companies Act, 2013 and applicable Indian Accounting Standards along with all relevant documents and the Auditors'' Report form part of this Annual Report. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies, associates and joint ventures.

The Consolidated Group''s Operating Revenue from continuing operations is Rs. 90,171 crores in the current year as compared to Rs. 74,278 crores in the previous year i.e. an increase of 21.4%.

The consolidated profit before exceptional items and tax for the year from continuing operations is Rs. 7,092 crores as against Rs. 5,229 crores in the previous year i.e. an increase of 35.6%. The consolidated profit after tax after non-controlling interest and exceptional items for the year from continuing operations is Rs. 6,577 crores as against Rs. 3,347 crores in the previous year i.e. an increase of 96.5%.

The consolidated profit after tax after noncontrolling interest and exceptional items for the year from continuing and discontinued operations is Rs. 6,577 crores as against Rs. 1,812 crores in the previous year i.e. an increase of 263%.

The Financial Statements as stated above are also available on the website of the Company and can be accessed at the Web-link: https://www.mahindra.com/ resources/FY22/AnnualReport.zip.

Investor Relations (IR)

Your Company always believes in leading from the front with emerging best practices in IR and building a relationship of mutual understanding with domestic and foreign investors/analysts. In the Financial Year 2022, the year characterised by a lot of uncertainty amongst pandemic and lockdowns, your Company increased its interaction with investors through video and audio conference calls. The top management, including the Managing Director & CEO, Executive Director-Automotive & Farm Sectors and Group CFO, spent significant time to interact with investors to communicate the strategic direction of the business, capital allocation policy and the way the Company was handling COVID-19 crisis. All the four quarterly earnings calls conducted during the year were also well attended by investors and analysts.

During the year, your Company interacted with more than 600 Indian and overseas investors and analysts (excluding quarterly earnings calls and specific event related calls). Your Company ensures that critical information about the Company is available to all the investors by uploading all such information on the Company''s website.

Your Company also engages with investors on Environment, Social and Corporate Governance (ESG), which has received excellent feedback from investors and ESG analysts.

Dividend

As per the Dividend Distribution Policy, dividend payout would have to be determined based on available financial resources, investment requirements and taking into account optimal shareholder return. Within these parameters, the Company would endeavour to maintain a total dividend pay-out ratio in the range of 20% to 35% of the annual standalone Profits after Tax (PAT) of the Company.

Despite the impact of the pandemic, your Company was able to deliver a good operational performance during the period under review.

Your Directors, considering the good performance and a strong cash flow, decided to recommend a Dividend of Rs. 11.55 (231%) per Ordinary (Equity) Share of the face value of Rs. 5 each on the Share Capital out of the Profits for the financial year ended 31^st March, 2022.

The equity dividend outgo for the Financial Year 202122 would absorb a sum of Rs. 1,435.89 crores [as against Rs. 1,087.79 crores comprising the dividend of Rs. 8.75 per Ordinary (Equity) Share of the face value of Rs. 5 each for the previous year]. Dividend will be payable subject to approval of members at the ensuing Annual General Meeting and deduction of tax at source to

Subsidiary, Joint Venture and Associate Companies

The Mahindra Group Companies continue to contribute to the overall growth in revenues and overall performance of your Company.

Tech Mahindra Limited, Flagship Company in the IT Sector, has reported a consolidated operating revenue of Rs. 44,646 crores in the current year as compared to Rs. 37,855 crores in the previous year, an increase of 17.9%. Its consolidated profit after tax after non-controlling interests is Rs. 5,566 crores as compared to Rs. 4,428 crores in the previous year, registering an increase of 25.7%.

The Group''s finance company, Mahindra & Mahindra Financial Services Limited, a listed subsidiary of the Company (Mahindra Finance), reported a consolidated operating income of Rs. 11,318 crores during the current year as compared to Rs. 12,111 crores in the previous year, registering a decrease of 6.5%. The consolidated profit after tax after non-controlling interests for the year is Rs. 1,137 crores as compared to Rs. 773 crores in the previous year, registering an increase of 47.1%.

Mahindra Lifespace Developers Limited, the listed subsidiary in the business of real estate and infrastructure, registered a consolidated operating income of Rs. 394 crores as compared to Rs. 166 crores in the previous year, registering an increase of 137.3%. The consolidated profit after tax after non-controlling interest for the year is Rs. 154 crores as compared to a loss of Rs. 72 crores in the previous year, registering an increase of 313.9%.

Mahindra Holidays & Resorts India Limited, the listed subsidiary in the business of timeshare, registered a consolidated operating income of Rs. 2,013 crores as compared to Rs. 1,730 crores in the previous year i.e. an increase of 16.4%. The consolidated profit after tax after non-controlling interests for the year is Rs. 68 crores as compared to a loss of Rs. 13 crores in the previous year, registering an increase of 623.1%.

Mahindra Logistics Limited, a listed subsidiary in the logistics business, has registered a consolidated operating income of Rs. 4,083 crores as compared to Rs. 3,264 crores in the previous year i.e. an increase of 25.1%. The consolidated profit after tax after noncontrolling interests for the year is Rs. 37 crores as compared to Rs. 30 crores in the previous year, registering an increase of 23.3%.

Ssangyong Motor Company, the Korean subsidiary of the Company (under the Companies Act, 2013), treated as discontinued operation for the purpose of consolidation

in previous year, has reported consolidated operating revenues of Rs. 15,499 crores in the current fiscal year* as compared to Rs. 18,763 crores in the previous fiscal year*. The consolidated loss after tax after non-controlling interests for the current fiscal year* is Rs. 1,646 crores as compared to a consolidated loss of Rs. 3,208 crores in the previous fiscal year*. SsangYong Motor (Shanghai) Company Limited (as informed by Receiver of SsangYong Motor Company) ceased to be a Subsidiary of the Company.

* Fiscal year-January to December

During the year under review, Carnot Technologies Private Limited ceased to be an Associate and became a Subsidiary of your Company.

Further, Mahindra Solarize Private Limited, Mahindra Ideal Finance Limited and Bristlecone Internacional Costa Rica Limited became Subsidiaries of your Company.

During the year under review, Mahindra Vehicle Manufacturers Limited, Hisarlar Makina Sanayi ve Ticaret Anonim §irketi, Hisarlar Ithalat Ihracat Pazarlama Anonim §irketi, Mahindra Publications Limited, MSPE Urja S.R.L., Mahindra Susten Bangladesh Private Limited and Suomen Vapaa-aikakiinteistot Oy LKV ceased to be Subsidiaries of your Company.

ReNew Sunlight Energy Private Limited became an Associate of your Company.

During the year, Mahindra CIE Automotive Limited became an Associate of the Company pursuant to the Scheme of Merger by Absorption of Mahindra Vehicle Manufacturers Limited with the Company becoming effective.

During the year under review, Mahindra Greenyard Private Limited changed its name to Mahindra Fruits Private Limited, Ideal Finance Limited changed its name to Mahindra Ideal Finance Limited and Mahindra Telecom Energy Management Services Limited converted itself into private company and accordingly, its name was changed to Mahindra Telecom Energy Management Services Private Limited.

Subsequent to the year end, Kiinteisto Oy Rauhan Ranta 1, Kiinteisto Oy Rauhan Ranta 2, Kiinteisto Oy Kylpylantorni 1, Kiinteisto Oy Spa Lofts 2, Kiinteisto Oy Spa Lofts 3, Kiinteisto Oy Tiurunniemi, Kiinteisto Oy Vanha Ykkostii, Kiinteisto Oy Katinnurkka, Kiinteisto Oy Tenetinlahti, Kiinteisto Oy Himos Gardens, Kiinteisto Oy Kuusamon Pulkkajarvi 1, Kiinteisto Oy Mallosniemi, Kiinteisto Oy Rauhan Liikekiinteistot 1, OFD Holding B.V., Origin Direct Asia Limited, Origin Direct Asia (Shanghai) Trading Co. Limited, Origin Fruit Direct B.V., Origin Fruit

Services South America SpA, Mahindra Engineering and Chemical Products Limited, Retail Initiative Holdings Limited and Mahindra Retail Limited ceased to be Subsidiaries of your Company.

Meru Mobility Tech Private Limited ("MMTPL"), V-Link Fleet Solutions Private Limited ("VFSPL") and V-Link Automotive Services Private Limited ("VASPL") have ceased to be subsidiaries of Meru Travel Solutions Private Limited ("MTSPL"), a wholly owned subsidiary of your Company and have become subsidiaries of Mahindra Logistics Limited ("MLL"), a listed subsidiary of your Company.

Further, MTSPL has also ceased to be a wholly owned subsidiary of your Company and has become a wholly owned subsidiary of MLL. Since MLL is a listed subsidiary of your Company, MTSPL, MMTPL, VFSPL and VASPL continue to remain the subsidiaries of your Company.

Subsequent to the year end, name of Supermarket Capri Oy has been changed to Kiinteisto Oy Rauhan Liikekiinteistot 1.

Subsequent to the year end, Brainbees Solutions Private Limited became an Associate of your Company pursuant to the Scheme of Merger by Absorption of Mahindra Engineering and Chemical Products Limited, Retail Initiative Holdings Limited and Mahindra Retail Limited with the Company becoming effective.

A Report on the performance and financial position of each of the subsidiaries, associates and joint venture companies included in the Consolidated Financial Statements and their contribution to the overall performance of the Company, is provided in Form AOC-1 and forms part of this Annual Report.

The Policy for determining material subsidiaries as approved by the Board is uploaded on the Company''s website and can be accessed in the Governance section at the Web-link: https://www.mahindra.com/investors/reports-and-filings.

Investment in Carnot Technologies Private Limited

During the year, your Company increased its shareholding in Carnot Technologies Private Limited ("Carnot"), from 48.05% to 68.97% on a fully diluted basis, for an aggregate consideration of Rs. 14 crores comprising of primary infusion in the company of Rs. 2.5 crores

and secondary purchase from its shareholders of Rs. 11.5 crores. Carnot is an Indian Company engaged in the business of technology development, related to IOT, data analytics and AI based products and services. Carnot is expected to support the Company''s strategy by developing digital solutions and applications for its products, customers and businesses, especially for the Farming as a Service segment.

Increase of stake in M.I.T.R.A. Agro Equipments Private Limited

During the year, your Company increased its shareholding in M.I.T.R.A. Agro Equipments Private Limited ("MITRA"), from 39.02% to 47.33% on a fully diluted basis, for an aggregate consideration of around Rs. 7 crores. MITRA is an Indian Company engaged in the business of designing, developing, manufacturing, assembling and selling orchard sprayers, rotavators & spare parts and after sales services therefor. The purchase of additional equity shares in MITRA would support the Company''s Farm Equipment Sector''s growth in the horticulture sector.

Merger of Mahindra Vehicle Manufacturers Limited into Mahindra & Mahindra Limited

As mentioned in the previous Annual Report, the Board of Directors of your Company at its Meeting held on 29^th May, 2019, subject to requisite approvals/consents, approved the Scheme of Merger by Absorption of Mahindra Vehicle Manufacturers Limited, a wholly owned subsidiary of the Company ("MVML") with the Company and their respective shareholders ("Scheme") under the provisions of sections 230 to 232 of the Companies Act, 2013.

During the year, the Scheme has become effective from 1^st July, 2021 post receipt of approvals from Directorate of Industries, Maharashtra Industrial Development Corporation and National Company Law Tribunal, Mumbai Bench ("NCLT").

The Appointed Date of the Scheme was 1^st April, 2019 and the entire assets and liabilities of MVML have been transferred to and recorded by the Company at book values. The entire share capital of MVML was held by the Company. Upon the Scheme being effective, all shares (''Preference and Equity'') held by the Company in MVML stand cancelled, without any further act or deed and no consideration has been discharged on merger. Accordingly, the Merger by Absorption of MVML with the Company stands completed.

 

Sale of stake in Meru Travel Solutions Private Limited by the Company to Mahindra Logistics Limited

During the year, Meru Travel Solutions Private Limited ("MTSPL"), a wholly owned subsidiary of the Company had agreed to sell its entire 100% equity stake in MTSPL''s 3 (three) wholly owned subsidiaries viz; 1) Meru Mobility Tech Private Limited ("MMTPL") for consideration of Rs. 21.4 crores, 2) V-Link Fleet Solutions Private Limited ("VFSPL") for consideration of Rs. 1,205 and 3) V-Link Automotive Services Private Limited ("VASPL") for consideration of Rs. 29.1 crores, to Mahindra Logistics Limited ("MLL") and the Company had also agreed to sell its entire 100% equity stake in MTSPL to MLL for consideration of Rs. 50.4 crores.

Subsequent to the year end, MTSPL, MMTPL, VFSPL and VASPL have become wholly owned subsidiaries of MLL. Since MLL is a subsidiary of the Company, MTSPL, MMTPL, VFSPL and VASPL continue to remain subsidiaries of the Company. This transaction was a strategic move to consolidate all mobility businesses under MLL.

Ssangyong Motor Company

During the year, Ssangyong Motor Company (SYMC) was placed under Court Receivership as per the provisions of Debtor Rehabilitation and Bankruptcy Act of South Korea. Subsequently, SYMC initiated a global bidding process to invite a new investor to take a majority ownership. In October, it signed an MOU with a consortium led by Edison Motors Co., a Korea-based electric bus manufacturer. In January 2022, the Edison Motors Co. consortium signed an investment agreement to invest around KRW 305 billion in SYMC. However, the consortium did not deposit the investment amount by the deadline as per the agreement, following which SYMC terminated the agreement. The Edison Motors Co. consortium has appealed against the termination of agreement. SYMC has initiated a process to invite new investor(s).

Disinvestment of Hisarlar Makina, Turkey

During the year, Mahindra Overseas Investment Company (Mauritius) Limited, a wholly owned subsidiary of the Company ("MOICML") and Erkunt Traktor Sanayi A.S. ("Erkunt"), a wholly owned subsidiary of MOICML and that of the Company, divested its entire stake aggregating 94.3% of the paid-up equity share capital of Hisarlar Makina Sanayi ve Ticaret Anonim §irketi ("Hisarlar"), to two Turkish individuals for an aggregate consideration of Turkish Lira 6.6 million (equivalent to approximately Rs. 5.6 crores). Hisarlar''s agri-machinery business, along with certain relevant assets (including intellectual property and tooling) were transferred to Erkunt. Erkunt also entered into contract manufacturing and licensing agreements with Hisarlar, whereby Hisarlar will manufacture and supply agri-machinery products to Erkunt, and Erkunt will have the right to use Hisarlar brand for agri-machinery.

Merger of Mahindra Engineering and Chemical Products Limited, Retail Initiative Holdings Limited and Mahindra Retail Limited into Mahindra & Mahindra Limited

As mentioned in the previous Annual Report, the Board of Directors of your Company at its Meeting held on 28^th May, 2021, subject to requisite approvals /consents, approved the Scheme of Merger by Absorption of Mahindra Engineering and Chemical Products Limited ("MECPL"), Retail Initiative Holdings Limited ("RIHL") and Mahindra Retail Limited ("MRL") (together referred to as ''Transferor Companies''), direct/indirect wholly owned subsidiaries of the Company, with the Company and their respective Shareholders ("Scheme") under sections 230 to 232 and other applicable provisions of the Companies Act, 2013. The Scheme has been approved by the National Company Law Tribunal, Mumbai Bench at its hearing held on 24^th March, 2022, and the Scheme has become effective from 29^th April, 2022 ("Effective Date"). The Appointed Date of the Scheme was 1^st April, 2021 and the entire assets and liabilities of MECPL, RIHL and MRL have been transferred to and recorded by the Company at their carrying values with effect from the Appointed Date.

The entire share capital of the Transferor Companies was held directly/indirectly by the Company. Upon the Scheme becoming effective, no shares of the Company were allotted in lieu or exchange of the holding of the Company in MECPL or one Transferor Company in another Transferor Company (held directly and jointly with its nominee shareholders) and accordingly, equity shares held in the Transferor Companies stand cancelled on the Effective Date without any further act, instrument or deed. Accordingly, the Merger by Absorption of MECPL, RIHL and MRL with the Company stands completed.

Merger of Mahindra Electric Mobility Limited into Mahindra & Mahindra Limited

As mentioned in the previous Annual Report, the Board of Directors of your Company at its Meeting held on

28^th May, 2021, subject to requisite approvals/consents, approved the Scheme of Merger by Absorption of Mahindra Electric Mobility Limited ("MEML") with the Company and their respective shareholders ("Scheme") under the provisions of sections 230 to 232 and other applicable provisions of the Companies Act, 2013. The Appointed Date of the Scheme is 1^st April, 2021 or such other date as may be directed or approved by the National Company Law Tribunal ("NCLT") or any other appropriate authority. On completion of the merger, the entire assets and liabilities of MEML would be transferred to and recorded by the Company as per applicable accounting standards.

The Scheme provides for issue of Ordinary (Equity) Shares by the Company to the shareholders of MEML (other than the Company or subsidiary(ies) of the Company holding shares directly and jointly with its nominee shareholders). The share exchange Ratio is 480 (Four Hundred and Eighty) Ordinary (Equity) Shares of Rs. 5 each fully paid-up of the Company for every 10,000 (Ten Thousand) Equity Shares of Rs. 10 each fully paid-up held in MEML as on Record Date. The shares held in MEML by the Company or its subsidiary(ies) directly and jointly with its nominee shareholders shall be cancelled upon the Scheme becoming effective. Additionally, the stock options held by the eligible ESOP holders of MEML as on the Record Date shall be substituted with ESOPs of the Company in accordance with the Scheme. The Company has received Observation letters from BSE Limited and National Stock Exchange of India Limited, conveying their no-objection to the Scheme. The Company has filed the Scheme for admission with the NCLT, Mumbai Bench.

Divestment of stake by Mahindra Engineering and Chemical Products Limited in Mahindra Tsubaki Conveyor Systems Private Limited

Mahindra Engineering and Chemical Products Limited ("MECPL"), a wholly owned subsidiary of the Company (merged with the Company with effect from 29^th April, 2022), has sold its entire stake aggregating 49% of the paid-up Equity Share Capital of Mahindra Tsubaki Conveyor Systems Private Limited ("MTC") on 21^st February, 2022 for a consideration of Rs. 58.89 crores to Tsubakimoto Bulk Systems Corp., (TBS) headquartered in Osaka, Japan, a wholly owned subsidiary of Tsubakimoto Chain Co., Japan, a public listed company on the Tokyo Stock Exchange. Pursuant to this transaction, the shareholding of MECPL in MTC has become ''Nil'' and MTC had ceased to be an associate of MECPL with effect from 21^st February, 2022.

Investment in ReNew Sunlight Energy Private Limited

ReNew Sunlight Energy Private Limited ("RSEPL") became an Associate of the Company on 6^th July, 2021. The Company subscribed to 1,60,74,000 Equity Shares of RSEPL amounting to 37.2% of the equity share capital of RSEPL for a consideration of Rs. 16.07 crores. The investment in RSEPL will enable the Company to become a Captive User and consume Solar Power generated by RSEPL.

RSEPL is an Indian company, incorporated on 15^th December, 2020 which intends to setup Solar Park and generate solar power. RSEPL is subsidiary of ReNew Green Energy Solutions Private Limited ("RGESPL") which in turn is a subsidiary of Renew Power Private Limited.

Sale of Stake held by the Company in Mahindra Sanyo Special Steel Private Limited pursuant to exercise of a Put Option

Subsequent to the year end, the Company has agreed to sell 34,75,264 Equity Shares of Rs.10 each held by the Company in Mahindra Sanyo Special Steel Private Limited (''MSSSPL'') constituting 22.81% of the Paid-up Capital of MSSSPL to Sanyo Special Steel Co., Ltd ("Sanyo") pursuant to exercise of a Put Option available to the Company on Sanyo under the Shareholders'' Agreement. Following the sale, the Company''s holding in MSSSPL would become ''Nil'' and MSSSPL would cease to be an Associate of the Company.

Disinvestment of OFD Holding B.V., the Netherlands

In April 2022, Mahindra Fresh Fruits Distribution Holding Company (Europe) B.V. ("MFFD") sold its entire stake aggregating 83.09% of the paid-up Equity Share Capital held in OFD Holding B.V. ("OFD"), a subsidiary of MFFD which in turn is a subsidiary of Mahindra Agri Solutions Limited and that of the Company, for a consideration of EUR 5.1 million (equivalent to Rs. 42.2 crores).

The Corporate Governance Policies guide the conduct of affairs of your Company and clearly delineate 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.

Your Company''s Financial Statements are prepared on the basis of the Significant Accounting Policies that are carefully selected by Management and approved by the Audit Committee and the Board. These Accounting policies are reviewed and updated from time to time.

Your Company uses SAP ERP Systems as a business enabler and to maintain its Books of Account. The transactional controls built into the SAP ERP Systems ensure appropriate segregation of duties, appropriate level of approval mechanisms and maintenance of supporting records. The Policies related to the Information Management reinforce the control environment. The systems, Standard Operating Procedures and controls are reviewed by Management. These systems and controls are subjected to Internal Audit and their findings and recommendations are reviewed by the Audit Committee which ensures the implementation.

Your Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations. Your Company''s Internal Financial Controls were deployed through Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), that addresses material risks in your Company''s operations and financial reporting objectives.

Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by The Institute of Chartered Accountants of India. Based on the results of such assessments carried out by the Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.

Your Company recognizes that the Internal Financial Controls cannot provide absolute assurance of achieving financial, operational and compliance reporting objectives because of its inherent limitations. Also, projections of any evaluation of the Internal Financial Controls to future periods are subject to the risk that the Internal Financial Controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.

A detailed analysis of your Company''s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

All Related Party Transactions entered during the year were in the ordinary course of business and on arm''s length basis. During the year under review, your Company had not entered into any Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements.

The confirmation that there are Nil Material Related Party Transactions, as required under section 134(3)(h) of the Companies Act, 2013 is given in Form AOC-2 as Annexure II, which forms part of this Annual Report.

The Policy on Materiality of and Dealing with Related Party Transactions as approved by the Board is uploaded on the Company''s website and can be accessed in the Governance section at the Web-link: https://www.mahindra.com/investors/reports-and-filings.

Statutory Auditors and Auditors’ Report

As approved by the Shareholders at the 71^st Annual General Meeting (AGM) of the Company held on 4^th August, 2017, Messrs B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration Number 101248W/ W-100022), the retiring Auditors will complete their 5 years tenure as Statutory Auditors of the Company on the conclusion of the 76^th AGM of the Company.

The Board of Directors of the Company at its Meeting held on 28^th May, 2022, on the recommendation of the Audit Committee, have made its recommendation to the Members for re-appointment of Messrs B S R & Co. LLP, Chartered Accountants (Firm Registration Number 101248W/W-100022), who have given a written consent to act as Statutory Auditors of your Company and have also confirmed that the said appointment would be in conformity with the provisions of sections 139 and 141 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, to hold office for

a second term of 5 (five) consecutive years from the conclusion of the ensuing AGM, until the conclusion of the 81^st AGM of the Company to be held in the year 2027.

The Members are requested to re-appoint Messrs B S R & Co. LLP as Statutory Auditors of the Company at the ensuing Annual General Meeting for a second term of 5 (five) consecutive years from the conclusion of the ensuing Annual General Meeting till the conclusion of the 81^st Annual General Meeting and fix their remuneration.

The Auditors'' Report for FY 2021-22 is unmodified i.e. it does not contain any qualification, reservation or adverse remark or disclaimer.

Secretarial Auditor

Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Sachin Bhagwat, Practicing Company Secretary (Certificate of Practice Number: 6029) to undertake the Secretarial Audit of the Company.

The Company has annexed to this Board''s Report as Annexure III, a Secretarial Audit Report for the Financial Year 2021-22 given by the Secretarial Auditor.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer.

Annual Secretarial Compliance Report

The Company has undertaken an audit for the Financial Year 2021-22 for all applicable compliances as per SEBI Regulations and Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report duly signed by Mr. Sachin Bhagwat has been submitted to the Stock Exchanges and is annexed at Annexure IV to this Board''s Report.

Secretarial Audit of Material Unlisted Indian Subsidiary

During the year, Mahindra Vehicle Manufacturers Limited ("MVML"), ceased to be a material subsidiary of the Company with effect from 1^st July, 2021. There is no Material Unlisted Indian Subsidiary of the Company as on 31^st March, 2022 and as such the requirement under Regulation 24A of the Listing Regulations regarding the Secretarial Audit of Material Unlisted Indian Subsidiary is not applicable to the Company for the Financial Year 2021-22.

Cost Auditors

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 2021-22.

The Board of Directors on the recommendation of the Audit Committee, appointed Messrs D. C. Dave & Co., Cost Accountants (Firm Registration Number 000611), as the Cost Auditors of the Company for the Financial Year 2022-23 under section 148 of the Companies Act,

2013. Messrs D. C. Dave & Co. have confirmed that their appointment is within the limits of section 141(3)(g) of the Companies Act, 2013 and have also certified that they are free from any disqualifications specified under section 141(3) and proviso to section 148(3) read with section 141(4) of the Companies Act, 2013.

The Audit Committee has also received a Certificate from the Cost Auditors certifying their independence and arm''s length relationship with the Company.

As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking Members'' ratification for the remuneration payable to Messrs D. C. Dave & Co., Cost Auditors is included in the Notice convening the Annual General Meeting.

Cost Records

As per Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules,

2014, your Company is required to maintain cost records and accordingly, such accounts and records are maintained.

Reporting of Frauds by Auditors

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.

Particulars of the loans given, investment made or guarantee given or security provided and the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient of the loan or guarantee or security are provided in Note Nos. 8 and 40 to the Financial Statements.

Your Company had discontinued acceptance of Fixed Deposits with effect from 1^st April, 2014.

All the deposits from public and shareholders had already matured as on 31^st March, 2017. All the 17 outstanding deposits aggregating Rs. 7.49 lakhs from the public and shareholders as on 31^st March, 2022 had matured and had not been claimed as at the end of the Financial Year. Since then no deposits 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.

The particulars of loans/advances/investments, etc., required to be disclosed pursuant to Para A of Schedule V of the Listing Regulations are furnished separately in this Annual Report.

The transaction(s) of the Company with a company belonging to the promoter/promoter group which hold(s) more than 10% shareholding in the Company as required pursuant to para A of Schedule V of the Listing Regulations is disclosed separately in the Financial Statements of the Company.

Key Managerial Personnel (KMP)

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

(a) Dr. Anish Shah - Managing Director and CEO (re-designated with effect from 2^nd April, 2021)

(b) Mr. Rajesh Jejurikar - Executive Director (Automotive & Farm Sectors)

(c) Mr. Manoj Bhat - Group Chief Financial Officer (appointed with effect from 2^nd April, 2021)

(d) Mr. Narayan Shankar - Company Secretary

Dr. Pawan Goenka ceased to be the Managing Director and CEO as well as the Director of the Company with effect from 2^nd April, 2021. Dr. Anish Shah was re-designated as Managing Director and CEO of the Company and ceased to be the Deputy Managing Director and Group Chief Financial Officer of the Company, with effect from 2^nd April, 2021.

Further, Mr. Anand G. Mahindra transitioned to the role of Non-Executive Chairman of the Company with effect from 12^th November, 2021 upon completion of his tenure as the Executive Chairman of the Company and consequently ceased to be a Key Managerial Personnel of the Company.

Employees’ Stock Option and Employees’ Welfare Schemes

During the year under review, on the recommendation of the Governance, Nomination and Remuneration Committee (GNRC) of your Company, the Trustees of Mahindra & Mahindra Employees'' Stock Option Trust have granted Stock Options to employees under the Mahindra & Mahindra Limited Employees Stock Option Scheme 2010. No Stock Options have been granted to employees under the Mahindra & Mahindra Limited Employees Stock Option Scheme 2000 (2000 Scheme).

The Company has in force the following Schemes which get covered under the provisions of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SBEB Regulations 2021):

1. Mahindra & Mahindra Limited Employees Stock Option Scheme - 2000 (2000 Scheme)*

2. Mahindra & Mahindra Limited Employees Stock Option Scheme - 2010 (2010 Scheme)

3. M&M Employees Welfare Fund No. 1

4. M&M Employees Welfare Fund No. 2

5. M&M Employees Welfare Fund No. 3

* No outstanding options as on 31^st March, 2022

There were no changes made to the above Schemes except alignment of 2010 Scheme with the SBEB Regulations 2021. The above-mentioned Schemes are

in compliance with the SBEB Regulations 2021. Your Company''s Secretarial Auditor, Mr. Sachin Bhagwat, has certified that the Company''s above-mentioned Schemes have been implemented in accordance with the SBEB Regulations 2021, and the Resolutions passed by the Members for the 2000 Scheme and the 2010 Scheme.

Information as required under Regulation 14 read with Part F of Schedule I of the SBEB Regulations 2021 has been uploaded on the Company''s website and can be accessed at the Web-link: https://www.mahindra.com/resources/FY22/AnnualReport.zip.

Particulars of Employees and related disclosures

The Company had 389 employees who were in receipt of remuneration of not less than Rs. 1,02,00,000 during the year ended 31^st March, 2022 or not less than Rs. 8,50,000 per month during any part of the year.

Details of employee remuneration as required under provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be made available during 21 days before the Annual General Meeting in electronic mode to any Shareholder upon request sent at [e-mail]. Such details are also available on your Company''s website and can be accessed at the Web-link: https://www.mahindra.com/resources/FY22/AnnualReport.zip.

Disclosures with respect to the remuneration of Directors, KMPs and employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure V to this Report.

Industrial Relations

The year under review witnessed a very positive Industrial Relations Scenario across all manufacturing locations for the Automotive and Farm Equipment Sectors even during the toughest time of Pandemic.

Your Company''s focus continues towards propagating proactive and employee centric practices. The transformational work culture initiative that aims to create an engaged workforce with an innovative, productive and a competitive shop-floor ecosystem continues to grow in strength. Some examples of the programs put in place includes ''Rise for Associates'', industrial relations skills for frontline officers, Employee of the year, e-compliance,

e-portal for reward and recognition of associates and Code of Conduct for associates. The Employee Relations Council is taking forward the work of Transformational Work Culture Committee (TWCC) and leads the design and implementation of these programs and reviews its progress.

With the objective of capability building, developing future ready workforce and fostering togetherness at the workplace, your Company implements multiple training and engagement programs on an ongoing basis. These include various behavioral and functional programs such as safety and environment, quality tools, TPM, continuous improvement, result orientation, relationship management, decision making and programs on skill building. In its continuous endeavor in employee lifecycle processes, your Company has launched-Employee Connect Centre (ECC) digital form of traditional time office and payroll for ease of access to associates, Success Factors & Learning Management System for associates to enable self-paced learning on a digital space.

The Mahindra Skill Excellence initiative, a holistic approach to enhance the skill and capabilities of shop floor associates, is receiving good participation across manufacturing facilities.

One of your Company''s associates from MRV Chennai won the silver medal in IndiaSkills Competition. The Mahindra Parivaar including dealers has won all the top three positions in the Automobile Technology Category at IndiaSkills, New Delhi held from 6^th to 10^th January 2022. One among them would be representing the Company at the World Skills Competition to be held at Shanghai, China, in October later this year. In an endeavor to improve quality, reduce cost, ensure safety, and improve productivity, your Company''s shop floor associates managed to generate on an average 10 ideas per person in the Financial Year 2022 even during the time of uncertainties.

This year significant emphasis was also laid towards raising awareness on health and wellness of employees and their family members on protection from COVID-19 under the brand program "Swasth Raho Mast Raho" over Google Teams platform in addition to regular annual medical check-ups and health awareness activities. Diet food has become a way of life over the past four years. The Company maintains an ''Employee Health Index'' at an individual level, and this has been a useful tool in identifying employees who require focussed counselling and monitoring.

Proactive and employee-centric shop floor practices, a focus on transparent communication of business goals, an effective concern resolution mechanism, and a firm belief that employees are the most valuable assets of the Company, are the cornerstone of your Company''s employee relations approach. An ''open door policy'' with constant dialogue to create win-win situations, have helped your Company build trust and harmony.

The industrial relations scenario continued to be largely positive across all the manufacturing locations. Long term settlements and bonus settlements were amicably agreed upon at all locations. The sustained efforts towards building a transformational work culture resulted in zero production loss in the Financial Year 2021-22 and helped create a collaborative, healthy and productive work environment.

Safety, Occupational Health and Environment

Your Company has in place the Safety, Occupational Health & Environment (SOH&E) Policy. During the year under review, the Company started external virtual assessment and recertification as per the standard, ISO: 45001: 2018. The management commitment towards SOH&E is demonstrated through adoption of new compliance management digitization which included all notifications published during the pandemic period. The Company implemented various initiatives by incorporating all Government released guidelines with overall health and hygiene being merged with the SOH&E policy. The achievements were assessed through management reviews from time to time.

At each Plant location, annual events like Road Safety Week, National Safety Day/Month and Fire Service Week were organized virtually. As per new normal, various new topics were deployed to train employees on Safety, Health and Environment. Along with the virtual meetings, dexterity competency training programs were deployed for associates, with special focus on safety and fire safety by introducing Self-Managed Teams (SMT''s). The training programs were leveraged by on-the-job training (OJT) and virtual reality (V.R.) programs supporting various safety topics to enhance learning.

To strengthen the safety best practices, the Company continues to focus on theme-based safety topics arising out of OHS hazards and immediate corrective action as well as permanent corrective actions are implemented

with agility. Continuous drive is taken to enhance Behavior Based Safety (BBS) Level 2. Additionally, your Company introduced new fire protection system by upgrading and introducing new technology to eliminate property losses. Results were monitored by reviewing office fire prevention and protection. Fire load reduction is monitored by setting up targets and working towards sustenance of zero fire incidence across each manufacturing location in each Sector.

Your Company has followed the assessment by evaluation for implementation through The Mahindra Safety Way (TMSW). For this evaluation process, total 25 parameters are assessed for the Mahindra Group companies across all the plants.

Your Company carried out Management of change process, Gap audit process, HAZOP analysis for each license storage premises which is audited by competent persons apart from statutory Safety, Fire Safety, Electrical Safety Audits. For the year under review, your Company achieved substantial reduction in the results of lag indicators, first aid incidences by adopting new initiatives. Focussed drive was taken on critical machinery and equipments. Plastic elimination and recyclable packaging material in more and more spares is initiated by substituting the material as appropriate.

To eliminate and minimize the overall environmental impact in line with the "Environmental, Social and Governance" (ESG) practices, your Company has continuously implemented new projects. By revisiting the objectives, newer targets were revised. New techniques used in various projects have been implemented by your Company in zero carbon emission, waste avoidance/ minimization. Carbon footprint reduction is achieved by deploying new energy conservation motors and increasing share of renewable energy. Many of the Company''s new initiatives have been shared by your Company with the supplier community to encourage their consultation and participation in line with current and future environmental challenges.

During the year under review, your Company started reporting the implementation status under Extended Producer Responsibility Organizations (EPRO) with newly set targets established by Central Government i.e. Central Pollution Control Board by way of released new amended notification. Plastic waste management activities cover pan India network developed for plastic waste recycling management for all the Company''s manufacturing plants

and spares business units are also involved with state wise clusters for its Suppliers and Dealers.

Your Company implemented various measures towards water neutrality and achieved reduction in consumption of freshwater requirement. By demonstrating implementation measures, a marked improvement has been observed in ground water recharging and water recycling.

Your Company continued its commitment to improve the well-being of employees and contract associates through various activities. Education and awareness sessions were conducted on enhancement of physical and mental health. Also, through virtual platform "Swasth Raho Mast Raho" programs are being conducted by renowned faculties for Mahindra family members. Further, vaccination drive was conducted in each plant premises to facilitate the vaccination for employees and their family members. Health magazine was published "Health in COVID era" to demonstrate excellence in occupational health.

Additionally, the Company has initiated a stage-wise physiotherapy study to improve ergonomics at the operational stages working towards fatigue elimination at workplace. Videos were created to improve their posture observed at shop floor. First aid refresher training programs were organized for employees and associates.

Your Company has taken care of all the employees of Mahindra Group companies in the pandemic and various activities were conducted by way of medical check-up, vaccination drive, webinar for all the employees and their family members. Consultation and counselling on pandemic illness, advisory publishing, for all employees and family members were also completed. Robust implementation of compliance for Bio-medical Waste Disposal Management as per pandemic notifications was also carried out.

In addition, environment protection awareness is generated virtually amongst all stakeholders on an annual basis for World Ozone Day, World Environment Day, World Earth Day, World Water Day and Energy Conservation Week and Water Conservation Week, etc.

Certifications/Recertifications

All Plants of your Company are re-certified for Standard ISO 45001: 2018 and ISO 14001: 2015. Further, all plants

have implemented Integrated Management System (IMS). Your Company is certified for Zero Waste to Landfill with 99% and above conversion rate which ensures the commitment of recycling of waste at maximum extent to protect the environment.

The Senior Management revises and reviews the performances periodically. Focus on new initiatives involving all stakeholders coupled with management reviews have helped your Company to demonstrate excellence in SOH&E performance.

Directors

As mentioned in the previous Annual Report, Dr. Pawan Goenka ceased to be the Managing Director and Chief Executive Officer of the Company with effect from 2^nd April, 2021. Dr. Goenka also ceased to be a Member of the Board of Directors of the Company with effect from 2^nd April, 2021.

In terms of the Succession Planning approved by the Governance, Nomination and Remuneration Committee and Board of your Company, Dr. Anish Shah took over as the Managing Director and Chief Executive Officer of the Company with effect from 2^nd April, 2021.

Mr. Anand G. Mahindra transitioned to the role of Non-Executive Chairman of the Company with effect from 12^th November, 2021 upon completion of his tenure as the Executive Chairman of the Company.

Ms. Nisaba Godrej and Mr. Muthiah Murugappan were appointed as Independent Directors of the Company for a term of 5 (five) consecutive years commencing from 8^th August, 2020 to 7^th August, 2025.

Mr. T.N. Manoharan was re-appointed as an Independent Director of the Company for a second term of 5 (five) consecutive years commencing from 11^th November, 2021 to 10^th November, 2026.

Padma Bhushan Award to Mr. Anand G. Mahindra, Chairman

Mr. Anand G. Mahindra, Chairman of the Company was conferred with one of the highest civilian honour "Padma Bhushan" Award for 2020 ("Award") for his distinguished service of high order in the field of Trade and Industry. The Award which had been conferred on 26^th January, 2020 was received by him on 8^th November, 2021 from the President of India at Rashtrapati Bhavan in New Delhi.

The Chairman of the Company has expressed gratitude towards all the Mahindraites and Stakeholders who embraced the Rise philosophy and made this possible.

Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and Listing Regulations. Further, pursuant to the SEBI (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2021 dated 3^rd August, 2021 read with Corrigendum dated 6^th August, 2021 amending the definition of Independent Director under Listing Regulations with effect from 1^st January, 2022, a confirmation had been obtained from all the Independent Directors of the Company that they meet the revised criteria of Independence as of 1^st January, 2022.

The Board is of the opinion that the Independent Directors of the Company hold highest standards of integrity and possess requisite expertise and experience required to fulfill their duties as Independent Directors.

In terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The Indian Institute of Corporate Affairs, Manesar (''IICA''). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by IICA within a period of 2 (two) years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption.

The Independent Directors of the Company are exempt from the requirement to undertake online proficiency self-assessment test except Mr. Muthiah Murugappan who would be undertaking the said test in due course.

Lead Independent Director

Mr. Vikram Singh Mehta, Independent Director and Chairman of Governance, Nomination and Remuneration Committee has been appointed as the Lead Independent Director with effect from 1^st April, 2021. The role and responsibilities of the Lead Independent Director are provided in the Corporate Governance Report forming part of this Annual Report.

Retirement by rotation

Dr. Anish Shah and Mr. Rajesh Jejurikar retire by rotation and, being eligible, offer themselves for re-appointment at the 76^th Annual General Meeting of the Company scheduled to be held on 5^th August, 2022.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 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, including Independent Directors, Chairman of the Board, Managing Director & Chief Executive Officer and Executive Director (Automotive & Farm Sectors).

I Feedback Mechanism

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.

Evaluation of Committees

The performance evaluation of Committees was based on criteria such as structure and composition of Committees, attendance and participation of member of the Committees, fulfilment of the functions assigned to Committees by the Board and applicable regulatory framework, frequency and adequacy of time allocated at the Committee Meetings to fulfil duties assigned to it, adequacy and timeliness of the Agenda and Minutes circulated, comprehensiveness of the discussions and constructive functioning of the Committees, effectiveness of the Committee''s recommendation for the decisions of the Board, etc.

Evaluation of Directors and Board

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 Board was also carried out by the Independent Directors, taking into account the views of the Executive Directors and Non Executive Directors. The performance evaluation of the Managing

Director and the Executive Director of the Company was carried out by the Chairman of the Board and other Directors.

Criteria for Independent Directors

The performance evaluation of Independent Directors was based on various criteria, inter alia, including 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.

Criteria for Chairman

The performance evaluation of Chairman of the Board was based on various criteria, inter alia, including style of Chairman''s leadership, effective engagement with other Board members during and outside the meetings, allocation of time provided to other Board members at the meetings, effective engagement with shareholders during general meetings, etc.

Criteria for Managing Director and Executive Director

The performance evaluation of Managing Director and Executive Director was based on various criteria, inter alia, including leadership style, standards of integrity, fairness and transparency demonstrated, identification of strategic targets, anticipation of future demands and opportunities, resource staffing to meet short term and long term goals, engagement with Board and Committee members, updating Board on significant issues, commitment to organisational values, vision and mission, adaptation to meet changing circumstances, knowledge and sensitivity of stakeholders'' needs within and outside the Company demonstrated and effective communication skills.

Results of Evaluation

The results of evaluation showed high level of commitment and engagement of Board, its various committees and senior leadership. The results of the evaluation were shared with the Board, Chairman of respective Committees and individual Directors. Based on the outcome of the evaluation, the Board has agreed on an action plan to further improve the effectiveness and functioning of the Board and Committees.

The Directors expressed their satisfaction with the evaluation process. During the year under review, the Committee ascertained and reconfirmed that the

deployment of "questionnaire" as a methodology, is effective for evaluation of performance of Board and Committees and Individual Directors.

Policies

Your Company has adopted the following Policies which, inter alia, include criteria for determining qualifications, positive attributes and independence of a Director:

(a) Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management;

(b) Policy for remuneration of the Directors, Key Managerial Personnel and other employees.

Policy (a) mentioned above includes the criteria for determining qualifications, positive attributes and independence of a Director, identification of persons who are qualified to become Directors and who may be appointed in the Senior Management Team in accordance with the criteria laid down in the said Policy, succession planning for Directors and Senior Management, and Policy statement for Talent Management framework of the Company. The Policy was modified to align with the amendments made to the Listing Regulations effective from 1^st January, 2022.

Further, to strengthen the disclosures on Corporate Governance, the Policy was amended to include the following three Annexures:

• Policy on Board Membership Criteria;

• The Board Diversity Policy;

• Policy on Criteria for determining Independence of Directors.

Policy (b) mentioned above sets out the approach to Compensation of Directors, Key Managerial Personnel and other employees in the Company.

Policies mentioned at (a) and (b) above are available on the website and can be accessed in the Governance section at the Web-link: https://www.mahindra.com/investors/reports-and-filings.

Familiarisation Programme for Independent Directors/Non-Executive Directors

The Members of the Board of the Company are afforded many opportunities to familiarise themselves with the Company, its Management and its operations. The Directors are provided with all the documents to enable them to have a better understanding of the Company, its various operations and the industry in which it operates.

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.

Executive Directors and Senior Management provide an overview of the operations and familiarize the new NonExecutive Directors on matters related to the Company''s values and commitments. They are also introduced to the organization structure, constitution of various committees, board procedures, risk management strategies, etc.

Strategic Presentations are made to the Board where Directors get an opportunity to interact with Senior Management. Directors are also informed of the various developments in the Company through Press Releases, emails, etc.

The Company has a web based portal i.e. Board portal, accessible to all the Directors which, inter alia, contains the following information:

• Roles, responsibilities and liabilities of Independent Directors under the Companies Act, 2013 and the Listing Regulations

• Board Minutes, Agenda and Presentations

• Annual Reports

• Code of Conduct for Directors

• Terms and conditions of appointment of Independent Directors.

Pursuant to Regulation 25(7) of the Listing Regulations, the Company imparted various familiarization programmes for its Directors including review of Investments of the Company by Strategic Investment Committee, Industry Outlook at the Board Meetings, Regulatory updates at Board and Audit Committee Meetings covering changes with respect to the Companies Act, 2013, Listing Regulations, Taxation and other matters, Presentations on Internal Control over Financial Reporting, Operational Control over Financial Reporting, Prevention of Insider Trading Regulations, Framework for Related Party Transactions, Plant Visit, Meeting with Senior Executive(s) of your Company, Corporate Social Responsibility Strategy etc. Pursuant to Regulation 46 and 62(1A) of the Listing Regulations, the details required are available on the website of your Company at the web link: https://www.mahindra.com/resources/FY22/AnnualReport.zip.

Directors’ Responsibility Statement

Pursuant to section 134(5) of the Companies Act, 2013, your Directors, based on the representations received from the Operating Management, and after due enquiry, confirm that:

(a) i n the preparation of the annual accounts for the Financial Year ended 31^st March, 2022, the applicable accounting standards have been followed;

(b) they had in consultation with Statutory Auditors, selected accounting policies and applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2022 and of the profit of the Company for the year ended on that date;

(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and irregularities;

(d) they have prepared the annual accounts on a going concern basis;

(e) they have laid down adequate Internal Financial Controls to be followed by the Company and such Internal Financial Controls were operating effectively during the Financial Year ended 31^st March, 2022;

(f) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively throughout the Financial Year ended 31^st March, 2022.

Board Meetings and Annual General Meeting

A calendar of Meetings is prepared and circulated in advance to the Directors.

During the year 1^st April, 2021 to 31^st March, 2022, six Board Meetings were held on: 29^th April, 2021, 28^th May, 2021, 6^th August, 2021, 9^th November, 2021, 10^th and 11^th February, 2022 and 15^th March, 2022. The 75^th Annual General Meeting (AGM) of the Company was held on 6^th August, 2021 through Video Conferencing/Other Audio Visual Means.

Meetings of Independent Directors

The Independent Directors of your Company meet before the Board Meetings without the presence of the Chairman of the Board or the Managing Director or the Executive Director or other Non-Independent Directors or Chief Financial Officer or any other Management Personnel.

These Meetings are conducted in an informal and flexible manner to enable the Independent Directors to discuss matters pertaining to, inter alia, 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.

Audit Committee

The Committee comprises of four Directors viz. Mr. T. N. Manoharan (Chairman of the Committee), Ms. Shikha Sharma, Mr. Vikram Singh Mehta and Mr. Haigreve Khaitan. All the Members of the Committee are Independent Directors and possess strong accounting and financial management knowledge. The Company Secretary of the Company is the Secretary of the Committee.

During the year, the scope of Audit Committee was amended to, inter-alia, align with the provisions of SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021, the details of which are furnished in the Report on Corporate Governance that forms part of this Annual Report.

All the recommendations of the Audit Committee were accepted by the Board.

Winding-up of Loans & Investment Committee of the Company

The Board of Directors of your Company at its Meeting held on 10^th and 11^th February, 2022 as part of simplification process, considered and approved the winding-up of the Loans & Investment Committee with effect from 10^th February, 2022.

Corporate Governance

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

Your Company featured in the ''Leadership'' category in the Corporate Governance Scorecard 2021 which is developed by Institutional Investor Advisory Services India Limited (''IiAS'') with support from International Finance Corporation (''IFC'') and BSE Limited (''BSE''). Further, your Company received the prestigious ''Golden Peacock Global Award for Excellence in Corporate Governance'' for the year 2021.

A Report on Corporate Governance along with a Certificate from the Statutory Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Schedule V of the Listing Regulations forms part of this Annual Report.

Code Of Conduct

Your Company''s Code of Conduct (the Code) outlines the commitment to principles of integrity, transparency and fairness that employees, suppliers, distributors and other third parties who work with the Company must comply. The Code of Conduct enables every person working for and with the Company to make the right choices and demonstrate the highest standards of integrity and ethical behaviour. It is translated in 4 regional languages and is available on the Company''s website and can be accessed on the website in the Governance section at the Web-link: https://www.mahindra.com/investors/reports-and-filings.

All the policies are accessible through the Rise@Work on the Company''s intranet as well as on the mobile app Me-connect.

The Ethics & Governance framework is also anchored by clearly defined policies and procedures, covering areas such as Anti-Bribery and Anti-Corruption (ABAC), Policy on Gifts & Entertainment, Prevention of Sexual Harassment at Workplace (POSH) and Whistle Blower Policy.

The Company has put in place an implementation framework through annual awareness program. All new joiners are required to undertake on-line training of the Code, POSH and ABAC on joining the employment. For reinforcing Code and Policies, all employees are further required to complete mandatory e-Learning refresher training, annually. In addition to this, an annual Compliance module is mandated to all employees. Your Company has a stellar support of 150 Ethics Counsellors who help in a continuous cycle of effective communication of Code and Policies with their cohorts.

The processes for identifying and resolving breaches of the Code and Policies are clearly defined and regularly communicated throughout the Company. Data relating to such breaches is reviewed by the Corporate Governance Council and by relevant Board Committees that helps to determine the allocation of resources for future Policy development, process improvement, training and awareness initiatives. The Corporate Governance Council ensures that the Ethics & Governance framework is executed effectively. The Group Ethics and Governance Committee and Business Ethics and Governance Committees help to ensure that the decisions are taken in fair, just and consistent manner across various functions of that business.

Vigil Mechanism

The Vigil Mechanism as envisaged in the Companies Act, 2013, the Rules prescribed thereunder and the Listing Regulations is implemented through the Company''s Whistle Blower Policy to enable the Directors, employees and all stakeholders of the Company to report genuine concerns (about unethical behaviour, actual or suspected fraud, or violation of the Code), to provide for adequate safeguards against victimisation of persons who use such mechanism and make provision for direct access to the Chairman of the Audit Committee. A quarterly report on the whistle blower complaints received is placed before the Audit Committee for its review.

The Whistle Blower Policy was updated during the year, the details of which may be referred to in Annexure VIII of this Board''s Report. Whistle Blower Policy of your Company is available on the Company''s website and can be accessed in the Governance section at the Web-link: https://www.mahindra.com/investors/reports-and-filings.

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has a detailed Policy on Prevention of Sexual Harassment (POSH Policy) in place in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (Act). Internal Complaints Committees (ICC) have been set up to redress complaints received regarding sexual harassment and the Company has complied with provisions relating to the constitution of ICC under the Act. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. The POSH Policy is gender inclusive, and the framework ensures complete anonymity and confidentiality. The POSH Policy was updated during the year, the details of which may be referred to in Annexure VIII of this Board''s Report.

While maintaining the highest governance norms, the various ICC have appointed internal members with 50% being women and external members with relevant experience. The ICC is presided by a senior woman employee in each case. The ICC has been updated on judicial trends and trained regularly on the nuances of the Act.

During the year under review, 9 complaints with allegations of sexual harassment were filed and 7 were resolved as per the provisions of the Act. 2 complaints are pending as of 31^st March, 2022.

Awareness in this area has been created vide Speak Up campaign with focus on virtual workings and reiterating Mahindra''s commitment for providing safe workplace to all its employees. The Company has organised induction training for new joiners, online training and refresher modules, virtual and classroom trainings by Ethics Counsellors, emailers and posters to sensitise the employees to conduct themselves in a professional manner.

Business Responsibility Report

The ''Business Responsibility Report'' (BRR) of your Company for the Financial Year 2021-22 forms part of this Annual Report as required under Regulation 34(2)(f) of the Listing Regulations.

Your Company strongly believes that sustainable and inclusive growth is possible by using the levers of environmental and social responsibility while setting aspirational targets and improving economic performance to ensure business continuity and rapid growth.

Your Company is committed to leverage ''Alternative Thinking'' to build competitive advantage in achieving high shareholder returns through customer centricity, innovation, good governance and inclusive human development while being sensitive to the environment.

Risk Management

Your Company has a well-defined risk management framework in place. The risk management framework works at various levels across the enterprise. These levels form the strategic defence cover of the Company''s risk management. The Company has a robust organizational structure for managing and reporting on risks.

Your Company has constituted a Risk Management Committee of the Board which is authorized to monitor and review risk management plan and risk certificate. The Committee is also empowered, inter alia, to review and recommend to the Board 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 include review of risks and Risk Management Policy at periodic intervals. During the year under review, the terms of reference of the Risk Management Committee and the Risk Management Policy were amended by the Board pursuant to the Listing Regulations.

Your Company has developed and implemented a Risk Management Policy which is approved by the Board. The Risk Management Policy, inter alia, includes identification of risks, including cyber security and related risks and also 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 organization.

Corporate Social Responsibility (CSR)

Over the past seven decades, your Company has built its reputation as a good corporate citizen by not only doing good business, but also by driving positive change in society. The core purpose of your Company is to "challenge conventional thinking and innovatively use all our resources to drive positive change in the lives of our stakeholders and communities across the world, to enable them to RISE". Keeping the core purpose in mind, your Company has invested in impactful CSR projects.

This year too was a challenging year for humanity, with the adverse impact of the COVID-19 pandemic being felt by one and all, but more so by vulnerable and marginalized groups on whom the impact has been the hardest. Your Company has invested in a concerted manner to provide COVID-19 relief and rehabilitation with an aim of building resilient communities. The Mahindra Group swiftly responded to the pandemic by putting into action a series of relief initiatives across 23 States and Union Territories. The State and District administration and hospitals were provided with 23 Oxygen Plants, 866 Oxygen Concentrators and 94 Ambulances by the Group. The Group also distributed over 2,37,750 cooked meals and provided ration and other essentials to over 3,66,090 beneficiaries. The frontline workers were supported through distribution of over 2,75,050 protective gears such as face masks, face shields, gloves, PPE kits, etc. and 8,450 litres of sanitizer. Infrastructural support and consumables were provided to over 40 hospitals across the country and the capacity of COVID Care centre in Pune MHADA was further augmented.

Your Company also supported Mass scale Preventive actions for COVID-19 transmission (IMPACT) program in 600 villages in Araku, Andhra Pradesh. Apart from raising awareness, the project ensured that thermal screening was carried out in the villages thereby leading to early detection and immediate treatment through provision of drugs under medical supervision. A similar program was implemented in partnership with Aatapi Seva Foundation for marginalized communities in 25 villages of Bharuch, Gujarat. 700 Front line workers

were also provided with a self-contained kit consisting of a pulse oximeter, basic protective equipment, and supplementary information communication material to protect and provide the health safety net to more than 4,00,000 people in rural India.

Your Company has continued to support the constituencies of girls, youth and farmers through projects in the domains of education, health and the environment. This year your Company made special effort in empowering women both in urban and rural areas. By investing CSR efforts in these critical constituencies who contribute to nation building and the economy, your Company will enable our stakeholders and communities to RISE. The impact of some of the CSR projects your Company invested in Financial Year 2021-22 are shown below:

- Project Nanhi Kali supported the education of 1,85,759 underprivileged girls through 7,049 Academic Support Centres across 20 Districts in 9 States of India. Of these, your Company continued to support 38,096 girls, which includes an additional 5,050 girls enrolled in Financial Year 2021-22, while the Mahindra Group as a whole continued to support 83,591 girls. Despite COVID-19 restrictions, this project ensured continuous learning for girl children.

- Mahindra Pride: Mahindra Pride continued to enhance employability skills of youth from socially and economically disadvantaged backgrounds through Mahindra Pride Schools and Mahindra Pride Classrooms. In Financial Year 2021-22, Mahindra Group facilitated training of 1,798 youth under the Mahindra Pride school programme out of which 1,132 youth were supported through your Company. Similarly, under Mahindra Pride Classroom intervention, Mahindra Group supported skills enhancement of 1,81,165 youth, out of which 1,13,282 youth were supported through your Company.

- Krishi Mitr Prerna: Through the Krishi Mitr Prerna Projects, your Company continued to support small and marginal farmers by training them in effective farming practices and providing advisory services including soil health, access to gender friendly farm equipment, linkages to Government welfare support initiatives, resource efficient agriculture methodologies and increasing agricultural income

through increasing crop productivity. The program envisions to develop and empower farmers to meet the demand supply gap of agricultural produce for self-consumption and market requirements. In Financial Year 2021-22, the Company supported 20,135 farmers at PAN India level.

- Women Empowerment through Regenerative Agriculture: The main objective of the programme was to enable women farmers to use regenerative agriculture as a technique to transform the soil on their land, increase productivity and earn profits throughout the year, in addition to ensuring food and nutrition security for their families. Through this project sponsored by your Company, 3,400 women farmers from Moga, Tarn Taran (Punjab) and Shravasti (Uttar Pradesh) were skilled and provided knowledge in regenerative organic farming practice. 3 Regenerative Agriculture Hubs have been set up, each having a demo farm for sharing knowledge on various agricultural practices, training on various farm tools, equipments and techniques.

- Women''s Initiative for Synergistic Empowerment

(WISE): The programme aims at the economic empowerment of women by promoting enterprises through building entrepreneurial capabilities, financial management and digital technology with specialization in better marketing of products. As part of the programme sponsored by your Company, 20,000 SHG members from 14 districts in Maharashtra and Madhya Pradesh, got an opportunity to explore their entrepreneurship capabilities through enterprise awareness programmes. The programmes run with a focus on addressing gender barriers to enterprise. To further support women specifically in branding, packaging and digital marketing, 12 economic empowerment hubs have been created as part of the programme.

- Watershed Development: Your Company entered into a Public Private Partnership (PPP) for a Watershed Development Fund (WDF) and Climate Change Adaptation (CCA) Program with National Bank for Agriculture and Rural Development (NABARD) in two locations:- (1) At Hatta, District Damoh, Madhya Pradesh for developing National Priority Areas of Aspirational District (2) Development of River Basin in Igatpuri Block, Nashik District,

2. CSR Journal Excellence Award 2021 for PRERNA Project in the Category-Women Empowerment and Child welfare. (March 2022)

3. CII Award - Noteworthy Project in Water Management for Integrated Watershed Management Project, Hatta. (December 2021)

4. Project Nanhi Kali - Runner-up in the international BRICS SDG Awards in the category of SDG 5: Gender Equality. (August 2021)

5. Runner-up in CSR Journal Excellence Award 2021 for Self-Implemented Integrated Water Management Project, Hatta in the Category-Environment. (March 2022)

CSR Policy

The Corporate Social Responsibility Committee had formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) which was subsequently adopted by it and is being implemented by the Company. The CSR Policy including name of the CSR projects or programs undertaken can be accessed in the Governance section at the Web-link: https://www.mahindra.com/investors/reports-and-filings.

CSR Committee

As mentioned in the previous Annual Report, the Board at its Meeting held on 26^th March, 2021 re-constituted the Corporate Social Responsibility Committee. Dr. Pawan Goenka ceased to be the Member of the Committee with effect from 2^nd April, 2021, upon cessation as a Director of the Company and Dr. Anish Shah was inducted in his place.

Further, the Board at its Meeting held on 28^th May, 2021 re-constituted the Corporate Social Responsibility Committee by inducting Mr. Muthiah Murugappan as a Member of the Committee. The CSR Committee comprises of Dr. Vishakha N. Desai (Chairperson), Mr. Anand G. Mahindra, Dr. Anish Shah, Mr. Vikram Singh Mehta and Mr. Muthiah Murugappan.

The Committee, inter alia, reviews and monitors the CSR as well as Sustainability activities.

Subsequent to the year end, the scope of the Committee was enhanced by including in its Charter Environment, Social and Governance (ESG) related matters, the details of which are furnished in the Report on Corporate Governance that forms part of this Annual Report.

 

Maharashtra covering around 30 villages, over area of 15,800 hectares. During Financial Year 2021-22, your Company supported more than 9,000 farmers through various interventions of soil and water conservation works, crop diversification measures, livelihood training/support and drudgery reduction initiatives for Integrated Development of the rural catchment. In addition, 18,000 people were benefited with availability of drinking water.

- Mahindra Hariyali: Through this intervention, the Mahindra Group planted 1.57 million trees, which contributed to building green cover and protecting the rich biodiversity of the country. Your Company contributed towards plantation of 1.32 million trees out of which 1.11 million trees were planted in the Araku Valley, which besides greening the environment also provided livelihood support to tribal farmers by growing coffee and fruit bearing trees in this region. Till date, 20.65 million trees have been planted through Mahindra Hariyali, of which 13.40 million trees were planted in Araku which supported livelihood of 25,000 tribal farmer families.

- Employee Volunteering: Despite the challenges posed by the pandemic, the Company''s employees continued to give back to the Society. Through the employee volunteering platforms (ESOPs and MySeva) 38,803 employees invested 3,62,585 person hours of their personal time in volunteering activities. Of these 7,718 were Company employees who contributed 47,133 person hours towards a variety of social causes. At the Group level 1,07,600.50 person hours were invested through individual acts of Social Responsibility undertaken by Mahindra Group employees which they reported on MySeva Platform. The balance 2,54,984.50 person hours was contributed through Employee Social Options (ESOPs) which is the Company organised volunteering programme at the Mahindra Group.

During the last Financial Year, your Company''s efforts to drive positive change were acknowledged by various forums and your Company received the following awards:

1. FICCI CSR Award for Mahindra Hariyali Project in the Category - Skill Development and Livelihood -Private Sector Companies with INR 3001 Crores per annum and above. (August 2021)

During the year under review, your Company spent Rs. 97,07,68,887 on CSR activities. The amount equal to 2% of the average net profit for the past three financial years required to be spent on CSR activities was Rs. 96,84,63,072. The Board has considered the Impact Assessment Reports at its meeting held on 28^th May, 2022. The detailed Annual Report on the CSR activities undertaken by your Company in the Financial Year 2022 along with the Executive Summary for Impact Assessment Reports of the applicable projects, is annexed herewith and marked as Annexure VI.

The complete Impact Assessment Reports of the applicable projects can be accessed at the Web-link: https://www.mahindra.com/resources/FY22/AnnualReport.zip

Sustainability

During the year under review, the 14^th Sustainability Report for the year 2020-21 was released. The Report was externally assured by KPMG and prepared in accordance with the GRI Standards-Core option.

By implementing Mahindra Sustainability Framework, your Company continued the focus on the Environmental, Social and Governance (ESG) parameters ensuring a common language for sustainability across the Group. This framework defines sustainability as "Building enduring business by rejuvenating the environment and enabling stakeholders to rise". Under the three pillars People, Planet and Profit of Sustainability Framework; various actions have been implemented across the Group.

The ESG information is disclosed under Dow Jones Sustainability Index (DJSI) and Carbon Disclosure Project (CDP). In DJSI, your Company has achieved position in both World and Emerging Market Index. In CDP Climate and CDP Water, your Company has achieved level A.

Your Company has committed to Science Based Target, an initiative to restrict average global temperature rise in alignment of Paris Climate Change Agreement. The Group is committed to become Carbon Neutral by 2040.

Dr. Anish Shah, Managing Director & CEO of your Company participated in the First Movers Coalition dialogue with US Special Presidential Envoy on Climate organised by World Economic Forum. He also attended CEO climate leaders meeting organized by World Economic Forum on building the net-zero economy and carbon removals.

 

The Sustainability performance for your Company for the Financial Year 2021-22 will be elaborated in detail in the GRI Report which is under preparation and will be ready for release shortly.

Your Company was recognized for its leadership position on the ESG dimensions during the year under review, by way of the following:

• Part of DJSI yearbook 2022. Top 15 percentile of an industry gets featured in the yearbook.

• Inclusion in CDP Supplier Engagement Leader Board 2021.

• Part of Power list of top 50 India''s Most Sustainable Companies 2021-22, by Business World.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure VII and forms part of this Report.

Share Capital

During the year under review, the Authorised Share Capital of the Company was increased from Rs. 4,075 crores divided into 810,00,00,000 Ordinary (Equity) Shares of Rs. 5 each and 25,00,000 Unclassified shares of Rs. 100 each to Rs. 10,575 crores divided into 1810,00,00,000 Ordinary (Equity) Shares of Rs. 5 each and 25,00,000 Unclassified shares of Rs. 100 each and 150,00,00,000 Preference Shares of Rs. 10 each pursuant to the Scheme of Merger by Absorption of Mahindra Vehicle Manufacturers Limited with the Company becoming effective from 1^st July, 2021.

The Authorised Share Capital of the Company further stands increased to Rs. 11,681.5 crores divided into 2031,30,00,000 Ordinary (Equity) Shares of Rs. 5 each and 25,00,000 Unclassified shares of Rs. 100 each and 150,00,00,000 Preference Shares of Rs. 10 each pursuant to the Scheme of Merger by Absorption of Mahindra Engineering and Chemical Products Limited, Retail Initiative Holdings Limited and Mahindra Retail Limited with the Company becoming effective from 29^th April, 2022.

The issued, subscribed and paid-up Share Capital of the Company stood at Rs. 621.60 crores as at 31^st March, 2022 comprising of 1,24,31,92,544 Ordinary (Equity) Shares of Rs. 5 each fully paid-up. There was no change in the issued, subscribed and paid-up Share Capital during the year under review.

Compliance with the provisions of Secretarial Standard 1 and Secretarial Standard 2

The applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ''Meetings of the Board of Directors'' and ''General Meetings'' respectively, have been duly complied by your Company.

Annual Return

Pursuant to section 134(3)(a) and section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, a copy of the annual return is placed on the website of the Company and can be accessed at https://www.mahindra.com/resources/FY22/AnnualReport.zip

The details of the Key Policies adopted by the Company are mentioned at Annexure VIII to the Board''s Report.

There was one proceeding initiated/pending against your Company under the Insolvency and Bankruptcy Code, 2016 which does not materially impact the business of the Company. The Company has filed its detailed reply and the matter is pending for final hearing.

Neither the Executive Chairman (upto 11^th November, 2021) nor the Managing Director nor the Executive Director (Automotive & Farm Sectors) received any remuneration or commission from any of the subsidiaries of your Company.

Your Directors state that no disclosure or reporting is

required in respect of the following items as there were

no transactions/events on these items during the year

under review:

1. I ssue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of Shares (including Sweat Equity Shares) to employees of the Company under any Scheme save and except Employees Stock Option Schemes (ESOS) referred to in this Report.

3. Significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and the Company''s operation in future.

4. Voting rights which are not directly exercised by the employees in respect of shares for the subscription/ purchase of which loan was given by the Company (as there is no scheme pursuant to which such persons can beneficially hold shares as envisaged under section 67(3)(c) of the Companies Act, 2013).

5. There has been no change in the nature of business of your Company.

6. The Company has not made any one-time settlement for loans taken from the Banks or Financial Institutions, and hence the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof is not applicable.

7. There was no revision of financial statements and Board''s Report of the Company during the year under review.

For and on behalf of the Board

ANAND G. MAHINDRA

Chairman

th

---

Mar 31, 2021

The Directors are pleased to present their Thirty-First Report together with the Audited Financial Statements of your Company for the Financial Year ended 31^st March, 2021.

The performance highlights and summarised financial results of the Company are given below:

PERFORMANCE HIGHLIGHTS

Consolidated income for the year increased by 1.5% to Rs. 12,170.5 Crores as compared to Rs. 11,996.5 Crores in 2019-20;

Consolidated income from operations for the year was Rs. 12,050.3 Crores as compared to Rs. 11,883.0 Crores in 2019-20, a growth of 1.4%;

Consolidated profit before tax for the year was Rs. 934.1 Crores as compared to Rs. 1,602.0 Crores in 2019-20;

Consolidated profit after tax and non-controlling interest for the year was Rs. 773.2 Crores as compared to Rs. 1,075.1 Crores in 2019-20.

FINANCIAL RESULTS

Â	CONSOLIDATED March 2021 March 2020		Rs. in Crores STANDALONE March 2021 March 2020
Total Income	12,170.5	11,996.5	10,516.8	10,245.1
Less: Finance Costs	5,307.6	5,390.6	4,733.2	4,828.8
Expenditure	6,046.4	4,902.9	5,241.4	3,954.3
Depreciation, Amortization and Impairment	150.5	146.9	125.9	118.3
Total Expenses	11,504.4	10,440.3	10,100.5	8,901.4
Profit before exceptional items and taxes	666.1	1,556.1	416.3	1,343.8
Share of Profit of Associates & Joint Ventures	39.5	45.9	-	-
Exceptional items	228.5	-	6.1	-
Profit Before Tax	934.1	1,602.0	422.4	1,343.8
Less: Provision for Tax
Current Tax	512.3	647.3	450.3	556.9
Deferred Tax	(340.9)	(129.9)	(347.5)	(119.6)
(Excess) / Short provision for Income Tax - earlier years	(17.6)	(1.2)	(15.5)	-
Profit After Tax for the Year	780.3	1,085.8	335.2	906.4
Less: Profit for the year attributable to Non-Controlling	7.1	10.7	Â	Â
interests	Â	Â	Â	Â
Profit for the year attributable to Owners of the Company	773.2	1,075.2	335.2	906.4
Balance of profit brought forward from earlier years	4,578.0	3,957.3	4,293.6	3,834.0
Add: Other Comprehensive Income/(Loss)	(18)	(14.7)	(2.4)	(11.3)
Add: Transfer from Debenture Redemption Reserve	-	223.7	-	223.7
Balance available for appropriation	5,349.4	5,241.4	4,626.4	4,952.8
Less: Appropriations
Dividend paid on Equity Shares (including tax thereon)	-	484.2	-	477.9
Transfer to Statutory Reserves	98.8	222.8	68.0	181.3
Add/Less: Other Adjustments:
Gross obligation at fair value to acquire non-controlling	35.4	43.6	Â	Â
interest	Â	Â	Â	Â
Changes in Group's Interest	(10)	-	-	-
Balance profit carried forward to balance sheet	5,285.0	4,578.0	4,558.4	4,293.6

TRANSFER TO RESERVES

The Company proposes to transfer an amount of Rs. 68.0 Crores to the Statutory Reserve. Further, the Board of your Company decided not to transfer any amount to the General Reserve for the year under review. An amount of Rs. 4,558.4 Crores is proposed to be retained in the Statement of Profit and Loss.

DIVIDEND

Your Directors are pleased to recommend a dividend of Re. 0.80 per Equity Share of the face value of Rs. 2 each, payable to those Members whose names appear in the Register of Members as on the Book Closure date. Dividend is subject to approval of Members at the ensuing Annual General Meeting and shall be subject to deduction of tax at source.

The Equity dividend outgo for the Financial Year 2020-21 would absorb a sum of Rs. 98.8 Crores.

The dividend pay-out is in accordance with the Company's Dividend Distribution Policy.

DIVIDEND DISTRIBUTION POLICY

The Dividend Distribution Policy, containing the requirements prescribed in Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is appended as “Annexure I” and forms part of this Annual Report.

The Dividend Distribution Policy can also be accessed on the Company's website at the web-link: https:// mahindrafinance.com/discover-mahindra-finance/ policies.

During the year, an amount of Rs. 7,13,234 being the unclaimed/unpaid dividend of the Company for the Financial Year ended 31^st March, 2013 was transferred in September, 2020 to the Investor Education and Protection Fund Authority.

OPERATIONS

The year under review has been one of the most challenging years both for your Company and its customers. The COVID-19 pandemic outbreak which began in the middle of March 2020 continued to impact the economy throughout the financial year 2020-21. The year was full of uncertainties with slowdown in activities on the ground. The world was introduced to the new normal of lockdowns, containment zones, work from home with restricted movements of people and goods. The nationwide transport system came to a grinding halt as Air, Train and Road travel got severely impacted. This was a never seen before situation which

brought the economic activities in the country to a virtual standstill. The impact of the pandemic led to closure of almost all the Company's offices, business and recovery touch points and completely stalled the field operations from the last week of March 2020. Operations gradually resumed in mid-May in offices pan-India. Your Company has been strictly adhering to lockdown announcements in accordance with the directives issued by the Central, State Government and Local Administration.

Your Company is primarily in the financing of Automobiles and Tractors and addresses customers who use these vehicles for earning their livelihood. Your Company remains a significant financier to its customers in semi-urban and rural geographies by providing a wide range of easy and affordable products and services designed to suit their cashflow cycles. Your Company expanded vide its channel connect with leading car dealers. Your Company has retained its leadership position in financing the Mahindra range of vehicles and tractors in addition to extending its lending to vehicles of other leading Auto Original Equipment Manufacturers (OEMs). Your Company has aggressively pursued financing of pre-owned vehicles and used tractors. The demand for both new and used automobiles for the second consecutive year saw a substantial dip due to subdued load factors, and supply side constraints leading to poor sentiments and thus a much lower demand. The overall business volumes continued to be low for the Company on the backdrop of certain segments like Taxi, school bus/ van, traders, tourist operators, contracting segments, sand & stone mining applications, etc., opting to refrain from purchasing new vehicles. This further led to overall lower disbursements by your Company. Simultaneously, the earnings of the customers covered in the above mentioned segments were severely impacted due to slowdown of the economy. Hence, the collections were also subdued during most parts of the year. The Regulator did provide timely moratorium which gave support to our customers by allowing them to defer the EMI's by a period of 6 months. A significant majority of our customers availed the benefit under this moratorium scheme. Your Company continued to partner with the customers during these difficult times and offered moratorium to all eligible customers. The agricultural sector was relatively less impacted as monsoons, water levels, yields, support prices were above average and hence resulted in decent farm based cashflows. The second half of the year witnessed some amount of normalcy returning to the market with unlocking of the country. This led to better collection efficiencies starting December 2020. The Government supported Emergency Credit Line Guarantee Scheme (ECLGS) was offered to all eligible customers in the second half of the fiscal to mitigate the difficulties of vehicle users in commercial applications. A few of your Company's

customers took benefit of this scheme to lubricate their working capital.

The Business model got stress-tested for an elongated period of extreme uncertainty on an all-India basis. The flexibility and the elasticity of the model is demonstrated by the return of near normal disbursements and high collection efficiencies in the fourth quarter, as the pandemic started easing out.

Building Blocks for Growth, Efficiency, Customer Experience

A.    Deeper Physical Reach

Your Company has an extensive pan-India distribution network with 1,388 offices spanning across 27 States and 7 Union Territories as of 31^st March, 2021. During the year under review, your Company enhanced its footprint into deeper rural pockets by adding another 156 new branches in its network towards the year-end. Your Company's widespread office network reduces its reliance on any one region in the country. The geographic diversification also mitigates some of the regional, climatic, and cyclical risks, such as heavy monsoons or droughts. In addition, the Company's extensive office network benefits from a decentralized approval system, which allows each office to grow its business organically as well as leverage its customer relationships by offering multiple financial products including distribution of insurance products and mutual funds. Your Company services multiple products through each of its offices, which reduces operating costs and improves total sales. Your Company believes that the challenges inherent in developing an effective office network in rural and semiurban areas have also created opportunities of catering to the diverse financial requirements of its customers by identifying and understanding the needs and aspirations of the people.

B.    Enhancing Digital Reach

Your Company has an enhanced on-line and in-mobile presence to provide a superior digital experience to its customers. Employees, customers and partners are being enabled digitally for all their needs and substantial progress has been made in this direction. Today, the entire lending process is digitally enabled, which has facilitated the EMI collections being received through Digital and on-line means. This year also saw that the challenge posed by the pandemic for collections was to an extent mitigated when customers extensively used our online and App based Digital Channels for making their monthly repayments. In the last quarter of the

fiscal, the total amount collected from the customers by digital means had gone up by 94% compared to the last quarter of the previous year. Your Company and its subsidiaries have embraced digital in performing different activities like customer acquisition, digitally enabled collections, offering Fixed Deposits, Mutual Funds and Insurance products.

C.    Leveraging Technology

Information Technology has enabled the automation and digitisation of processes across the organisation, empowering employees with the workflows and knowledge for efficiency and controls, and engendering newer business products, analytical models, and decision-making tools. The Company's digital channels of multi-lingual website, mobile app, and contact centre too are increasingly popular with the customers. Your Company has successfully leveraged enterprise technology platforms such as enterprise service bus, customer relationship management, mobile application management, data lake and business intelligence. It is at an advanced stage in upgrading its Loan Origination System and Loan Management System capabilities to meet the future growth requirements and to be able to seamlessly service its large customer base and partners in the rural and semi-urban geographies.

D.    Data as Competitive Advantage

Your Company's presence in the rural and semi-urban markets for more than 25 years, working with several profiles gives your Company a huge advantage, in applying Analytics and Artificial Intelligence (AI) on the data leading to customized personalized offerings that are designed and delivered with speed and lower risks. Your Company has launched its proprietary algorithms to offer faster loan approvals at dynamic interest rates to low risk customers which would help in gaining market share, improving portfolio quality and profitability. Customer acquisition, retention, cross selling, and collections will be substantially enhanced with the combined Integrated activation of Digital, Analytics and Technology.

E.    Growth Drivers for Future

Your Company is having several plans to expand its offerings to its customers for growth. Pre-owned Vehicles, used tractors and commercial vehicles have a large opportunity for growing within the vehicle segments while growing the market share for the Company's existing range of products.

Meeting the Non-vehicle Financial needs of customers in the rural and semi-urban regions is another area of opportunity. Products like Personal Loans, Consumer Loans, Farm Related Working Capital Loans, etc., will have a growth focus targeting our large existing customer bases as well as new customers. For this purpose, the Company has formed a strategic business unit (SBU) for its Fintech vertical which will focus on digital lending.

Leasing as a method of Specialized Financing of certain customer segments for both vehicle and beyond is also being set up. Leasing offers an emerging opportunity and will aid in expanding the Financing portfolio in the medium and long term.

SME Lending

The SME lending faced significant head winds during the year due to weak economic environment and slowdown in the auto segment. The COVID-19 pandemic resulted in disruptions across businesses and SMEs also underwent significant stress. As a matter of abundant caution, your Company curtailed disbursements in significantly stressed sectors and supported deserving clients with good track record. Consequently, the Assets Under Management as of March 2021 has de-grown by 34% in comparison to March 2020. Further, your Company focused on strengthening its systems to reduce risk and enhance customer centricity. Your Company also strengthened its product offerings and broadened its tie-ups with more OEMs. It is expected that with these measures your Company would be able to grow its book significantly once the economic activity picks up.

The total value of assets financed stood at Rs. 25,248.9 Crores as compared to Rs. 42,388.2 Crores in the previous year. Total Income grew by 2.7% at Rs. 10,516.8 Crores for the year ended 31^st March, 2021 as compared to Rs. 10,245.1 Crores for the previous year. Profit Before Tax (PBT) declined by 68.6% at Rs. 422.4 Crores as compared to Rs. 1,343.8 Crores for the previous year. Profit After Tax (PAT) declined by 63.0% at Rs. 335.2 Crores as compared to Rs. 906.4 Crores in the previous year. During the year under review, the Assets Under Management stood at Rs. 81,689 Crores as at 31^st March, 2021 as against Rs. 77,160 Crores as at 31^st March, 2020, a growth of 5.9%.

Despite the most difficult times the Gross Stage 3 loan assets stood at an absolute level of Rs. 5,786 Crores, almost the same as that on 31^st March, 2020 (Rs. 5,747 Crores). This was a resilient performance given the backdrop of tough macro conditions and severe logistical issues. However, as the disbursements slowed down in the aftermath of COVID-19 outbreak, the Gross Non-Performing Assets were at 9.0% of closing loan assets as on 31^st March,

2021, a tad higher against 8.4% as on 31^st March, 2020. The Company continued to reassess its credit exposures and made additional ECL overlay even during the year, which stood at Rs. 996 Crores as on 31^st March, 2021 as against Rs. 574 Crores as on 31^st March, 2020. Further, in accordance with the regulatory expectation of the Reserve Bank of India to bring down the Net Non-Performing Asset (NPA) ratio below 4%, the Company recorded an additional provision of Rs. 1,320 Crores during the fourth quarter on Stage 3 loans. Resultantly, the Net NPA ratio of the Company stood at 3.97% as at 31^st March, 2021 as against 5.98% as on 31^st March, 2020. The Stage 3 provisioning coverage ratio stood at 579% as compared to 31% in the previous year.

There has been no change in the nature of business of the Company during the year under review.

FINANCIAL PRODUCTS DISTRIBUTION

During the year under review, your Company has initiated activities to increase the sale of Third Party Products to its customers and increased the fee income of the Company. As a green initiative measure and for the convenience of its investors, your Company has recently launched an Investment portal to enable them to transact in Mutual Funds as well as Fixed Deposits of the Company. The portal is available on the website of the Company under the Investment tab. With the launch of this Investment Solutions portal, your Company aims to increase the sales of third party investment products via the digital route along with other channels such as its branch network and a dedicated team to sell these products to its clients.

The Company's Assets under Management for distribution of Mutual Fund Products (MFP) as on 31^st March, 2021 stood at Rs. 2,900 Crores, which grew 109% as compared to the AUM as on 31^st March, 2020. Further, sales of other Third Party Products such as mutual funds, insurance, bonds & debentures, etc., grew from Rs. 309 Crores in FY 2019-20 to Rs. 482 Crores in FY 2020-21, recording a growth of 56% over the corresponding period in the previous year. Your Company has also implemented a customer service process as well as a process for evaluation and recommendation of Mutual Fund schemes. All these initiatives will lead to an increase in fee based income in the coming years.

MORATORIUM OF LOANS

As mentioned in the previous Annual Report and in accordance with the Board approved Moratorium Policy read with the Reserve Bank of India ('RBI') guidelines dated 27^th March, 2020, 17^th April, 2020 and 23^rd May, 2020 relating to 'COVID-19 - Regulatory Package', your Company has granted moratorium up to six months on the payment of installments which became due between 1^st March,

2020 and 31^st August, 2020 to all eligible borrowers. This relaxation did not automatically trigger a significant increase in credit risk. During the year under review, 81% of the customers have availed of the moratorium facility offered by the Company.

The Government of India, Ministry of Finance, vide its notification dated 23^rd October, 2020, had announced COVID-19 Relief Scheme ('the Scheme') for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts as per the eligibility criteria and other aspects specified therein and irrespective of whether the RBI moratorium was availed or not. Accordingly, your Company has credited an ex-gratia amount of Rs. 110.27 Crores in the accounts of the eligible borrowers. The Company filed a claim with the State Bank of India for reimbursement of the said ex-gratia amount as specified in the notification and has received an amount of Rs. 109.28 Crores towards the same on 31^st March, 2021.

Further, in connection with the judgment of the Hon'ble Supreme Court of India in the matter of Small Scale Industrial Manufacturers Association vs LIOI & Ors. and other connected matters dated 23^rd March, 2021 and as advised by RBI vide its Circular No. RBI/2021-22/17 DOR. STR.REC.4/21.04.048/2021-22 dated 7^th April, 2021, and the Indian Banks' Association ('IBA') advisory letter dated 19^th April, 2021, your Company has put in place a Board approved Policy to refund/ adjust the 'interest on interest' charged to the borrowers, not covered under the Ex-gratia Scheme, for the moratorium period i.e. 1^st March, 2020 to 31^st August, 2020. The Company has made an estimated provision of Rs. 31.75 Crores as on 31^st March, 2021 towards this.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with the applicable provisions of the Master Direction issued by the Reserve Bank of India and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a detailed analysis of the Company's performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

CORPORATE GOVERNANCE

Your Company practices a culture that is built on core values and ethical governance practices. Your Company is committed to transparency in all its dealings and places high emphasis on business ethics.

In accordance with the applicable provisions of the Master Direction issued by the Reserve Bank of India and the

Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance along with a Certificate from Messrs. KSR & Co., Company Secretaries LLP regarding compliance with the conditions of Corporate Governance as stipulated in Regulations 17 to 27, clauses (b) to (i) of sub-regulation (2) of Regulation 46 and paragraphs C, D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of the Annual Report.

SHARE CAPITAL

The Members at their Extraordinary General Meeting held on 30^th June, 2020, have approved the increase in the Authorised Share Capital of the Company from Rs. 190,00,00,000 (Rupees One Hundred Ninety Crores) divided into 70,00,00,000 (Seventy Crores) Equity Shares of Rs. 2 (Rupees Two) each of the Company and 50,00,000 (Fifty Lakhs) Redeemable Preference Shares of Rs. 100 (Rupees Hundred) each of the Company to Rs. 550,00,00,000 (Rupees Five Hundred Fifty Crores) divided into 250,00,00,000 (Two Hundred Fifty Crores) Equity Shares of Rs. 2 (Rupees Two) each of the Company and 50,00,000 (Fifty Lakhs) Redeemable Preference Shares of Rs. 100 (Rupees Hundred) each of the Company by creation of additional 180,00,00,000 (One Hundred Eighty Crores) Equity Shares of Rs. 2 (Rupees Two) each.

Rights Issue of Equity Shares

During the year under review, your Company has allotted

61.77.64.960    Equity Shares of the face value of Rs. 2 each for cash at a price of Rs. 50 per Equity Share (including premium of Rs. 48 per Share) in the ratio of 1 (one) Rights Equity Share for every 1 (one) fully paid-up Equity Share of the Company, held by the eligible Equity Shareholders on the Record Date i.e. 23^rd July, 2020. The Issue opened on 28^th July, 2020, and closed on 11^th August, 2020. The Rights offering by your Company received a very satisfactory response, as seen by the high levels of subscription and strong participation from Shareholders and investors, and was over-subscribed approximately by 1.3 times of the Issue Size. The Company received the approval from Stock Exchanges for listing on 19^th August, 2020 and trading of Rights Equity Shares on 20^th August, 2020.

The proceeds from the Rights Issue have been fully utilised for the objects of the Rights Issue as mentioned in the Letter of Offer filed with the Securities and Exchange Board of India.

Consequently, pursuant to the allotment of Rights Shares on 17^th August, 2020, the issued, subscribed and paid-up Equity Share Capital of the Company stands increased from

61.77.64.960    Equity Shares to 123,55,29,920 Equity Shares of the face value of Rs.2 each, fully paid-up.

 

2020, an improvement of 1.1 percent over the previous prediction in October 2020. The silver lining remains the development and growing coverage of the vaccines which is lifting the sentiment.

The progress of the virus has been slowed with the help of social distancing, increase in availability of vaccines and treatment protocols. However, the health infrastructure of many countries is reeling under the pressure of second and third wave. New restrictions are introduced in countries facing such challenges indicating the recovery to be uneven and still in some distance.

Outlook

The global growth projected is at 6.0 percent in 2021, which thereafter moderates to 4.4 percent in 2022. A lot of this shall depend upon the path of health crisis and the coordinated policy actions taken to limit economic damage. The growth for advanced economies is projected at 5.1 percent in 2021 [vis-a-vis de-growth of -4.7% in 2020] compared to a growth of 6.7 percent in 2021 for emerging and developing economies [vis-a-vis de-growth of -2.2% in 2020].

With varied outlook for different countries, the macro policy objectives still remain as the need to overcome the existing health crisis and returning employment to normal levels. The expectation based on availability of vaccines suggest local transmission to reduce everywhere by end of 2022.

Domestic Economy

The scenario in the Indian economy is much like many other countries where a gradual improvement in macro indicators has been seen. The positives include the resilience demonstrated in rural demand which remained buoyant and had record agriculture production in FY 2020-21. Urban demand has gained strength on the backdrop of normalization of business activity.

The anticipated improvement in economic activity is however held back with new mutations resulting in renewed jump in COVID-19 cases. Associated local lockdowns, which are now prevalent in many States, shall dampen demand for contact intensive services, restrain growth and prolong the return to normalcy. The silver lining remains the expectation of normal monsoon in the current year.

RBI projects the real GDP growth for FY 2021-22 to be at 10.5 percent. These growth expectations may undergo a change as the decisions on lockdowns have increased across States with the number of cases in the second wave now surpassing the numbers during those seen in the previous peak.

[Source: IMF, RBI]

 

The issued, subscribed and paid-up Equity Share Capital as on 31^st March, 2021 was Rs. 247.11 Crores, comprising 123,55,29,920 Equity Shares of the face value of Rs. 2 each, fully paid-up.

During the year, the Company has not issued any sweat equity shares or equity shares with differential voting rights.

As on 31^st March, 2021, none of the Directors of the Company holds instruments convertible into Equity Shares of the Company.

STOCK OPTIONS

During the year under review, no Options were granted to Eligible Employees under the Mahindra & Mahindra Financial Services Limited Employees' Stock Option Scheme-2010 [“2010 Scheme”]. The Company does not have any scheme to fund its employees to purchase the shares of the Company. No employee has been issued stock options during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant.

The 2010 Scheme of the Company is in compliance with the Securities and Exchange Board of India [Share Based Employee Benefits] Regulations, 2014 [“SBEB Regulations”] and there were no material changes made to the said Scheme. A Certificate from Messrs. B S R & Co. LLP, Chartered Accountants, Statutory Auditors of the Company, pursuant to Regulation 13 of the SBEB Regulations would be available for inspection by the Members through electronic mode.

Voting rights on the Shares issued to employees under the aforesaid Scheme are either exercised by them directly or through their appointed proxy.

The details of the Employees' Stock Options and the Company's Employees' Stock Option Trust as required under the SBEB Regulations read with SEBI Circular CIR/CFD/ POLICY CELL/2/2015 dated 16^th June, 2015 have been uploaded on the Company's website and can be accessed at the web-link: https://mahindrafinance.com/investor-zone/financial-information.

ECONOMY

Global and Domestic Growth

With completion of one year of the pandemic, the work lying before administrations to provide health care and vaccines continues to remain daunting. The human toll and loss of economic activity caused by the pandemic is unprecedented which could have been much worse, but for the timely intervention and policy support provided across administrations. The global economic activity is estimated to have contracted by -3.3 percent in Calendar Year [CY]

Finance

During the first eight months of the year under review (Apr-Nov 2020), Retail price inflation continued to be higher than the RBI's upper margin of 6%. It fell sharply in November 2020 with food inflation coming down and has since moved up again but within the RBI's upper margin. Having reduced policy repo rate in the first quarter of FY 2021 from 4.40% to 4.00%, the RBI since then, has maintained status quo in the key policy rates, along with continuing an accommodative stance until necessary to sustain growth on a durable basis.

The Government of India and the Reserve Bank of India have taken a series of actions during the year which has assisted the financial sector including the NBFC industry to wither the pandemic storm. These included, amongst others, reducing the benchmark rates, announcing moratorium for six months, restructuring scheme for a set of eligible borrowers and long-term repo operations to make easier access to liquidity. These actions led to stabilization of the financial sector with significant liquidity buffers being maintained across companies.

At the start of the fiscal year [April 2020), 10-year G-Sec benchmark yields (6.45% GS 2029), was trading at 6.14% levels. The new benchmark (5.85% GS 2030) closed the year at 6.18%. The yields during the year remained range bound as policy actions aimed at ensuring steady supply of funds. During the year, the INR appreciated by 2.5 percent from INR 75.39 to INR 73.50 per USD after a sharp depreciation of 9.0 percent during the previous year.

Your Company has been identified as a “Large Corporate” under the framework provided by the Securities and Exchange Board of India and accordingly, has ensured that more than 25% of its incremental borrowings during the year was by way of issuance of Debt securities.

During the year under review, your Company continued with its diverse methods of sourcing funds in addition to regular borrowings like Secured and Unsecured Debentures, Term Loans, Fixed Deposits, Commercial Papers, etc., and maintained prudential Asset Liability match throughout the year. Your Company sourced long-term debentures and loans from banks and other institutions at attractive rates. Your Company continues to expand its borrowing profile by tapping into new lenders and geographies.

During the year, your Company has successfully completed 3 securitisation transactions aggregating to Rs.5,120.30 Crores and raised JPY 15 billion (Rs. 1,063.50 Crores) through External Commercial Borrowings.

Private Placement Issues of Non-Convertible Debentures

During the year under review, your Company issued Secured/Unsecured Redeemable Non-Convertible Debentures including Secured Redeemable Principal Protected Non-Convertible Market Linked Debentures (“NCDs”) and raised an amount aggregating to Rs. 4,815.90 Crores on a private placement basis, in various tranches. The NCDs are listed on the debt market segment of the BSE Limited.

Details of all the above-mentioned issues were provided to the Board on a periodic basis.

As specified in the respective offer documents, the funds raised from NCDs were utilised for various financing activities, onward lending, to repay existing indebtedness, working capital and general corporate purposes of the Company. Details of the end-use of funds were furnished to the Audit Committee on a quarterly basis.

The Company is in compliance with the applicable guidelines issued by the Reserve Bank of India, as amended from time to time.

The Company has been regular in making payments of principal and interest on all the NCDs issued by the Company on a private placement basis and through public issue. There are no NCDs which have not been claimed by investors or not paid by the Company after the date on which the NCDs became due for redemption.

Commercial Paper

As at 31^st March, 2021, the Company had Commercial Paper (CPs) with an outstanding amount (face value) of Rs. 500 Crores. CPs constituted 0.8% of the outstanding borrowings as at 31^st March, 2021. The CPs of the Company are listed on the debt market segment of the National Stock Exchange of India Limited.

Rupee Denominated Medium Term Note

Under the Company's Medium Term Note Programme, the Company has not raised any funds through Rupee denominated bonds during the year.

INVESTOR RELATIONS

Your Company has done multiple interactions with Domestic and International investors/analysts during the current year. Given the ongoing pandemic, all such meetings were

done through use of technology i.e. conference calls, videoconferencing. Your Company attended multiple investor meets organised by reputed Global and Domestic Broking Houses during the year, to communicate details of its performance, important regulatory and market developments and exchange of information. Roadshows were held during the year with Domestic and International investors on the backdrop of the Rights Issue undertaken to strengthen the Capital Adequacy. Quarterly and annual earnings calls were scheduled through structured conference calls to keep various stakeholders informed about the past performance and future outlook of the industry, especially those having a bearing on the Company. These interactions with institutional shareholders, fund managers and analysts are based on generally available information that is accessible to the public on a non-discriminatory basis. Your Company uploads the transcript of the quarterly earnings calls on its website which can be accessed by existing and potential investors and lenders. Your Company shall continue to make effective

Your Company believes in transparent communication and building a relationship of mutual understanding and trust. Your Company further ensures that critical information about the Company is available to all the investors by hosting such information on the Company's website.

CAPITAL ADEQUACY

As on 31^st March, 2021, the Capital to Risk Assets Ratio (CRAR) of your Company was 26.0% which is well above the minimum requirement of 15% CRAR prescribed by the Reserve Bank of India.

Out of the above, Tier I capital adequacy ratio stood at 22.2% and Tier II capital adequacy ratio stood at 3.8% respectively.

RBI GUIDELINES

The Company continues to comply with all the applicable regulations prescribed by the Reserve Bank of India (“RBI”), from time to time.

CREDIT RATING

Your Company believes that its credit rating and strong brand equity enables it to borrow funds at competitive rates. The credit rating details of the Company as on 31^st March, 2021 were as follows:

Rating Agency	Type of Instrument	Credit Rating*	Remarks
India Ratings & Research Private Limited	Commercial Paper Programme and Bank Facilities (Fund/Non-Fund Based Working Capital Limit)	IND A1 +	The 'A1'+ rating indicates the Highest Level of Rating. Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
Â	Long-term (incl. MLD) Debt instruments, Subordinated Debt Programme and Bank Facilities (Fund/Non-Fund Based Working Capital Limit)	IND AAA/Stable IND PP-MLD AAA emr/Stable	The 'AAA' ratings denote the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. 'PP-MLD' refers to Principal Protected Market Linked Debentures.
Â	Â	Â	Suffix "emr” denotes the exclusion of the embedded market risk from the rating.
CARE Ratings Limited	Long-term Debt Instruments and Subordinated Debt Programme	CARE AAA/Stable	The 'AAA' ratings denote the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk.
Brickwork Ratings India Private Limited	Long-term Subordinated Debt Programme	BWR AAA/Stable
CRISIL Ratings Limited	Fixed Deposit Programme	CRISIL FAAA/ Stable	Â
Â	Commercial Paper Programme and Bank Loan Facilities	CRISIL A1 +	The 'A1'+ rating indicates the Highest Level of Rating. Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
Â	Long-term Debt Instruments, Subordinated Debt Programme and Bank Loan Facilities	CRISIL AA+/ Stable	The 'AA+' rating indicates a high degree of safety with regard to timely payment of financial obligations. Such instruments carry very low credit risk.

ACHIEVEMENTS

Awards/Recognition received by your Company during the year are enumerated hereunder:

Marketing:

Won the Silver Award in the category of 'New on ground property of the year' at the Rural Marketing Association of India [Flame Awards] for the Gram Pravesh initiatives of the Company.

CSR & Sustainability:

Included in the renowned FTSE4Good Index Series for the second year.

Ranked 48^th amongst Top 100 Indian companies for Sustainability & CSR under Responsible Business Rankings 2020 by Futurescape.

Attained performance band: B in the Carbon Disclosure Project Assessment 2019-20.

Included in 'DJSI Sustainability Yearbook 2021'

Human Resources:

Recognized among “India's Best Workplaces in Career Management 2020” by Great Place to Work® Institute.

FIXED DEPOSITS AND LOANS/ ADVANCES

Your Company offers a wide range of Fixed Deposit schemes that cater to the investment needs of various classes of investors. These Deposits carry attractive interest rates with superior service enabled by robust processes and technology. In order to tap rural and semi-urban savings, your Company continues to expand its network and make its presence felt in the most remote areas of the country.

During the year, CRISIL has reaffirmed a rating of 'CRISIL FAAA/Stable' for your Company's Fixed Deposits. This rating represents the highest degree of safety regarding timely servicing of financial obligations and carries the lowest credit risk. Your Company's Deposits continue to be a preferred investment amongst the investors.

As on 31^st March, 2021, your Company has mobilised funds from Fixed Deposits to the tune of Rs. 9,481.16 Crores, with an investor base of over 1,96,278 investors.

Your Company continues to serve the investors by introducing several customer centric measures on an ongoing basis to further strengthen its processes in sync with the requirements of the Fixed Deposit holders. The

Company periodically communicates various intimations via SMS, e-mails, post, courier, etc., to its investors as well as sends reminder emails to Depositors whose TDS is likely to be deducted before any pay-out/accrual. Your Company also provides a digital platform for online application/renewal of deposits, online generation of TDS certificates from customer/broker portal and seamless investment process for employees.

During the year under review, your Company has rolled out several initiatives aimed at offering a superior customer experience. Some key ones are:

An integrated web portal has been developed to facilitate online application/online renewal of Fixed Deposits, Loan against FDs, profile updates, etc.

Online submission of Forms 15 G/15H by all eligible Depositors through the FD Customer portal is made available on the Company's website.

TDS certificate^] are made available in the Customer portal and Broker portal, in addition to the same being sent to the concerned Depositors, from time to time.

In order to offer various payment options to Depositors, more payment gateways have been added across various FD investment portals.

An advanced version of Customer Relationship Management [CRM] has been launched to record the queries, requests and complaints for future data analysis in order to enhance customer service.

An integrated service portal [E-Sarathi] has been introduced to address the queries of Depositors routed through the Channel Partners on real-time basis during working hours.

The process of recording Central Know Your Customer [CKYC] details of the Depositors has been strengthened by introducing various control measures.

As at 31^st March, 2021, 6,052 Deposits amounting to Rs. 5.41 Crores had matured for payment and remained unclaimed. The unclaimed Deposits have since reduced to 5,882 Deposits amounting to Rs. 5.17 Crores. There has been no default in repayment of Deposits or payment of interest during the year.

Your Company being a Non-Banking Financial Company, the disclosures required as per Rule 8 [5] [v] and [vi] of the Companies [Accounts] Rules, 2014 read with Sections 73 and 74 of the Companies Act, 2013, are not applicable to it.

The information pursuant to Clause 35[1] of Master Direction DNBR.PD.002/ 03.10.119/2016-17 dated 25^th

August, 2016 issued by the Reserve Bank of India on Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016, regarding unpaid/unclaimed public deposits as on 31^st March, 2021, is furnished below:

i.    total number of accounts of Public Deposits of the Company which have not been claimed by the depositors or not paid by the Company after the date on which the deposit became due for repayment: 6,052.

ii.    total amounts due under such accounts remaining unclaimed or unpaid beyond the dates referred to in clause (i) as aforesaid: Rs. 5,41,47,729.

Depositors were intimated regarding the maturity of deposits with a request to either renew or claim their Deposits. Your Company regularly sends letters/reminders via email to all those Fixed Deposit holders whose Deposits have matured as well as to those whose Deposits remain unclaimed. Where the Deposit remains unclaimed, followup action is also initiated through the concerned agent or branch.

Pursuant to Section 125(2) (i) of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('the IEPF Rules') as amended from time to time, matured Deposits remaining unclaimed for a period of seven years from the date they became due for payment are required to be transferred to the Investor Education and Protection Fund (IEPF) Authority established by the Central Government. Further, interest accrued on the matured deposits which remain unclaimed for a period of seven years from the date of payment will also be transferred to the IEPF under Section 125(2) (k). The concerned depositor can claim the Deposit and/or interest from the IEPF Authority by following the procedure laid down in the IEPF Rules.

During the year, an amount of Rs. 011 Crores has been transferred to the IEPF Authority.

During the year under review, the Company has not given any loans and advances in the nature of loans to its subsidiaries or associate(s) or loans and advances in the nature of loans to firms/companies in which Directors are interested.

Accordingly, the disclosure of particulars of loans/advances, etc., as required to be furnished in the Annual Accounts of the Company pursuant to Regulations 34 (3) and 53 (f) read with paragraph A of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable to the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS IN SECURITIES

Pursuant to Section 186(11) of the Companies Act, 2013 (“the Act”), the provisions of Section 186(4) of the Act requiring disclosure in the Financial Statements of the full particulars of the loans made and guarantees given or securities provided by a Non-Banking Financial Company in the ordinary course of its business and the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient of the loan or guarantee or security are exempted from disclosure in the Annual Report.

Further, pursuant to the provisions of Section 186(4) of the Act, the details of investments made by the Company are given in the Notes to the Financial Statements.

SUSTAINABILITY INITIATIVES

Sustainability has been deeply embedded in the Company's business model from the very beginning. At the heart of our organizational strategy is an inclusive business model which enables the residents of semi-urban and rural India to access formal channels of credit/finance, helping them create long-term value. In line with the Mahindra Group's motto: 'Rise for Good' your Company is also gearing up to be future ready by making sustainability and climate change an integral part of the business strategy and risk framework. Your Company has been enabling customers to meet their aspirations through a diversified portfolio of financial product offerings. It helps people build their homes through affordable housing finance solutions provided by Mahindra Rural Housing Finance Limited, secure their life and assets with insurance solutions facilitated by Mahindra Insurance Brokers Limited and offers investment options through its asset management subsidiary Mahindra Manulife Investment Management Private Limited. By providing the right set of opportunities and prospects in the remote areas, your Company has helped customers to forge ahead. The Company lays strong emphasis on customer centricity. Its customer base is spread across more than 3.80 lakh villages in India, with majority of them belonging to the 'Earn and Pay' segment.

Your Company commenced its journey towards reporting sustainability performance in 2008-09 through Mahindra Group's Sustainability Report and in the year 2012-13 the Company released its first standalone Sustainability Report. In FY 2019-20, the Company released its Eighth Sustainability Report with the theme “Positive & Promising”. The Report adheres to the Global Reporting Initiative's (GRI) Standards and is based on the Integrated Reporting framework. The Report is externally assured by KPMG.

The Content index has been checked by GRI and carries the GRI logo. FY 2019-20 was truly a year of building sustainable resilience for the Group Financial Services Sector. The “Positive & Promising” theme of the Report shows that despite a variety of challenges through the year, the Company collectively stayed true to its core purpose and values, helping its customers, teams and communities realize their true potential.

This Report is hosted on the Company's website and can be accessed at: https://mahindrafinance.com/ media/383687/mahindra-finance-sustainability-report-2019-20.pdf.

Your Company continued to focus on integrating Sustainability into the business practices and on building awareness for different stakeholders by taking various initiatives to engage them. In FY 2018-19, your Company became the 1^st Financial Company in India to be committed towards call to action for Science Based Targets.

The Science Based Targets initiative (SBTi) requires companies to publicly commit to setting carbon emission reduction targets that are in line with climate science.

Your Company was recognized for its Sustainability initiatives during the year under review, with the following accolades:

Included in the renowned FTSE4Good Emerging Markets Index series for ESG Performance for the 2^nd time. FTSE4Good is an equity index series that is designed to facilitate investment in companies that meet globally recognised corporate responsibility standards. It is designed to measure the performance of companies demonstrating strong Environmental, Social and Governance practices.

Ranked 48^th amongst Top 100 Indian companies for Sustainability & CSR under Responsible Business Rankings 2020 by Futurescape.

Included in the 'Dow Jones Sustainability Indices' Sustainability Yearbook 2021 (the only Indian Company among the Diversified Financial Services Companies to feature in the same).

Attained performance band “B” in the Carbon Disclosure Project (CDP) assessment 2020-21, greater than the Sector average and Asia Regional average.

Selected as the winner of the 'The Mahindra Group Sustainability Performance Award, 2020'.

Your Company's approach has been to make its environmental disclosure transparent, and accordingly,

 

it has been reporting disclosures and reports on its performance through the Carbon Disclosure Project (CDP) India since Financial Year 2011-12.

Sensitising the employees to a novel concept such as Sustainability has been one of the key initiatives of the Company during the year. Capacity building on Sustainability has been driven by Sustainability Courses on the learning platform. The Company launched a module on Human Rights in the reporting year and made it mandatory for all the employees. The Mahindra Group and the United Nations have partnered to offer a Course on Climate change for its employees.

During the year, your Company made proactive efforts to reduce CO2 emissions (carbon footprint) through Project “Mahindra Hariyali” by planting more than 30,000 saplings throughout the country.

Your Company is gearing up to be future ready by making sustainability and climate change an integral part of its risk framework and taking measures to mitigate and manage them. In the reporting year, the Company has enhanced its existing Risk Register by including applicable Climate change risks. Weather reports are assessed on a regular basis and aligned with business operations to protect the customers and minimize the risk impact. The outlook for the future has been positive and your Company is well equipped to enable its customers and communities to progress through its inclusive and sustainable business model.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report (“BRR”) of your Company for the year 2020-21 forms part of this Annual Report as required under Regulation 34(2)(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is appended as “Annexure II”.

Your Company is building an inclusive organisation by empowering all the stakeholders and facilitating their contribution towards growth that is both holistic and long term. Through the inclusive business model, your Company endeavours to cater to the bottom of the pyramid in the rural and semi-urban areas, enabling them to earn their livelihood through varied financial products and services. Your Company has always been conscious of its role as a responsible corporate citizen. Through its wide network of branches with locally-recruited employees, strong and lasting relationships with its stakeholders, large customer base, vast experience and market knowledge, your Company is providing financial resources to underserviced regions of the country.

The BRR can also be accessed on the Company's website at: https://mahindrafinance.com/discover-mahindra-finance/sustainability.

INTEGRATED REPORTING

Your Company is pleased to present its first Integrated Report, which encompasses both financial and non-financial information to enable Members to have a more holistic understanding of the Company's long-term perspective. This Integrated Report forms part of the Annual Report and is in consonance with the SEBI Circular dated 6^th February, 2017 An Integrated Report takes corporate reporting beyond just discussing the financial resources, since any value creation activity requires other resources like people, natural resources and business relationships.

The Integrated Annual Report for the year 2020-21 includes details such as the organisation's strategy, governance framework, performance and prospects of value creation based on the six (6) forms of capital viz. financial capital, manufactured capital, intellectual capital, human capital, social and relationship capital and natural capital.

The Integrated Annual Report for the year 2020-21 is hosted on the Company's website and can be accessed at the web-link: https://www.mahindrafinance.com/investor-zone/financial-information/

Since 2012-13, the Company has been annually publishing a Sustainability Report conforming to the guidelines of the Global Reporting Initiative ("GRI”). These Reports adhere to the GRI standards and are based on the Integrated Reporting framework and have been externally assured. This year the Sustainability Report has been combined with the Integrated Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

With a vision to transform rural and semi-urban India into a self-reliant, flourishing landscape, Mahindra Finance started its journey in 1991 and grew into a leading NBFC with an employee base of around 20,000 employees all over India. By supporting about 23 NGOs and implementing partners in the areas of Education & Livelihood, Healthcare and Environment, the Company strives to become an asset in the communities where it operates. Your Company's Corporate Social Responsibility ['CSR'] initiatives are aligned with the mission of transforming rural lives and hence focus on areas such as Education & Livelihood, Healthcare and Environment.

In FY 2021, to consolidate and further strengthen its endeavor to support drivers, your Company launched its flagship program-"SWABHIMAAN a holistic driver development program”.

This program is initiated to address the professional, financial, and familial challenges faced by the drivers and their families and further contribute to their overall wellbeing. This multi-year program aims to benefit over 75,000 beneficiaries through key interventions focusing on various aspects of a driver's life. Your Company will provide driver's training to freshers, road safety training to existing drivers, auto mechanic training to women, financial planning workshops, accidental and health insurance policy to drivers and award scholarships to driver's children.

Your Company continued its support to People with Disabilities [PwDs] by training them under 'Hunnar' program in various skills in BFSI, hospitality and ITES sectors to enhance their employability. 365 people with disabilities were trained and 274 were placed in jobs. The Company also conducted awareness campaigns about sanitation and hygiene under Healthcare and Swachh Bharat initiatives.

Reaffirming its commitment to the cause of education, your Company continued its support to the Nanhi Kali Program which has benefitted over 10,800 underprivileged girl children from socially and economically marginalized families living in urban, rural, and tribal parts of India. Your Company, to promote inclusive socio-economic growth of the marginalized youth, continued its support to Mahindra Pride School which skilled 1,822 youth and 100% have been placed. Further, Mahindra Pride Classrooms supported an additional 20 hours of online training to 30,627 final year students covering English Speaking, Life Skills, Aptitude, Interview, Group Discussion and Digital Literacy through Polytechnics and Arts & Science Colleges.

To continue with its commitment to increase the green cover, your Company's employees participated in the Mahindra Hariyali project. Employees from most of the branches, planted more than 30,000 saplings in selected locations.

Your Company provided ration kits to more than 5,000 drivers and their families affected by the COVID-19 pandemic across multiple States in India.

Apart from the key thrust areas, your Company contributed funds for other causes such as preservation and promotion of the fine arts and culture and supporting orphanage homes, differently abled homes and homes for the elderly to re-affirm its pledge to strive for a better society.

During the year under review, your Company has spent Rs. 32.54 Crores towards Corporate Social Responsibility on various CSR projects and programs. This includes the contribution of Rs. 517 Crores made to PM Cares Fund in the Financial Year 2019-20, which has been off-set against the CSR spend of the Financial Year 2020-21 as per the Notification D.O. No 05/1/2020-CSR-MCA dated 30^th March, 2020 issued by the Ministry of Corporate Affairs. Your Company is in compliance with the statutory requirements in this regard.

CSR COMMITTEE

The Company has duly constituted a CSR Committee in accordance with Section 135 of the Companies Act, 2013 to assist the Board and the Company in fulfilling the corporate social responsibility objectives of the Company.

Consequent upon the resignation of Dr. Anish Shah as a Member of the Committee with effect from 16^th May, 2020 and cessation of Mr. V. Ravi, Member, as Executive Director & Chief Financial Officer of the Company with effect from 25^th July, 2020, the Committee presently comprises of the following Directors:

 

Name	Category
Mr. Dhananjay Mungale	- Chairman of the Committee (Independent Director)
Ms. Rama Bijapurkar	- Independent Director
Mr. Ramesh Iyer	- Vice-Chairman & Managing Director

 

During the year under review, 4 (four) CSR Committee Meetings were held, details of which are provided in the Corporate Governance Report.

CSR POLICY

During the year under review, the Board based on the recommendation of the CSR Committee, amended the CSR Policy to align the same in accordance with the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 and Section 135 of the Companies Act, 2013, as amended, effective from 22^nd January, 2021.

The revised CSR Policy is hosted on the Company's website and can be accessed at the web-link: https:// www.mahindrafinance.com/investor-zone/corporate-governance. The detailed Annual Report on the CSR activities undertaken by your Company during the year, as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is set out in “Annexure III” of this Report.

ANNUAL RETURN

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return as on 31^st March, 2021 in Form No. MGT-7, is available on the Company's website and can be accessed at the web-link: https://www.mahindrafinance.com/investor-zone/financial-information.

BOARD MEETINGS, EXTRAORDINARY GENERAL MEETING AND ANNUAL GENERAL MEETING

The calendar of the Board/Committee Meetings and the Annual General Meeting is circulated to the Directors in advance to enable them to plan their schedule for effective participation at the respective meetings. Additional Board Meetings are convened by giving appropriate notice to address business exigencies. Apart from Meetings, at times, certain decisions are taken by the Board/Committee(s) through Circular Resolutions, after a discussion over a conference call between Board/Committee Members.

All the decisions and urgent matters approved by way of Circular Resolutions/Circular Note are placed and noted at the subsequent Board/Committee Meeting(s).

The Board of Directors met seven times during the year under review, on 15^th May, 2020, 1^st June, 2020, 18^th July, 2020, 18^th September, 2020, 26^th October, 2020, 28^th January, 2021 and 5^th March, 2021. The requisite quorum was present for all the Meetings. The maximum time gap between any two Meetings was not more than one hundred and twenty days. These Meetings were well attended. The 30^th Annual General Meeting ('AGM') of the Company was held on 10^th August, 2020.

During the year under review, an Extraordinary General Meeting ('EGM') of the Members was held on 30^th June, 2020 to approve the increase in the Authorised Share Capital of the Company and consequential amendment(s) to the Capital Clause of the Memorandum of Association of the Company.

Detailed information on the Meetings of the Board, its Committees, EGM and the AGM is included in the Report on Corporate Governance, which forms part of this Annual Report.

MEETINGS OF INDEPENDENT DIRECTORS

The Independent Directors met twice during the year under review, on 13^th August, 2020 and 4^th March, 2021. The Meetings were conducted in an informal manner without the presence of the Whole-time Director(s), the Non-Executive Non-Independent Directors, or any other Management Personnel.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company has various Committees which have been constituted as a part of good corporate governance practices and the same are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

Audit Committee

As on 31^st March, 2021, the Audit Committee comprised of four Independent Directors and one Non-Executive NonIndependent Director:

Name	Category
Mr. C. B. Bhave	Chairman of the Committee (Independent Director)
Mr. Dhananjay Mungale	Independent Director
Ms. Rama Bijapurkar	Independent Director
Mr. Milind Sarwate	Independent Director
Dr. Anish Shah	Non-Fxec.iit.ive Non-Independent Director

Changes in Committee Members during the year:

•    Mr. V. S. Parthasarathy ceased to be a Member of the Committee consequent upon his resignation as a NonExecutive Non-Independent Director of the Company with effect from 18^th September, 2020.

•    Mr. Amit Raje, Non-Executive Non-Independent Director of the Company was appointed as a Member of the Committee with effect from 28^th January, 2021.

Pursuant to his appointment as a Whole-time Director of the Company with effect from 1^st April, 2021, and in order to be consistent with the principles of good governance, Mr. Amit Raje resigned as a Member of the Audit Committee with effect from 5^th March, 2021.

•    Mr. Arvind V. Sonde ceased to be a Member of the Committee consequent to his resignation as an Independent Director of the Company with effect from 15^th March, 2021.

During the year, 7 (seven) Audit Committee Meetings were held, details of which are provided in the Corporate Governance Report.

The recommendations of the Audit Committee were duly approved and accepted by the Board during the year under review.

Other Board Committees

The other Committees of the Board are:

i)    Nomination and Remuneration Committee

ii)    Stakeholders Relationship Committee

iii)    Corporate Social Responsibility Committee

iv)    Risk Management Committee

v)    Asset Liability Committee

vi)    IT Strategy Committee

vii)    Committee for Strategic Investments

The details with respect to the composition, powers, roles, terms of reference, Meetings held and attendance of the Directors at such Meetings of the relevant Committees are given in detail in the Report on Corporate Governance of the Company which forms part of this Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Chairman of the Board of Directors

i)    Resignation of Mr. Dhananjay Mungale as Chairman of the Board with effect from close of business hours on 1^st April, 2021

Mr. Dhananjay Mungale (DIN: 00007563) stepped down as the Chairman of the Board of Directors with effect from the close of business hours on 1^st April, 2021.

The Board has placed on record its deep appreciation of the contribution and valuable services rendered by Mr. Mungale during his association as Chairman of the Board since 2016.

Mr. Dhananjay Mungale continues to be an Independent Director of the Company.

ii)    Appointment of Dr. Anish Shah as Chairman of the Board of Directors with effect from 2^nd April, 2021

In the light of Mr. Dhananjay Mungale relinquishing his office as Chairman of the Board of Directors of the Company and on the recommendation of the Nomination and Remuneration Committee, the Board at its Meeting held on 28^th January, 2021, appointed Dr. Anish Shah (DIN: 02719429) as Non-Executive Chairman of the Board with effect from 2^nd April, 2021.

?r. Anish Shah is currently the Managing Director and Chief Executive Officer of Mahindra & Mahindra Limited ['M&M'], the Holding Company, with responsibility for the Group Corporate Office and full oversight of all businesses other than the Auto and Farm sectors of M&M.

Appointment/Re-Appointment of Directors Mr. Ramesh Iyer

Re-appointment of Mr. Ramesh Iyer, Managing Director designated as Vice-Chairman & Managing Director

Mr. Ramesh Iyer has been the Managing Director of the Company since 30^th April, 2001 and has played a key role in building Mahindra Finance into one of India's leading rural finance companies, since 1995.

In March 2016, Mr. Iyer was elevated as the Vice-Chairman & Managing Director of the Company.

The term of office of Mr. Ramesh Iyer, Vice-Chairman & Managing Director of the Company, expires on 29^th April, 2021.

On the recommendation of the Nomination and Remuneration Committee ['NRC'], the Board of Directors at its Meeting held on 23^rd April, 2021, has re-appointed Mr. Ramesh Iyer [DIN: 00220759] as the Managing Director, liable to retire by rotation, designated as Vice-Chairman & Managing Director for a period of 3 [three] years with effect from 30^th April, 2021 to 29^th April, 2024 [both days inclusive], subject to the approval of Members at the ensuing Annual General Meeting.

Mr. Amit Raje

Appointment of Mr. Amit Raje as a Non-Executive NonIndependent Director

Pursuant to the recommendation of the NRC, the Board at its Meeting held on 18^th September, 2020, appointed Mr. Amit Raje [DIN: 06809197] as an Additional Non-Executive NonIndependent Director of the Company with effect from 18^th September, 2020, liable to retire by rotation.

The Members of the Company have by means of an Ordinary Resolution passed on 3^rd March, 2021 vide Postal Ballot conducted through Remote E-voting mode, approved the appointment of Mr. Amit Raje as a Non-Executive NonIndependent Director of the Company.

Appointment of Mr. Amit Raje as Whole-time Director of the Company designated as “Chief Operating Officer Digital Finance - Digital Business Unit”

 

The Board of Directors of the Company at its Meeting held on 5^th March, 2021, has on the recommendation of the NRC, appointed Mr. Amit Raje as a Whole-time Director of the Company liable to retire by rotation, designated as “Chief Operating Officer Digital Finance -Digital Business Unit” for a period of 5 [five] years, with effect from 1^st April, 2021 till 31^st March, 2026 [both days inclusive], subject to approval of the Members at the ensuing Annual General Meeting.

Dr. Rebecca Nugent

Appointment of Dr. Rebecca Nugent as an Independent Director of the Company

Based on the recommendation of the NRC and on the proposal of the Board of Directors, Dr. Rebecca Nugent [DIN: 09033085] was appointed as an Independent Director of the Company, to hold office for a term of 5 [five] consecutive years commencing from 5^th March, 2021 to 4^th March, 2026 [both days inclusive], vide an Ordinary Resolution passed by the Members by means of a Postal Ballot through remote e-voting mode on 3^rd March, 2021.

Mr. Amit Kumar Sinha

Appointment of Mr. Amit Kumar Sinha as a Non-Executive Non-Independent Director

Pursuant to the recommendation of the NRC, the Board at its Meeting held on 23^rd April, 2021, appointed Mr. Amit Kumar Sinha [DIN: 09127387] as an Additional Non-Executive NonIndependent Director with effect from 23^rd April, 2021, to hold office up to the date of the ensuing Annual General Meeting ['AGM'] of the Company and thereafter, subject to the approval of the Members at the said AGM, as a NonExecutive Non-Independent Director, liable to retire by rotation.

The Company has received the requisite Notice from a Member in writing proposing his appointment as a Director of the Company.

Cessation of Directors

Mr. V. Ravi

As mentioned in the previous Annual Report, Mr. V. Ravi [DIN: 00307328] ceased to be the Executive Director & Chief Financial Officer of the Company upon completion of his tenure with effect from 25^th July, 2020. The Board has placed on record its deep appreciation of Mr. V. Ravi's immense contribution and valuable services during his long association with the Company and acknowledged Mr. Ravi's outstanding experience and expertise in serving

the Company including the Group's Financial Services Sector companies.

Mr. V. S. Parthasarathy

Resignation of Mr. V. S. Parthasarathy as Non-Executive Non-Independent Director of the Company

Mr. V. S. Parthasarathy (DIN: 00125299) resigned as Non-Executive Non-Independent Director with effect from 18^th September, 2020.

Consequently, Mr. V. S. Parthasarathy also ceased to be a Member of the Audit Committee, Nomination and Remuneration Committee, Risk Management Committee, Asset Liability Committee and Committee for Strategic Investments of the Board effective 18^th September, 2020.

Mr. Parthasarathy joined the Board of Directors of your Company in July 2014. The Board acknowledged Mr. V. S. Parthasarathy's contribution to the Company and has placed on record its appreciation of the invaluable services rendered by Mr. Parthasarathy during his association with the Company.

Mr. Arvind V. Sonde

Resignation of Mr. Arvind V. Sonde as an Independent Director of the Company

Mr. Arvind V. Sonde (DIN: 00053834) was appointed as an Independent Director of the Company by the Members through a Postal Ballot, with effect from 9^th December, 2019 for a term of five years.

Mr. Arvind V. Sonde resigned as a Member of the Board with effect from 15^th March, 2021, due to other professional and family commitments. Mr. Sonde has confirmed that there are no material reasons for his resignation, other than those mentioned in his resignation letter.

Subsequently, Mr. Arvind V. Sonde also ceased to be a Member of the Audit Committee and Risk Management Committee of the Board effective 15^th March, 2021.

The Board has placed on record its sincere appreciation of the valuable services rendered by Mr. Sonde as an Independent Director of the Company.

RETIREMENT BY ROTATION

Mr. Ramesh Iyer retires by rotation and, being eligible, offers himself for re-appointment at the 31^st Annual General Meeting of the Company scheduled to be held on 26^th July, 2021.

Re-appointment of Independent Directors

None of the Independent Directors of the Company is due for re-appointment.

Resignation of Independent Director(s)

During the year under review, except for Mr. Arvind V. Sonde, none of the Independent Directors of the Company had resigned before the expiry of his/her respective tenure(s).

Declaration by Directors

All the Directors of the Company have confirmed that they satisfy the “fit and proper” criteria as prescribed under Chapter XI of RBI Master Direction No. DNBR. PD.008/03.10.119/2016-17 dated 1^st September, 2016, as amended, and that they are not disqualified from being appointed/continuing as Directors in terms of Section 164(2) of the Companies Act, 2013.

Declaration by Independent Directors

All the Independent Directors of the Company have given their respective declarations/disclosures under Section 149(7) of the Companies Act, 2013 ('Act') and Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations') and have confirmed that they fulfill the criteria of Independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations, and have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.

Further, the Board after taking these declarations/ disclosures on record and acknowledging the veracity of the same, concluded that the Independent Directors are persons of integrity and possess the relevant proficiency, expertise and experience to qualify as Independent Directors of the Company and are Independent of the Management of the Company.

In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by the Indian Institute of Corporate Affairs, Manesar ('IICA'). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of 2 (two) years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption.

The Independent Directors of the Company except Dr. Rebecca Nugent, are exempt from the requirement to undertake the online proficiency self-assessment test conducted by IICA. Dr. Rebecca Nugent will be undertaking the said test in due course.

Key Managerial Personnel

The following persons 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:

Mr. Ramesh Iyer, Vice-Chairman & Managing Director.

Mr. Amit Raje, Whole-time Director of the Company designated as “Chief Operating Officer Digital Finance -Digital Business Unit”.

Mr. Vivek Karve, Chief Financial Officer of the Company and Group Financial Services Sector.

Ms. Arnavaz M. Pardiwalla, Company Secretary.

Changes in Key Managerial Personnel Chief Financial Officer

Mr. V. Ravi ceased to be the Chief Financial Officer of the Company on completion of his tenure as Executive Director & Chief Financial Officer with effect from 25^th July, 2020.

Based on the recommendations of the Nomination and Remuneration Committee and the Audit Committee, the Board of Directors of the Company at its Meeting held on 18^th July, 2020 appointed Mr. Vivek Karve as the Chief Financial Officer designated as 'Chief Financial Officer of the Company and Group Financial Services Sector' with effect from 14^th September, 2020.

Directors’ Responsibility Statement

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, (“the Act”) your Directors, based on the representations received from the Operating Management and after due enquiry, confirm that:

i.    in the preparation of the annual accounts for financial year ended 31^st March, 2021, the applicable accounting standards have been followed and there are no material departures in adoption of these standards.

ii.    they have in consultation with the Statutory Auditors selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and

 

fair view of the state of affairs of the Company as at 31^st March, 2021 and of the profit of the Company for the year ended on that date.

iii.    they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv.    they have prepared the annual accounts for financial year ended 31^st March, 2021 on a going concern basis.

v.    they have laid down adequate internal financial controls to be followed by the Company and that such internal financial controls were operating effectively during the financial year ended 31^st March, 2021.

vi.    they have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively during the financial year ended 31^st March, 2021.

Performance Evaluation of the Board

The Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“the Listing Regulations”) stipulate the evaluation of the performance of the Board, its Committees, Individual Directors and the Chairperson.

The Company has formulated a Policy for performance evaluation of the Independent Directors, the Board, its Committees and other individual Directors which includes criteria for performance evaluation of the Non-Executive Directors and Executive Directors.

The evaluation framework for assessing the performance of Directors comprises various key areas such as attendance at Board and Committee Meetings, quality of contribution to Board discussions and decisions, strategic insights or inputs regarding future growth of the Company and its performance, ability to challenge views in a constructive manner, knowledge acquired with regard to the Company's business/activities, understanding of industry and global trends, etc.

The evaluation involves self-evaluation by the Board Member and subsequent assessment by the Board of Directors. A member of the Board will not participate in the discussion of his/her evaluation.

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of 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 the Directors individually [including Independent Directors). The evaluation process was based on the affirmation received from the Independent Directors that they met the independence criteria as required under the Companies Act, 2013, and the Listing Regulations.

Feedback was sought by way of well-defined and structured questionnaires covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, areas of responsibility, execution and performance of specific duties, obligations and governance, compliance, oversight of Company's subsidiaries, etc., and the evaluation was carried out based on responses received from the Directors. The aspects of succession planning were also considered.

A separate exercise was carried out by the Nomination and Remuneration Committee of the Board to evaluate the performance of individual Directors who were evaluated on several parameters such as level of engagement and contribution, independence of judgment safeguarding the interest of the Company and its minority shareholders and knowledge acquired with regard to the Company's business/activities.

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 Directors and Non-Executive Directors.

The performance evaluation of the Independent Directors was carried out by the entire Board excluding the Director being evaluated.

The outcome of the Board Evaluation for the Financial Year 2020-21 was discussed by the Nomination and Remuneration Committee and the Board at their respective meetings held in April 2021. Qualitative comments and suggestions of Directors were taken into consideration by Mr. Dhananjay Mungale, former Chairman of the Board and Mr. C. B. Bhave, former Chairman of the Nomination and Remuneration Committee. The Directors have expressed their satisfaction with the evaluation process.

Familiarisation Programme for Independent Directors

The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the

Company and related matters along with details of number of programmes and number of hours spent by each of the Independent Directors during the Financial Year 2020-21, in terms of the requirements of SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015 are available on the website of the Company and can be accessed at the web-link: https://www.mahindrafinance.com/ media/383820/familiarisation-programme-for-the-f-y-2020-21-website-uploading.pdf

Policies on Appointment of Directors and Senior Management and Remuneration of Directors, Key Managerial Personnel and Employees

i)    Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management

In accordance with the provisions of Section 134[3] [e] of the Companies Act, 2013 [“the Act”] read with Section 178[2] of the Act and Regulation 17 of the SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015, your Company has adopted a Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management, which inter alia, includes the criteria for determining qualifications, positive attributes and independence of Directors, identification of persons who are qualified to become Directors and who may be appointed in the Senior Management team, succession planning for Directors and Senior Management, and the Talent Management framework of the Company.

This Policy is available at the Company's website at the web-link: https://mahindrafinance.com/investor-zone/corporate-governance.

ii)    Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel and Employees of the Company

Your Company has also adopted the Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel and Employees of the Company in accordance with the provisions of sub-section [4] of Section 178 of the Act.

Dr. Anish Shah has been appointed as the Non-Executive Chairman of the Board of Directors with effect from 2^nd April, 2021. Dr. Shah is in the whole-time employment of Mahindra & Mahindra Limited ['M&M'], the Holding Company and draws remuneration from it. Dr. Anish Shah is not paid any sitting fees or remuneration by the Company.

In view of the above, the Policy on Remuneration of Directors has been amended effective 2^nd April, 2021, in line with the aforesaid requirements and administrative changes.

The Policy on Remuneration of Directors, as amended, and the Remuneration Policy for Key Managerial Personnel and Employees of the Company, are appended as “Annexure IV-A” and “Annexure IV-B”, respectively, and form part of this Report. These Polices are also available at the Company's website at the web-link: https://mahindrafinance.com/investor-zone/corporate-governance.

The criteria for determining qualifications, positive attributes and independence of a Director and the Remuneration Policies for Directors, Key Managerial Personnel and other employees have been discussed in detail in the Report on Corporate Governance.

AUDITORS

Statutory Auditors

Messrs. B S R & Co. LLP, Chartered Accountants, (ICAI Firm Registration No.101248W/W-100022), were appointed as Statutory Auditors of the Company at the Twenty-seventh Annual General Meeting ('AGM') to hold office for a period of five consecutive years, commencing from the conclusion of the 27^th AGM held on 24^th July, 2017 till the conclusion of the 32^nd AGM of the Company to be held in the year 2022.

The Statutory Auditors have given a confirmation to the effect that they are eligible to continue with their appointment and that they have not been disqualified in any manner from continuing as Statutory Auditors. The remuneration payable to the Statutory Auditors shall be determined by the Board of Directors based on the recommendation of the Audit Committee.

The Report given by the Auditors on the Financial Statements of the Company for the Financial Year 2020-21 is a part of the Annual Report. The Report is unmodified and does not contain any qualification, reservation, adverse remark or disclaimer.

The Statutory Auditors were present at the last AGM. Secretarial Auditor

The Board of Directors of the Company has appointed Messrs. KSR & Co., Company Secretaries LLP to conduct the Secretarial Audit of the Company pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. In accordance with the

 

f provisions of sub-section (1) of Section 204, the Secretarial Audit Report for the Financial Year 2020-21 is appended to j this Report as “Annexure V”.

The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

l The Secretarial Auditor was present at the last AGM.

', Secretarial Audit of Material Unlisted Indian 3 Subsidiary

k Mahindra Rural Housing Finance Limited ('MRHFL), a ^- material subsidiary of the Company undertakes Secretarial Audit every year under Section 204 of the Companies Act, 2013. The Secretarial Audit of MRHFL for the Financial Year 2020-21 was carried out pursuant to Section 204 of the ¹Â Companies Act, 2013 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, ¹Â Â Â Â 2015. The Secretarial Audit Report of MRHFL submitted

by Messrs. KSR & Co., Company Secretaries LLP, does not contain any qualification, reservation or adverse remark or disclaimer. The Secretarial Audit Report is appended as “Annexure VI” and forms part of this Report.

i Cost Records and Cost Audit

³Â Maintenance of cost records and requirement of cost audit ¹Â as prescribed under the provisions of Section 148(1) of the ^ Companies Act, 2013 are not applicable in respect of the

¹Â business activities carried out by the Company. f

Reporting of Frauds by Auditors

3 During the year under review, the Statutory Auditors and t the Secretarial Auditor have not reported any instances i of frauds committed in the Company by its Officers or 3 Employees, to the Audit Committee under Section 143(12) j of the Companies Act, 2013, details of which need to be t mentioned in this Report.

PARTICULARS OF CONTRACTS OR f ARRANGEMENTS WITH RELATED _t^f PARTIES

” All contracts/arrangements/transactions entered into by the Company during the Financial Year with Related Parties were in the ordinary course of business and on an arm's length basis. During the year under review, your Company had not entered into any contract/arrangement/ transaction with Related Parties which could be considered ^ material in accordance with the Policy on Related Party ^t Transactions. Pursuant to Section 134 (3) (h) read with Rule ³Â Â Â Â 8 (2) of the Companies (Accounts) Rules, 2014, there are

* no transactions to be reported under Section 188 (1) of the ^f Companies Act, 2013. Accordingly, the disclosure of Related

3

provisions. Furthermore, credit losses may increase due to exposure to vulnerable sectors of the economy such as retail, hospitality and commercial real estate. The impact of the pandemic on the long-term prospects of businesses in these sectors is uncertain and may lead to significant credit losses on specific exposures, which may not be fully captured in ECL estimates.

Further, in accordance with the regulatory expectation of the Reserve Bank of India to bring down the Net Non-Performing Asset [NPA] ratio below 4%, which the Management has agreed with, the Company recorded an additional provision of Rs. 1,300 Crores during fourth quarter on Stage 3 loans.

The final impact of this pandemic and the Company's impairment loss allowance estimates are inherently uncertain, and hence, the actual impact may be different than that estimated based on the conditions prevailing as at the date of approval of these financial results. The management will continue to closely monitor the material changes in the macro-economic factors impacting the operations of the Company.

The continuing rapid spread of COVID-19 pandemic, emergence of new variants of the virus and the subsequent restrictions/control measures announced by the respective State Governments are the events which have continued till the date of the announcement of financial results of the Company. These uncertainties may adversely impact the Company's business operations in the future period.

Other than the above mentioned situation affecting the Company, there is no material change and commitment that have occurred after the closure of the Financial Year 2020-21 till the date of this Report, which would affect the financial position of your Company.

RISK MANAGEMENT POLICY

Your Company has a comprehensive Risk Management Policy in place and has laid down a well-defined risk management framework to identify, assess and monitor risks and strengthen controls to mitigate risks. Your Company has established procedures to periodically place before the Risk Management Committee and the Board of Directors, the risk assessment and minimisation procedures being followed by the Company and steps taken by it to mitigate these risks.

The Risk Management Policy, inter alia, includes identification therein of elements of risk, including Cyber Security and related risks as well as those risks which in the opinion of the Board may threaten the existence of the Company. The Risk management process has been established across

 

Party Transactions, as required under Section 134 [3] (h) of the Companies Act, 2013 in Form AOC-2 is not applicable to the Company.

The Policy on Related Party Transactions as approved by the Board of Directors of the Company is uploaded on the website of the Company and same can be accessed on the web-link: https://www.mahindrafinance.com/investor-zone/corporate-governance/.

Further details on the transactions with Related Parties are provided in the accompanying Financial Statements.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

The ongoing COVID-19 pandemic and its effect on the overall economy has impacted consumer sentiments and collections thus affecting the Company's performance, and the future effects of the outbreak remain uncertain. The outbreak has necessitated the Government to respond at unprecedented levels to protect public health, local economies and livelihoods. There remains a risk of subsequent waves of infection, as evidenced by the recently emerged variants of the virus. All these have substantially increased the estimation uncertainty in the preparation of the Financial Statements for the year ended 31^st March, 2021.

Your Company has developed various accounting estimates in these Financial Statements based on forecasts of economic conditions which reflect expectations and assumptions as at 31^st March, 2021 about future events that the management believe are reasonable under these circumstances. There is a considerable degree of judgement involved in preparing forecasts. The underlying assumptions are also subject to uncertainties which are often outside the control of the Company. Accordingly, actual economic conditions are likely to be different from those forecast since anticipated events frequently do not occur as expected, and the effect of those differences may significantly impact accounting estimates included in these Financial Statements.

The significant accounting estimates impacted by these forecasts and associated uncertainties are predominantly related to expected credit losses, fair value measurement, and recoverable amount assessments of non-financial assets.

Across the geographies and segments in which the Company operates, the COVID-19 outbreak has led to a worsening of economic conditions and increased uncertainty, which has been reflected in higher Expected Credit Loss ['ECL]

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. Your Company has a robust organisational structure for managing and reporting on risks.

The development and implementation of Risk Management Policy adopted by the Company is discussed in detail in the Management Discussion and Analysis chapter, which forms part of this Annual Report.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company promotes ethical behaviour in all its business activities and has established a vigil mechanism for its Directors, Employees and Stakeholders associated with the Company to report their genuine concerns. The Vigil Mechanism as envisaged in the Companies Act, 2013 and the Rules prescribed thereunder and the Listing Regulations is implemented through the Whistle Blower 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.

The Board at its Meeting held on 23^rd April, 2021 has pursuant to the recommendations of the Audit Committee, and in keeping with the changing Corporate Governance landscape, adopted a Revised Whistle Blower Policy of the Company.

As per the Whistle Blower Policy implemented by the Company, the Employees, Directors, customers, dealers, vendors, suppliers, or any Stakeholders associated with the Company are free to report illegal or unethical behaviour, actual or suspected fraud or violation of the Company's Codes of Conduct or Corporate Governance Policies or any improper activity to the Ethics Helpline Provider or the Chairperson of the Audit Committee of the Company or the Code of Conduct Committee. The Whistle Blower Policy also provides for reporting of insider trading violations as well as reporting of instances of leak of Unpublished Price Sensitive Information by the employees.

The Whistle Blower Policy provides for protected disclosure and protection to the Whistle Blower. Under the Whistle Blower Policy, the confidentiality of those reporting violation(s) is protected and they are not subject to any discriminatory practices. Protected disclosures can also be made by sending an email at the designated email id:

[e-mail] or any other mechanism as prescribed in the Whistle Blower Policy.

The Chairperson of the Audit Committee can be reached by sending a letter to the below address:

Chairperson of the Audit Committee Mahindra & Mahindra Financial Services Limited Mahindra Towers, 4^th Floor,

Dr. G. M. Bhosale Marg,

P. K. Kurne Chowk, Worli,

Mumbai - 400 018.

The Whistle Blower Policy has been appropriately communicated within the Company and is available on the website of your Company at the web-link: https://mahindrafinance.com/media/384157/vigil-mechanism.pdf.

The Audit Committee is apprised on the vigil mechanism on a periodic basis. During the year, no personnel have been denied access to the Audit Committee.

SUBSIDIARIES, JOINT VENTURE(S) AND ASSOCIATE(S)

The Company's Subsidiaries, Joint Venture(s) and Associate(s) continue to contribute to the overall growth in revenues and overall performance of your Company. A Report on the performance and financial position of each of the subsidiaries, joint venture(s) and the associate companies included in the Consolidated Financial Statements and their contribution to the overall performance of the Company, is provided in Form AOC-1 as ‘Annexure A’ to the Consolidated Financial Statements and forms part of this Annual Report.

Your Company has formulated a Policy for determining 'Material' Subsidiaries as defined in Regulation 16 of the Listing Regulations. This Policy has been hosted on the website of the Company and can be accessed at the web-link: https://mahindrafinance.com/investor-zone/ corporate-governance.

SUBSIDIARIES

Mahindra Insurance Brokers Limited

During the year under review, Mahindra Insurance Brokers Limited ('MIBL), the subsidiary in the business of Direct and Re-insurance Broking, serviced approximately 1.43 million insurance cases, for both Life and Non-Life Retail business. There is de-growth of 14% in Gross Premium facilitated for the Corporate and Retail business lines, decreasing from Rs. 2,431.89 Crores in the Financial Year 2019-20 to Rs. 2,101.06 Crores in the Financial Year 2020-21. The Total Income decreased by 20% from Rs. 336.89 Crores

in the Financial Year 2019-20 to Rs. 268.56 Crores in the Financial Year 2020-21. The Profit before Tax decreased by 40% from Rs. 73.90 Crores to Rs. 43.98 Crores and the Profit after Tax decreased by 40% from Rs. 53.36 Crores to Rs. 32.03 Crores during the same period. MIBL has been able to reach the benefit of insurance to over 3 lakh villages across India.

During the year, MIBL focused on improving manpower productivity and efficiency through automation projects. There is also a sharper focus on diversifying the customer base through additional distribution channel including the Point of Sales Person channel and the direct online sales through paybima.com. Though some of the planned investments in some of the business divisions were delayed, there is no change in the long term strategy of MIBL.

Mahindra Rural Housing Finance Limited

Mahindra Rural Housing Finance Limited ('MRHFL), the Company's subsidiary in the business of providing loans for purchase, renovation, construction of houses to individuals in the rural and semi-urban areas of the country, registered a total income of Rs. 1,454.7 Crores as compared to Rs. 1,527.6 Crores for the previous year, registering a decline of 4.8%. Profit before tax was 5% lower at Rs. 195.3 Crores as compared to Rs. 205.6 Crores for the previous year. Profit after tax was 1.6% higher at Rs. 151.0 Crores as compared to Rs. 148.6 Crores for the previous year.

During the year under review, MRHFL disbursed loans aggregating to Rs. 796.6 Crores as against Rs. 1,876.4 Crores in the previous year.

MRHFL continued its focus on serving customers in rural India. Majority of the loans disbursed were to customers in villages with an average annual household income of less than Rs. 2.00 lakhs. During the year under consideration, MRHFL disbursed home loans to around 34,559 households (in addition to around 10,45,898 existing households as on 31^st March, 2020). MRHFL has been expanding its geographical presence to provide affordable services for rural households.

Mahindra Manulife Investment Management Private Limited and Mahindra Manulife Trustee Private Limited

Equity Infusion by Manulife Investment Management (Singapore) Pte. Limited

As mentioned in the previous Annual Report, Manulife Investment Management (Singapore) Pte. Limited has acquired 49% of the equity share capital of Mahindra

Manulife Investment Management Private Limited [formerly nown as Mahindra Asset Management Company Private Jmited ('MAMCPL)] and Mahindra Manulife Trustee Private Jmited [formerly known as Mahindra Trustee Company Private Limited ('MTCPL')], then wholly-owned subsidiaries, pursuant to the execution of the Share Subscription Agreement and Shareholders' Agreement by and amongst :he Company, MAMCPL, MTCPL and Manulife on 21^st June, 019.

Consequent to the above, the shareholding of the Company n MAMCPL and MTCPL stood reduced from 100% to 51% pf the share capital, respectively.

rhe erstwhile names of MAMCPL and MTCPL have been changed to Mahindra Manulife Investment Management Private Limited and Mahindra Manulife Trustee Private Jmited respectively, with effect from 19^th May, 2020.

Mahindra Manulife Investment Management Private Limited

Mahindra Manulife Investment Management Private Limited 'MMIMPL) acts as an Investment Manager for the schemes pf Mahindra Manulife Mutual Fund. As on 31^st March, 2021, MMIMPL was acting as the Investment Manager for sixteen chemes.

rhe Average Assets under Management in these sixteen schemes were Rs. 5,249 Crores in March 2021 as compared :o Rs. 4,771 Crores in March 2020. Of these assets, Rs. 2,591 Crores were in equity schemes in March 2021 as compared to Rs. 1,616 Crores in March 2020. MMIMPL aas empanelled more than 15,600 distributors and opened 2,13,610 investor accounts in these schemes, recording a Jse of more than 12%.

During the year under consideration, the total income of MMIMPL was Rs. 30.5 Crores as compared to Rs. 17 Crores ^:or the previous year. The operations for the year under consideration have resulted in a loss of Rs. 26.7 Crores as against a loss of Rs. 37.9 Crores during the previous year.

Mahindra Manulife Trustee Private Limited

Mahindra Manulife Trustee Private Limited ('MMTPL) acts as the Trustee to Mahindra Manulife Mutual Fund.

During the year, MMTPL earned trusteeship fees of Rs. 33 _akhs and other income of Rs. 2.7 Lakhs as compared to Rs. 20.9 Lakhs and Rs. 1 Lakh respectively, for the previous /ear. MMTPL recorded a loss of Rs. 0.97 Lakh for the year under review as against a loss of Rs. 1.8 Lakhs in the previous year.

Mahindra Finance CSR Foundation

Mahindra Finance CSR Foundation was incorporated on 2^nd April, 2019 as a wholly-owned subsidiary of the Company registered under Section 8 of the Companies Act, 2013, to promote and support CSR projects and activities. The CSR Foundation is focused on identifying need-based and long-term social impact interventions in cause areas such as health, education, employment & livelihood generation and environment.

In the current Financial Year, the Foundation has launched a flagship CSR program for one of the important stakeholders of your Company i.e. the Driver Community. It is aimed at providing a safety net to drivers and their family members from a holistic perspective and various interventions would be implemented in collaboration with local NGO partners in select States in India.

JOINT VENTURE/ASSOCIATE

Mahindra Finance USA LLC.

The joint venture company's disbursement registered a growth of 11.5% to USD 860.7 Million for the year ended 31^st March, 2021 as compared to USD 772.2 Million for the previous year.

Total Income declined by 10% to USD 61.9 Million for the year ended 31^st March, 2021 as compared to USD 68.8 Million for the previous year. Profit before tax was 77% higher at USD 23.4 Million as compared to USD 13.2 Million for the previous year. Profit after tax grew at a healthy rate of 82% to USD 175 Million as compared to USD 9.6 Million in the previous year.

Ideal Finance Limited (Sri Lanka)

In August, 2019, your Company entered into a Share Subscription, Share Purchase and Shareholders' Agreement with Ideal Finance Limited (Sri Lanka) ['Ideal Finance'] and its existing Shareholders to form and operate a Joint Venture in the financial services sector in Sri Lanka. The joint venture will capitalise on the Company's expertise of over 25 years in the financial services domain and Ideal Finance's domestic market knowledge to build a leading financial services business in Sri Lanka.

Till date your Company has acquired 38.20% stake in Ideal Finance for an amount equivalent to LKR 110 Crores (approximately Rs. 44 Crores). Your Company is committed to enhancing its equity stake in Ideal Finance up to 58.2% aggregating to an amount not exceeding LKR 200.3 Crores.

 

This joint venture will further strengthen your Company's presence in the financial services business. It will help your Company's growth in key emerging markets.

Names of Companies which have become or ceased to be Subsidiaries, Joint Ventures or Associate Companies during the year

During the year under review, no company has become or ceased to be a subsidiary, joint venture or associate of your Company.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company, its subsidiaries, associate(s) and joint ventures for the Financial Year 2020-21, prepared in accordance with the relevant provisions of the Companies Act, 2013 and applicable Indian Accounting Standards along with all relevant documents and the Auditors' Report form part of this Annual Report.

The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies, associate(s) and joint ventures.

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the Financial Statements of the Company, Consolidated Financial Statements along with relevant documents and separate annual accounts in respect of each of the subsidiaries are available on the website of the Company and can be accessed at the web-link: https:// www.mahindrafinance.com/investor-zone/financial-information.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY’S OPERATIONS IN FUTURE

There are no significant and material orders passed by the regulators or courts or tribunals that would impact the going concern status of the Company and its future operations.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Your Company has in place adequate internal financial controls with reference to the Financial Statements

commensurate with the size, scale and complexity of its operations.

Your Company uses various industry standard systems to enable, empower and engender businesses and also to maintain its Books of Account. The transactional controls built into these systems ensure appropriate segregation of duties, the appropriate level of approval mechanisms and maintenance of supporting records. The systems, Standard Operating Procedures and controls are reviewed by Management. These systems and controls are audited by Internal Auditors and their findings and recommendations are reviewed by the Audit Committee and the IT Strategy Committee of the Board of Directors which ensures the implementation.

Your Company's Internal Financial Controls were deployed through Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), that addresses material risks in your Company's operations and financial reporting objectives. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by The Institute of Chartered Accountants of India. The risk control matrices are reviewed on a yearly basis and control measures are tested and documented on a quarterly basis. The Company has during the year enhanced its IT systems making the ICFR process completely digital which has further enabled to strengthen its review and monitoring controls. Based on the results of such assessments carried out by Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.

Your Company recognises that Internal Financial Controls cannot provide absolute assurance of achieving financial, operational and compliance reporting objectives because of

 

its inherent limitations. Also, projections of any evaluation of the Internal Financial Controls to future periods are subject to the risk that the Internal Financial Control may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.

COMPLIANCE WITH THE PROVISIONS OF SECRETARIAL STANDARD - 1 AND SECRETARIAL STANDARD - 2

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

The applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to 'Meetings of the Board of Directors' and 'General Meetings', respectively, have been duly complied with, by your Company.

POLICIES

The details of the Key Policies adopted by the Company are mentioned at “Annexure VII” to the Board's Report.

GENERAL DISCLOSURE

During the year, the Company, in the capacity of a Financial Creditor, has filed two petitions before the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 for recovery of outstanding loans against its customers, being Corporate Debtors.

There was no instance of one-time settlement with any Bank or Financial Institution during the year under review.

PARTICULARS OF REMUNERATION AND RELATED DISCLOSURES

Disclosures with respect to the remuneration of Directors, Key Managerial Personnel and Employees as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are as under:

 

Sr. Disclosure Requirement	Â	Disclosure Details	Â	Â
No.	Name of Director/ KMP	Designation	Ratio of the remuneration of each Director to median remuneration of employees	% increase in Remuneration
1. Ratio of the remuneration of	Dr. Anish Shah*	Non-Executive Chairman (w.e.f. 2nd April, 2021)	N.A.	N.A.
each Director to the median remuneration of the employees of the Company for the Financial	Mr. Dhananjay Mungale** (Former Chairman)	Independent Director	15.96X	13.74
	Mr. C. B. Bhave	Independent Director	13.36X	21.04
	Ms. Rama Bijapurkar	Independent Director	12.39X	17.63
Year 2020-21 & Percentage increase in Remuneration of	Mr. Milind Sarwate	Independent Director	13.71X	25.08
	Mr. Arvind V. SondeA	Independent Director	11.25X	296.73
each Director, Chief	Dr. Rebecca Nugent#	Independent Director	1.02X	N.A.
Financial Officer and Company Secretary during the Financial Year 2020-21	Mr. V. S. Parthasarathy##	Non-Executive Non-Independent Director	N.A.	N.A.
	Mr. Ramesh Iyer	Vice-Chairman & Managing Director	254.06X	8.45
Â	Mr. Amit Raje$	Whole-time Director - Chief Operating Officer Digital Finance -Digital Business Unit	N.A.	N.A.
Â	Mr. V. Ravi$$	Former Executive Director & Chief Financial Officer	129.29X	7.26
Â	Mr. Vivek Karve@	Chief Financial Officer of the Company and Group Financial Services Sector	Â	N.A.
Â	Ms. Arnavaz M. Pardiwalla	Company Secretary & Compliance Officer	-	-13.47

 

* Dr. Anish Shah, Non-Executive Chairman, being in the whole-time employment of Mahindra & Mahindra Limited ('M&M’), the Holding Company, draws remuneration from it and does not receive any remuneration from the Company.

** Resigned as Chairman of the Board of Directors of the Company w.e.f. close of business hours on 1^st April, 2021. Mr. Mungale continues to be an Independent Director of the Company.

^A Resigned as an Independent Director of the Company with effect from 15^th March, 2021.

#    Appointed as an Independent Director of the Company with effect from 5^th March, 2021.

## Resigned as Non-Executive Non-Independent Director of the Company with effect from 18^th September, 2020. Mr. V. S. Parthasarathy being in the whole-time employment of M&M, did not receive any remuneration from the Company during the year.

$ Appointed as Non-Executive Non-Independent Director of the Company with effect from 18^th September, 2020. During F.Y. 202021, Mr. Amit Raje being in the whole-time employment of M&M, did not receive any remuneration from the Company.

Mr. Amit Raje has been appointed as a Whole-time Director of the Company, designated as Chief Operating Officer Digital Finance -Digital Business Unit with effect from 1^st April, 2021.

$$ Ceased to hold office as Executive Director & Chief Financial Officer of the Company with effect from 25^th July, 2020.

@ Appointed as Chief Financial Officer of the Company and Group Financial Services Sector with effect from 14^th September, 2020.

 

2. Percentage increase in the median Remuneration of employees in the Financial Year 2020-21:	There is no increase in the median remuneration of employees. There is a decrease of 16.09% in the median remuneration of employees, taking into consideration employees who were in employment for the whole of the Financial Year 2020-21 and Financial Year 2019-20.
3. Number of Permanent employees on the rolls of the Company as on 31st March, 2021:	19,952

 

4. Average percentile increase already made in the salaries of employees other than the Managerial Personnel in the last Financial Year i.e. 2020-21 and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:	For employees other than Managerial Personnel who were in employment for the whole of the Financial Year 2019-20 and Financial Year 2020-21, there is no increase in the average percentile. There is an average decrease of 15.86% for Financial Year 202021 for employees other than Managerial Personnel whereas the increase in the managerial remuneration for Financial Year 2020-21 is 8.45%.
Â	Justification:
Â	In view of the outbreak of COVID-19 pandemic, no increments were given to the employees and the Managerial Personnel during FY 2020-21.
Â	There is an increase in the remuneration of Managerial Personnel, mainly due to exercise of the ESOPs in FY 2020-21.
Â	The remuneration of the Vice-Chairman & Managing Director is decided based on the individual performance, inflation, prevailing industry trends and benchmarks.
Â	The remuneration of eligible Non-Executive Directors consists of commission and sitting fees. While deciding the remuneration, various factors such as Director's participation in Board and Committee Meetings during the year, other responsibilities undertaken, such as Membership or Chairmanship/ Chairpersonship of Committees, and such other factors as the Nomination and Remuneration Committee may deem fit etc., were taken into consideration.
5. Affirmation that the remuneration is as per the Remuneration Policy of the Company:	The remuneration paid/payable is as per the Policy on Remuneration of Directors and Remuneration Policy for Key Managerial Personnel and Employees of the Company.

Notes:

1]    The remuneration calculated is as per Section 2[78] of the Companies Act, 2013 and includes the perquisite value of Stock Options of the Company exercised during the year.

2]    The calculations are based on Employees who were on the rolls of the Company for the whole of the Financial Year 2019-20 and Financial Year 2020-21.

3]    On the recommendation of the Nomination and Remuneration Committee, the Board at its Meeting held on 28^th January, 2021 has increased the commission and sitting fees payable to the Independent Directors for attending the Board/Committee Meetings. This is commensurate with the increased responsibilities, contribution and time devoted by Independent Directors on various matters pertaining to the Company.

Mr. Ramesh Iyer, Vice-Chairman & Managing Director of the Company does not receive any remuneration or commission from its Holding Company.

Mr. Ramesh Iyer does not receive any commission from any of the subsidiaries of the Company. During the year under review, Mr. Ramesh Iyer has received remuneration from Mahindra Insurance Brokers Limited, the Company's Subsidiary in the form of Employees' Phantom Stock Options amounting to Rs. 88,51,570.

Mr. Ramesh Iyer has not exercised ESOPs of Mahindra Rural Housing Finance Limited, a subsidiary company, during the year, which were granted in the earlier year[s].

 

The Company had 23 employees who were in receipt of remuneration of not less than Rs. 1,02,00,000 during the year ended 31^st March, 2021 or not less than Rs. 8,50,000 per month during any part of the year.

Details of employee remuneration as required under provisions of Section 197 [12] of the Companies Act, 2013 read with Rule 5 [2] and 5 [3] of Companies [Appointment and Remuneration of Managerial Personnel] Rules, 2014 are available on your Company's website and can be accessed at the web-link: https://www.mahindrafinance. com/investor-zone/financial-information.

Any Member interested in obtaining a copy of the same may write to the Company Secretary at the investor Email Id: [e-mail].

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company is an equal opportunity employer and is committed to ensuring that the work environment at all its locations is conducive to fair, safe and harmonious relations between employees. It strongly believes in upholding the dignity of all its employees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictly prohibited.

The Company has in place a detailed Policy in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, ('POSH Act') and Rules made thereunder, to prevent sexual harassment of its employees.

All employees (permanent, contractual, temporary and trainees) are covered under this Policy. The Policy has been widely communicated internally and is placed on the Company's intranet portal. The Company ensures that no employee is disadvantaged by way of gender discrimination.

The POSH Policy is also available on the website of the Company and can be accessed at the web-link: https://www.mahindrafinance.com/investor-zone/ corporate-governance.

The Company has complied with the provisions relating to the constitution of the Internal Complaints Committee (ICC) under the POSH Act to redress complaints received regarding sexual harassment.

To ensure that all the employees are sensitised regarding issues of sexual harassment, the Company conducts an online Induction Training through the learning platform M-Drona covering topics on POSH awareness, reconciliation before filing POSH complaint(s) and consequences of filing false complaint(s).

The following is a summary of Sexual Harassment complaint(s) received and disposed off during the year 202021, pursuant to the POSH Act and Rules framed thereunder:

a)    Number of complaint(s) of Sexual Harassment received during the year: 2

b)    Number of complaint(s) disposed off during the year: 2

c)    Number of cases pending for more than 90 days: Nil

d)    Number of workshops/awareness programme against sexual harassment carried out:

•    Awareness program was conducted in which mailers and video on Prevention of Sexual Harassment at the work place along with the detailed POSH Policy was circulated to sensitise employees to uphold the dignity of their female colleagues at the workplace.

•    Online training program on “Sexual Harassment while Working from Home” and best practices at work for handling sexual harassment cases was organised for Members of the Internal Complaints Committee.

•    A program was conducted online for all women employees, to enhance awareness regarding the Company's POSH Policy.

•    Awareness program was conducted under the “Speak-up” campaign for the employees, in which awareness creating emails and wall papers on laptop/computer screens of all employees, were circulated, covering topics such as applicability of POSH Act to virtual office, raising a complaint under the POSH Act, etc.

e) Nature of action taken by the employer or District

Officer: Warning letter was issued to both the

respondents.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under sub-section (3) (m) of Section 134 of the Companies Act, 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014 are given as under :

(A) Conservation of Energy

(i) The steps taken or impact on conservation of energy:

The operations of your Company are not energy intensive. However, adequate measures have been initiated to reduce energy consumption.

Select few steps are listed:

a) Replacement of conventional lighting with Light Emitting Diode (LED) lighting:

The Company has installed LED lighting in Regional Offices of the Company during the

year under review and the same has been monitored in terms of electrical consumption and expenses. The Company extensively monitors its energy consumption and GHG emissions. Conservation of energy covers use of LED lights in new branches and retrofication to LED lights in Regional Offices.

b)    Replacement of old air-conditioning with updated version of machines with R-410A gas, which helps in reducing Ozone depletion. Your Company has taken the initiative to use environment friendly gas in Air Conditioners during the year.

c)    Reduction in water and energy consumption and recycling of waste paper generation at various locations.

During the year, the Company has sent 2,131 kgs. of waste generated at the Head Office for responsible disposal and recycling. In return it has received 11,195 Swachh Bharat Points which can be redeemed for environmentally friendly office stationary items from the vendor partner. Similarly, waste generation and recycling has been done at the Record Management Company for 2,896 boxes weighing total 16,500 kgs.

[ii]    The steps taken by the Company for utilising alternate sources of energy: Nil.

[iii]    The capital investment on energy conservation equipment: Nil.

(B) Technology Absorption

[i]    The efforts made towards technology absorption: Not Applicable.

(ii)    The benefits derived like product improvement, cost reduction, product development or import substitution: Not Applicable.

(iii)    In case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year): Not Applicable.

(a)    Details of Technology Imported;

(b)    Year of Import;

(c)    Whether the Technology has been fully absorbed;

(d)    if not fully absorbed, areas where absorption has not taken place, and the reasons thereof.

(iv)    Your Company has not incurred any expenditure on Research and Development during the year under review.

(C) Foreign Exchange Earnings and Outgo

Foreign Exchange earnings and outgo during the year under review are as follows:

Rs. in Crores

Total Foreign Exchange; Eam^ed and _For the Financial For the Financial ^Outgo    Year ended 31st Year ended 31st

March, 2021    March, 2020

Foreign Exchange Earnings    NIL    NIL

Foreign Exchange Outgo    16.14    20.14

For and    on behalf of the Board

Dr.    Anish Shah

Chairman

Place : Mumbai Date : 23^rd April, 2021

---

Mar 31, 2021

The Directors are pleased to present their Thirty-First Report together with the Audited Financial Statements of your Company for the Financial Year ended 31^st March, 2021.

The performance highlights and summarised financial results of the Company are given below:

PERFORMANCE HIGHLIGHTS

Consolidated income for the year increased by 1.5% to Rs. 12,170.5 Crores as compared to Rs. 11,996.5 Crores in 2019-20;

Consolidated income from operations for the year was Rs. 12,050.3 Crores as compared to Rs. 11,883.0 Crores in 2019-20, a growth of 1.4%;

Consolidated profit before tax for the year was Rs. 934.1 Crores as compared to Rs. 1,602.0 Crores in 2019-20;

Consolidated profit after tax and non-controlling interest for the year was Rs. 773.2 Crores as compared to Rs. 1,075.1 Crores in 2019-20.

FINANCIAL RESULTS

Â	CONSOLIDATED March 2021 March 2020		Rs. in Crores STANDALONE March 2021 March 2020
Total Income	12,170.5	11,996.5	10,516.8	10,245.1
Less: Finance Costs	5,307.6	5,390.6	4,733.2	4,828.8
Expenditure	6,046.4	4,902.9	5,241.4	3,954.3
Depreciation, Amortization and Impairment	150.5	146.9	125.9	118.3
Total Expenses	11,504.4	10,440.3	10,100.5	8,901.4
Profit before exceptional items and taxes	666.1	1,556.1	416.3	1,343.8
Share of Profit of Associates & Joint Ventures	39.5	45.9	-	-
Exceptional items	228.5	-	6.1	-
Profit Before Tax	934.1	1,602.0	422.4	1,343.8
Less: Provision for Tax
Current Tax	512.3	647.3	450.3	556.9
Deferred Tax	(340.9)	(129.9)	(347.5)	(119.6)
(Excess) / Short provision for Income Tax - earlier years	(17.6)	(1.2)	(15.5)	-
Profit After Tax for the Year	780.3	1,085.8	335.2	906.4
Less: Profit for the year attributable to Non-Controlling	7.1	10.7	Â	Â
interests	Â	Â	Â	Â
Profit for the year attributable to Owners of the Company	773.2	1,075.2	335.2	906.4
Balance of profit brought forward from earlier years	4,578.0	3,957.3	4,293.6	3,834.0
Add: Other Comprehensive Income/(Loss)	(18)	(14.7)	(2.4)	(11.3)
Add: Transfer from Debenture Redemption Reserve	-	223.7	-	223.7
Balance available for appropriation	5,349.4	5,241.4	4,626.4	4,952.8
Less: Appropriations
Dividend paid on Equity Shares (including tax thereon)	-	484.2	-	477.9
Transfer to Statutory Reserves	98.8	222.8	68.0	181.3
Add/Less: Other Adjustments:
Gross obligation at fair value to acquire non-controlling	35.4	43.6	Â	Â
interest	Â	Â	Â	Â
Changes in Group's Interest	(10)	-	-	-
Balance profit carried forward to balance sheet	5,285.0	4,578.0	4,558.4	4,293.6

TRANSFER TO RESERVES

The Company proposes to transfer an amount of Rs. 68.0 Crores to the Statutory Reserve. Further, the Board of your Company decided not to transfer any amount to the General Reserve for the year under review. An amount of Rs. 4,558.4 Crores is proposed to be retained in the Statement of Profit and Loss.

DIVIDEND

Your Directors are pleased to recommend a dividend of Re. 0.80 per Equity Share of the face value of Rs. 2 each, payable to those Members whose names appear in the Register of Members as on the Book Closure date. Dividend is subject to approval of Members at the ensuing Annual General Meeting and shall be subject to deduction of tax at source.

The Equity dividend outgo for the Financial Year 2020-21 would absorb a sum of Rs. 98.8 Crores.

The dividend pay-out is in accordance with the Company's Dividend Distribution Policy.

DIVIDEND DISTRIBUTION POLICY

The Dividend Distribution Policy, containing the requirements prescribed in Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is appended as “Annexure I” and forms part of this Annual Report.

The Dividend Distribution Policy can also be accessed on the Company's website at the web-link: https:// mahindrafinance.com/discover-mahindra-finance/ policies.

During the year, an amount of Rs. 7,13,234 being the unclaimed/unpaid dividend of the Company for the Financial Year ended 31^st March, 2013 was transferred in September, 2020 to the Investor Education and Protection Fund Authority.

OPERATIONS

The year under review has been one of the most challenging years both for your Company and its customers. The COVID-19 pandemic outbreak which began in the middle of March 2020 continued to impact the economy throughout the financial year 2020-21. The year was full of uncertainties with slowdown in activities on the ground. The world was introduced to the new normal of lockdowns, containment zones, work from home with restricted movements of people and goods. The nationwide transport system came to a grinding halt as Air, Train and Road travel got severely impacted. This was a never seen before situation which

brought the economic activities in the country to a virtual standstill. The impact of the pandemic led to closure of almost all the Company's offices, business and recovery touch points and completely stalled the field operations from the last week of March 2020. Operations gradually resumed in mid-May in offices pan-India. Your Company has been strictly adhering to lockdown announcements in accordance with the directives issued by the Central, State Government and Local Administration.

Your Company is primarily in the financing of Automobiles and Tractors and addresses customers who use these vehicles for earning their livelihood. Your Company remains a significant financier to its customers in semi-urban and rural geographies by providing a wide range of easy and affordable products and services designed to suit their cashflow cycles. Your Company expanded vide its channel connect with leading car dealers. Your Company has retained its leadership position in financing the Mahindra range of vehicles and tractors in addition to extending its lending to vehicles of other leading Auto Original Equipment Manufacturers (OEMs). Your Company has aggressively pursued financing of pre-owned vehicles and used tractors. The demand for both new and used automobiles for the second consecutive year saw a substantial dip due to subdued load factors, and supply side constraints leading to poor sentiments and thus a much lower demand. The overall business volumes continued to be low for the Company on the backdrop of certain segments like Taxi, school bus/ van, traders, tourist operators, contracting segments, sand & stone mining applications, etc., opting to refrain from purchasing new vehicles. This further led to overall lower disbursements by your Company. Simultaneously, the earnings of the customers covered in the above mentioned segments were severely impacted due to slowdown of the economy. Hence, the collections were also subdued during most parts of the year. The Regulator did provide timely moratorium which gave support to our customers by allowing them to defer the EMI's by a period of 6 months. A significant majority of our customers availed the benefit under this moratorium scheme. Your Company continued to partner with the customers during these difficult times and offered moratorium to all eligible customers. The agricultural sector was relatively less impacted as monsoons, water levels, yields, support prices were above average and hence resulted in decent farm based cashflows. The second half of the year witnessed some amount of normalcy returning to the market with unlocking of the country. This led to better collection efficiencies starting December 2020. The Government supported Emergency Credit Line Guarantee Scheme (ECLGS) was offered to all eligible customers in the second half of the fiscal to mitigate the difficulties of vehicle users in commercial applications. A few of your Company's

customers took benefit of this scheme to lubricate their working capital.

The Business model got stress-tested for an elongated period of extreme uncertainty on an all-India basis. The flexibility and the elasticity of the model is demonstrated by the return of near normal disbursements and high collection efficiencies in the fourth quarter, as the pandemic started easing out.

Building Blocks for Growth, Efficiency, Customer Experience

A.    Deeper Physical Reach

Your Company has an extensive pan-India distribution network with 1,388 offices spanning across 27 States and 7 Union Territories as of 31^st March, 2021. During the year under review, your Company enhanced its footprint into deeper rural pockets by adding another 156 new branches in its network towards the year-end. Your Company's widespread office network reduces its reliance on any one region in the country. The geographic diversification also mitigates some of the regional, climatic, and cyclical risks, such as heavy monsoons or droughts. In addition, the Company's extensive office network benefits from a decentralized approval system, which allows each office to grow its business organically as well as leverage its customer relationships by offering multiple financial products including distribution of insurance products and mutual funds. Your Company services multiple products through each of its offices, which reduces operating costs and improves total sales. Your Company believes that the challenges inherent in developing an effective office network in rural and semiurban areas have also created opportunities of catering to the diverse financial requirements of its customers by identifying and understanding the needs and aspirations of the people.

B.    Enhancing Digital Reach

Your Company has an enhanced on-line and in-mobile presence to provide a superior digital experience to its customers. Employees, customers and partners are being enabled digitally for all their needs and substantial progress has been made in this direction. Today, the entire lending process is digitally enabled, which has facilitated the EMI collections being received through Digital and on-line means. This year also saw that the challenge posed by the pandemic for collections was to an extent mitigated when customers extensively used our online and App based Digital Channels for making their monthly repayments. In the last quarter of the

fiscal, the total amount collected from the customers by digital means had gone up by 94% compared to the last quarter of the previous year. Your Company and its subsidiaries have embraced digital in performing different activities like customer acquisition, digitally enabled collections, offering Fixed Deposits, Mutual Funds and Insurance products.

C.    Leveraging Technology

Information Technology has enabled the automation and digitisation of processes across the organisation, empowering employees with the workflows and knowledge for efficiency and controls, and engendering newer business products, analytical models, and decision-making tools. The Company's digital channels of multi-lingual website, mobile app, and contact centre too are increasingly popular with the customers. Your Company has successfully leveraged enterprise technology platforms such as enterprise service bus, customer relationship management, mobile application management, data lake and business intelligence. It is at an advanced stage in upgrading its Loan Origination System and Loan Management System capabilities to meet the future growth requirements and to be able to seamlessly service its large customer base and partners in the rural and semi-urban geographies.

D.    Data as Competitive Advantage

Your Company's presence in the rural and semi-urban markets for more than 25 years, working with several profiles gives your Company a huge advantage, in applying Analytics and Artificial Intelligence (AI) on the data leading to customized personalized offerings that are designed and delivered with speed and lower risks. Your Company has launched its proprietary algorithms to offer faster loan approvals at dynamic interest rates to low risk customers which would help in gaining market share, improving portfolio quality and profitability. Customer acquisition, retention, cross selling, and collections will be substantially enhanced with the combined Integrated activation of Digital, Analytics and Technology.

E.    Growth Drivers for Future

Your Company is having several plans to expand its offerings to its customers for growth. Pre-owned Vehicles, used tractors and commercial vehicles have a large opportunity for growing within the vehicle segments while growing the market share for the Company's existing range of products.

Meeting the Non-vehicle Financial needs of customers in the rural and semi-urban regions is another area of opportunity. Products like Personal Loans, Consumer Loans, Farm Related Working Capital Loans, etc., will have a growth focus targeting our large existing customer bases as well as new customers. For this purpose, the Company has formed a strategic business unit (SBU) for its Fintech vertical which will focus on digital lending.

Leasing as a method of Specialized Financing of certain customer segments for both vehicle and beyond is also being set up. Leasing offers an emerging opportunity and will aid in expanding the Financing portfolio in the medium and long term.

SME Lending

The SME lending faced significant head winds during the year due to weak economic environment and slowdown in the auto segment. The COVID-19 pandemic resulted in disruptions across businesses and SMEs also underwent significant stress. As a matter of abundant caution, your Company curtailed disbursements in significantly stressed sectors and supported deserving clients with good track record. Consequently, the Assets Under Management as of March 2021 has de-grown by 34% in comparison to March 2020. Further, your Company focused on strengthening its systems to reduce risk and enhance customer centricity. Your Company also strengthened its product offerings and broadened its tie-ups with more OEMs. It is expected that with these measures your Company would be able to grow its book significantly once the economic activity picks up.

The total value of assets financed stood at Rs. 25,248.9 Crores as compared to Rs. 42,388.2 Crores in the previous year. Total Income grew by 2.7% at Rs. 10,516.8 Crores for the year ended 31^st March, 2021 as compared to Rs. 10,245.1 Crores for the previous year. Profit Before Tax (PBT) declined by 68.6% at Rs. 422.4 Crores as compared to Rs. 1,343.8 Crores for the previous year. Profit After Tax (PAT) declined by 63.0% at Rs. 335.2 Crores as compared to Rs. 906.4 Crores in the previous year. During the year under review, the Assets Under Management stood at Rs. 81,689 Crores as at 31^st March, 2021 as against Rs. 77,160 Crores as at 31^st March, 2020, a growth of 5.9%.

Despite the most difficult times the Gross Stage 3 loan assets stood at an absolute level of Rs. 5,786 Crores, almost the same as that on 31^st March, 2020 (Rs. 5,747 Crores). This was a resilient performance given the backdrop of tough macro conditions and severe logistical issues. However, as the disbursements slowed down in the aftermath of COVID-19 outbreak, the Gross Non-Performing Assets were at 9.0% of closing loan assets as on 31^st March,

2021, a tad higher against 8.4% as on 31^st March, 2020. The Company continued to reassess its credit exposures and made additional ECL overlay even during the year, which stood at Rs. 996 Crores as on 31^st March, 2021 as against Rs. 574 Crores as on 31^st March, 2020. Further, in accordance with the regulatory expectation of the Reserve Bank of India to bring down the Net Non-Performing Asset (NPA) ratio below 4%, the Company recorded an additional provision of Rs. 1,320 Crores during the fourth quarter on Stage 3 loans. Resultantly, the Net NPA ratio of the Company stood at 3.97% as at 31^st March, 2021 as against 5.98% as on 31^st March, 2020. The Stage 3 provisioning coverage ratio stood at 579% as compared to 31% in the previous year.

There has been no change in the nature of business of the Company during the year under review.

FINANCIAL PRODUCTS DISTRIBUTION

During the year under review, your Company has initiated activities to increase the sale of Third Party Products to its customers and increased the fee income of the Company. As a green initiative measure and for the convenience of its investors, your Company has recently launched an Investment portal to enable them to transact in Mutual Funds as well as Fixed Deposits of the Company. The portal is available on the website of the Company under the Investment tab. With the launch of this Investment Solutions portal, your Company aims to increase the sales of third party investment products via the digital route along with other channels such as its branch network and a dedicated team to sell these products to its clients.

The Company's Assets under Management for distribution of Mutual Fund Products (MFP) as on 31^st March, 2021 stood at Rs. 2,900 Crores, which grew 109% as compared to the AUM as on 31^st March, 2020. Further, sales of other Third Party Products such as mutual funds, insurance, bonds & debentures, etc., grew from Rs. 309 Crores in FY 2019-20 to Rs. 482 Crores in FY 2020-21, recording a growth of 56% over the corresponding period in the previous year. Your Company has also implemented a customer service process as well as a process for evaluation and recommendation of Mutual Fund schemes. All these initiatives will lead to an increase in fee based income in the coming years.

MORATORIUM OF LOANS

As mentioned in the previous Annual Report and in accordance with the Board approved Moratorium Policy read with the Reserve Bank of India ('RBI') guidelines dated 27^th March, 2020, 17^th April, 2020 and 23^rd May, 2020 relating to 'COVID-19 - Regulatory Package', your Company has granted moratorium up to six months on the payment of installments which became due between 1^st March,

2020 and 31^st August, 2020 to all eligible borrowers. This relaxation did not automatically trigger a significant increase in credit risk. During the year under review, 81% of the customers have availed of the moratorium facility offered by the Company.

The Government of India, Ministry of Finance, vide its notification dated 23^rd October, 2020, had announced COVID-19 Relief Scheme ('the Scheme') for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts as per the eligibility criteria and other aspects specified therein and irrespective of whether the RBI moratorium was availed or not. Accordingly, your Company has credited an ex-gratia amount of Rs. 110.27 Crores in the accounts of the eligible borrowers. The Company filed a claim with the State Bank of India for reimbursement of the said ex-gratia amount as specified in the notification and has received an amount of Rs. 109.28 Crores towards the same on 31^st March, 2021.

Further, in connection with the judgment of the Hon'ble Supreme Court of India in the matter of Small Scale Industrial Manufacturers Association vs LIOI & Ors. and other connected matters dated 23^rd March, 2021 and as advised by RBI vide its Circular No. RBI/2021-22/17 DOR. STR.REC.4/21.04.048/2021-22 dated 7^th April, 2021, and the Indian Banks' Association ('IBA') advisory letter dated 19^th April, 2021, your Company has put in place a Board approved Policy to refund/ adjust the 'interest on interest' charged to the borrowers, not covered under the Ex-gratia Scheme, for the moratorium period i.e. 1^st March, 2020 to 31^st August, 2020. The Company has made an estimated provision of Rs. 31.75 Crores as on 31^st March, 2021 towards this.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with the applicable provisions of the Master Direction issued by the Reserve Bank of India and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a detailed analysis of the Company's performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

CORPORATE GOVERNANCE

Your Company practices a culture that is built on core values and ethical governance practices. Your Company is committed to transparency in all its dealings and places high emphasis on business ethics.

In accordance with the applicable provisions of the Master Direction issued by the Reserve Bank of India and the

Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance along with a Certificate from Messrs. KSR & Co., Company Secretaries LLP regarding compliance with the conditions of Corporate Governance as stipulated in Regulations 17 to 27, clauses (b) to (i) of sub-regulation (2) of Regulation 46 and paragraphs C, D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of the Annual Report.

SHARE CAPITAL

The Members at their Extraordinary General Meeting held on 30^th June, 2020, have approved the increase in the Authorised Share Capital of the Company from Rs. 190,00,00,000 (Rupees One Hundred Ninety Crores) divided into 70,00,00,000 (Seventy Crores) Equity Shares of Rs. 2 (Rupees Two) each of the Company and 50,00,000 (Fifty Lakhs) Redeemable Preference Shares of Rs. 100 (Rupees Hundred) each of the Company to Rs. 550,00,00,000 (Rupees Five Hundred Fifty Crores) divided into 250,00,00,000 (Two Hundred Fifty Crores) Equity Shares of Rs. 2 (Rupees Two) each of the Company and 50,00,000 (Fifty Lakhs) Redeemable Preference Shares of Rs. 100 (Rupees Hundred) each of the Company by creation of additional 180,00,00,000 (One Hundred Eighty Crores) Equity Shares of Rs. 2 (Rupees Two) each.

Rights Issue of Equity Shares

During the year under review, your Company has allotted

61.77.64.960    Equity Shares of the face value of Rs. 2 each for cash at a price of Rs. 50 per Equity Share (including premium of Rs. 48 per Share) in the ratio of 1 (one) Rights Equity Share for every 1 (one) fully paid-up Equity Share of the Company, held by the eligible Equity Shareholders on the Record Date i.e. 23^rd July, 2020. The Issue opened on 28^th July, 2020, and closed on 11^th August, 2020. The Rights offering by your Company received a very satisfactory response, as seen by the high levels of subscription and strong participation from Shareholders and investors, and was over-subscribed approximately by 1.3 times of the Issue Size. The Company received the approval from Stock Exchanges for listing on 19^th August, 2020 and trading of Rights Equity Shares on 20^th August, 2020.

The proceeds from the Rights Issue have been fully utilised for the objects of the Rights Issue as mentioned in the Letter of Offer filed with the Securities and Exchange Board of India.

Consequently, pursuant to the allotment of Rights Shares on 17^th August, 2020, the issued, subscribed and paid-up Equity Share Capital of the Company stands increased from

61.77.64.960    Equity Shares to 123,55,29,920 Equity Shares of the face value of Rs.2 each, fully paid-up.

 

2020, an improvement of 1.1 percent over the previous prediction in October 2020. The silver lining remains the development and growing coverage of the vaccines which is lifting the sentiment.

The progress of the virus has been slowed with the help of social distancing, increase in availability of vaccines and treatment protocols. However, the health infrastructure of many countries is reeling under the pressure of second and third wave. New restrictions are introduced in countries facing such challenges indicating the recovery to be uneven and still in some distance.

Outlook

The global growth projected is at 6.0 percent in 2021, which thereafter moderates to 4.4 percent in 2022. A lot of this shall depend upon the path of health crisis and the coordinated policy actions taken to limit economic damage. The growth for advanced economies is projected at 5.1 percent in 2021 [vis-a-vis de-growth of -4.7% in 2020] compared to a growth of 6.7 percent in 2021 for emerging and developing economies [vis-a-vis de-growth of -2.2% in 2020].

With varied outlook for different countries, the macro policy objectives still remain as the need to overcome the existing health crisis and returning employment to normal levels. The expectation based on availability of vaccines suggest local transmission to reduce everywhere by end of 2022.

Domestic Economy

The scenario in the Indian economy is much like many other countries where a gradual improvement in macro indicators has been seen. The positives include the resilience demonstrated in rural demand which remained buoyant and had record agriculture production in FY 2020-21. Urban demand has gained strength on the backdrop of normalization of business activity.

The anticipated improvement in economic activity is however held back with new mutations resulting in renewed jump in COVID-19 cases. Associated local lockdowns, which are now prevalent in many States, shall dampen demand for contact intensive services, restrain growth and prolong the return to normalcy. The silver lining remains the expectation of normal monsoon in the current year.

RBI projects the real GDP growth for FY 2021-22 to be at 10.5 percent. These growth expectations may undergo a change as the decisions on lockdowns have increased across States with the number of cases in the second wave now surpassing the numbers during those seen in the previous peak.

[Source: IMF, RBI]

 

The issued, subscribed and paid-up Equity Share Capital as on 31^st March, 2021 was Rs. 247.11 Crores, comprising 123,55,29,920 Equity Shares of the face value of Rs. 2 each, fully paid-up.

During the year, the Company has not issued any sweat equity shares or equity shares with differential voting rights.

As on 31^st March, 2021, none of the Directors of the Company holds instruments convertible into Equity Shares of the Company.

STOCK OPTIONS

During the year under review, no Options were granted to Eligible Employees under the Mahindra & Mahindra Financial Services Limited Employees' Stock Option Scheme-2010 [“2010 Scheme”]. The Company does not have any scheme to fund its employees to purchase the shares of the Company. No employee has been issued stock options during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant.

The 2010 Scheme of the Company is in compliance with the Securities and Exchange Board of India [Share Based Employee Benefits] Regulations, 2014 [“SBEB Regulations”] and there were no material changes made to the said Scheme. A Certificate from Messrs. B S R & Co. LLP, Chartered Accountants, Statutory Auditors of the Company, pursuant to Regulation 13 of the SBEB Regulations would be available for inspection by the Members through electronic mode.

Voting rights on the Shares issued to employees under the aforesaid Scheme are either exercised by them directly or through their appointed proxy.

The details of the Employees' Stock Options and the Company's Employees' Stock Option Trust as required under the SBEB Regulations read with SEBI Circular CIR/CFD/ POLICY CELL/2/2015 dated 16^th June, 2015 have been uploaded on the Company's website and can be accessed at the web-link: https://mahindrafinance.com/investor-zone/financial-information.

ECONOMY

Global and Domestic Growth

With completion of one year of the pandemic, the work lying before administrations to provide health care and vaccines continues to remain daunting. The human toll and loss of economic activity caused by the pandemic is unprecedented which could have been much worse, but for the timely intervention and policy support provided across administrations. The global economic activity is estimated to have contracted by -3.3 percent in Calendar Year [CY]

Finance

During the first eight months of the year under review (Apr-Nov 2020), Retail price inflation continued to be higher than the RBI's upper margin of 6%. It fell sharply in November 2020 with food inflation coming down and has since moved up again but within the RBI's upper margin. Having reduced policy repo rate in the first quarter of FY 2021 from 4.40% to 4.00%, the RBI since then, has maintained status quo in the key policy rates, along with continuing an accommodative stance until necessary to sustain growth on a durable basis.

The Government of India and the Reserve Bank of India have taken a series of actions during the year which has assisted the financial sector including the NBFC industry to wither the pandemic storm. These included, amongst others, reducing the benchmark rates, announcing moratorium for six months, restructuring scheme for a set of eligible borrowers and long-term repo operations to make easier access to liquidity. These actions led to stabilization of the financial sector with significant liquidity buffers being maintained across companies.

At the start of the fiscal year [April 2020), 10-year G-Sec benchmark yields (6.45% GS 2029), was trading at 6.14% levels. The new benchmark (5.85% GS 2030) closed the year at 6.18%. The yields during the year remained range bound as policy actions aimed at ensuring steady supply of funds. During the year, the INR appreciated by 2.5 percent from INR 75.39 to INR 73.50 per USD after a sharp depreciation of 9.0 percent during the previous year.

Your Company has been identified as a “Large Corporate” under the framework provided by the Securities and Exchange Board of India and accordingly, has ensured that more than 25% of its incremental borrowings during the year was by way of issuance of Debt securities.

During the year under review, your Company continued with its diverse methods of sourcing funds in addition to regular borrowings like Secured and Unsecured Debentures, Term Loans, Fixed Deposits, Commercial Papers, etc., and maintained prudential Asset Liability match throughout the year. Your Company sourced long-term debentures and loans from banks and other institutions at attractive rates. Your Company continues to expand its borrowing profile by tapping into new lenders and geographies.

During the year, your Company has successfully completed 3 securitisation transactions aggregating to Rs.5,120.30 Crores and raised JPY 15 billion (Rs. 1,063.50 Crores) through External Commercial Borrowings.

Private Placement Issues of Non-Convertible Debentures

During the year under review, your Company issued Secured/Unsecured Redeemable Non-Convertible Debentures including Secured Redeemable Principal Protected Non-Convertible Market Linked Debentures (“NCDs”) and raised an amount aggregating to Rs. 4,815.90 Crores on a private placement basis, in various tranches. The NCDs are listed on the debt market segment of the BSE Limited.

Details of all the above-mentioned issues were provided to the Board on a periodic basis.

As specified in the respective offer documents, the funds raised from NCDs were utilised for various financing activities, onward lending, to repay existing indebtedness, working capital and general corporate purposes of the Company. Details of the end-use of funds were furnished to the Audit Committee on a quarterly basis.

The Company is in compliance with the applicable guidelines issued by the Reserve Bank of India, as amended from time to time.

The Company has been regular in making payments of principal and interest on all the NCDs issued by the Company on a private placement basis and through public issue. There are no NCDs which have not been claimed by investors or not paid by the Company after the date on which the NCDs became due for redemption.

Commercial Paper

As at 31^st March, 2021, the Company had Commercial Paper (CPs) with an outstanding amount (face value) of Rs. 500 Crores. CPs constituted 0.8% of the outstanding borrowings as at 31^st March, 2021. The CPs of the Company are listed on the debt market segment of the National Stock Exchange of India Limited.

Rupee Denominated Medium Term Note

Under the Company's Medium Term Note Programme, the Company has not raised any funds through Rupee denominated bonds during the year.

INVESTOR RELATIONS

Your Company has done multiple interactions with Domestic and International investors/analysts during the current year. Given the ongoing pandemic, all such meetings were

done through use of technology i.e. conference calls, videoconferencing. Your Company attended multiple investor meets organised by reputed Global and Domestic Broking Houses during the year, to communicate details of its performance, important regulatory and market developments and exchange of information. Roadshows were held during the year with Domestic and International investors on the backdrop of the Rights Issue undertaken to strengthen the Capital Adequacy. Quarterly and annual earnings calls were scheduled through structured conference calls to keep various stakeholders informed about the past performance and future outlook of the industry, especially those having a bearing on the Company. These interactions with institutional shareholders, fund managers and analysts are based on generally available information that is accessible to the public on a non-discriminatory basis. Your Company uploads the transcript of the quarterly earnings calls on its website which can be accessed by existing and potential investors and lenders. Your Company shall continue to make effective

Your Company believes in transparent communication and building a relationship of mutual understanding and trust. Your Company further ensures that critical information about the Company is available to all the investors by hosting such information on the Company's website.

CAPITAL ADEQUACY

As on 31^st March, 2021, the Capital to Risk Assets Ratio (CRAR) of your Company was 26.0% which is well above the minimum requirement of 15% CRAR prescribed by the Reserve Bank of India.

Out of the above, Tier I capital adequacy ratio stood at 22.2% and Tier II capital adequacy ratio stood at 3.8% respectively.

RBI GUIDELINES

The Company continues to comply with all the applicable regulations prescribed by the Reserve Bank of India (“RBI”), from time to time.

CREDIT RATING

Your Company believes that its credit rating and strong brand equity enables it to borrow funds at competitive rates. The credit rating details of the Company as on 31^st March, 2021 were as follows:

Rating Agency	Type of Instrument	Credit Rating*	Remarks
India Ratings & Research Private Limited	Commercial Paper Programme and Bank Facilities (Fund/Non-Fund Based Working Capital Limit)	IND A1 +	The 'A1'+ rating indicates the Highest Level of Rating. Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
Â	Long-term (incl. MLD) Debt instruments, Subordinated Debt Programme and Bank Facilities (Fund/Non-Fund Based Working Capital Limit)	IND AAA/Stable IND PP-MLD AAA emr/Stable	The 'AAA' ratings denote the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. 'PP-MLD' refers to Principal Protected Market Linked Debentures.
Â	Â	Â	Suffix "emr” denotes the exclusion of the embedded market risk from the rating.
CARE Ratings Limited	Long-term Debt Instruments and Subordinated Debt Programme	CARE AAA/Stable	The 'AAA' ratings denote the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk.
Brickwork Ratings India Private Limited	Long-term Subordinated Debt Programme	BWR AAA/Stable
CRISIL Ratings Limited	Fixed Deposit Programme	CRISIL FAAA/ Stable	Â
Â	Commercial Paper Programme and Bank Loan Facilities	CRISIL A1 +	The 'A1'+ rating indicates the Highest Level of Rating. Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
Â	Long-term Debt Instruments, Subordinated Debt Programme and Bank Loan Facilities	CRISIL AA+/ Stable	The 'AA+' rating indicates a high degree of safety with regard to timely payment of financial obligations. Such instruments carry very low credit risk.

ACHIEVEMENTS

Awards/Recognition received by your Company during the year are enumerated hereunder:

Marketing:

Won the Silver Award in the category of 'New on ground property of the year' at the Rural Marketing Association of India [Flame Awards] for the Gram Pravesh initiatives of the Company.

CSR & Sustainability:

Included in the renowned FTSE4Good Index Series for the second year.

Ranked 48^th amongst Top 100 Indian companies for Sustainability & CSR under Responsible Business Rankings 2020 by Futurescape.

Attained performance band: B in the Carbon Disclosure Project Assessment 2019-20.

Included in 'DJSI Sustainability Yearbook 2021'

Human Resources:

Recognized among “India's Best Workplaces in Career Management 2020” by Great Place to Work® Institute.

FIXED DEPOSITS AND LOANS/ ADVANCES

Your Company offers a wide range of Fixed Deposit schemes that cater to the investment needs of various classes of investors. These Deposits carry attractive interest rates with superior service enabled by robust processes and technology. In order to tap rural and semi-urban savings, your Company continues to expand its network and make its presence felt in the most remote areas of the country.

During the year, CRISIL has reaffirmed a rating of 'CRISIL FAAA/Stable' for your Company's Fixed Deposits. This rating represents the highest degree of safety regarding timely servicing of financial obligations and carries the lowest credit risk. Your Company's Deposits continue to be a preferred investment amongst the investors.

As on 31^st March, 2021, your Company has mobilised funds from Fixed Deposits to the tune of Rs. 9,481.16 Crores, with an investor base of over 1,96,278 investors.

Your Company continues to serve the investors by introducing several customer centric measures on an ongoing basis to further strengthen its processes in sync with the requirements of the Fixed Deposit holders. The

Company periodically communicates various intimations via SMS, e-mails, post, courier, etc., to its investors as well as sends reminder emails to Depositors whose TDS is likely to be deducted before any pay-out/accrual. Your Company also provides a digital platform for online application/renewal of deposits, online generation of TDS certificates from customer/broker portal and seamless investment process for employees.

During the year under review, your Company has rolled out several initiatives aimed at offering a superior customer experience. Some key ones are:

An integrated web portal has been developed to facilitate online application/online renewal of Fixed Deposits, Loan against FDs, profile updates, etc.

Online submission of Forms 15 G/15H by all eligible Depositors through the FD Customer portal is made available on the Company's website.

TDS certificate^] are made available in the Customer portal and Broker portal, in addition to the same being sent to the concerned Depositors, from time to time.

In order to offer various payment options to Depositors, more payment gateways have been added across various FD investment portals.

An advanced version of Customer Relationship Management [CRM] has been launched to record the queries, requests and complaints for future data analysis in order to enhance customer service.

An integrated service portal [E-Sarathi] has been introduced to address the queries of Depositors routed through the Channel Partners on real-time basis during working hours.

The process of recording Central Know Your Customer [CKYC] details of the Depositors has been strengthened by introducing various control measures.

As at 31^st March, 2021, 6,052 Deposits amounting to Rs. 5.41 Crores had matured for payment and remained unclaimed. The unclaimed Deposits have since reduced to 5,882 Deposits amounting to Rs. 5.17 Crores. There has been no default in repayment of Deposits or payment of interest during the year.

Your Company being a Non-Banking Financial Company, the disclosures required as per Rule 8 [5] [v] and [vi] of the Companies [Accounts] Rules, 2014 read with Sections 73 and 74 of the Companies Act, 2013, are not applicable to it.

The information pursuant to Clause 35[1] of Master Direction DNBR.PD.002/ 03.10.119/2016-17 dated 25^th

August, 2016 issued by the Reserve Bank of India on Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016, regarding unpaid/unclaimed public deposits as on 31^st March, 2021, is furnished below:

i.    total number of accounts of Public Deposits of the Company which have not been claimed by the depositors or not paid by the Company after the date on which the deposit became due for repayment: 6,052.

ii.    total amounts due under such accounts remaining unclaimed or unpaid beyond the dates referred to in clause (i) as aforesaid: Rs. 5,41,47,729.

Depositors were intimated regarding the maturity of deposits with a request to either renew or claim their Deposits. Your Company regularly sends letters/reminders via email to all those Fixed Deposit holders whose Deposits have matured as well as to those whose Deposits remain unclaimed. Where the Deposit remains unclaimed, followup action is also initiated through the concerned agent or branch.

Pursuant to Section 125(2) (i) of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('the IEPF Rules') as amended from time to time, matured Deposits remaining unclaimed for a period of seven years from the date they became due for payment are required to be transferred to the Investor Education and Protection Fund (IEPF) Authority established by the Central Government. Further, interest accrued on the matured deposits which remain unclaimed for a period of seven years from the date of payment will also be transferred to the IEPF under Section 125(2) (k). The concerned depositor can claim the Deposit and/or interest from the IEPF Authority by following the procedure laid down in the IEPF Rules.

During the year, an amount of Rs. 011 Crores has been transferred to the IEPF Authority.

During the year under review, the Company has not given any loans and advances in the nature of loans to its subsidiaries or associate(s) or loans and advances in the nature of loans to firms/companies in which Directors are interested.

Accordingly, the disclosure of particulars of loans/advances, etc., as required to be furnished in the Annual Accounts of the Company pursuant to Regulations 34 (3) and 53 (f) read with paragraph A of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable to the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS IN SECURITIES

Pursuant to Section 186(11) of the Companies Act, 2013 (“the Act”), the provisions of Section 186(4) of the Act requiring disclosure in the Financial Statements of the full particulars of the loans made and guarantees given or securities provided by a Non-Banking Financial Company in the ordinary course of its business and the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient of the loan or guarantee or security are exempted from disclosure in the Annual Report.

Further, pursuant to the provisions of Section 186(4) of the Act, the details of investments made by the Company are given in the Notes to the Financial Statements.

SUSTAINABILITY INITIATIVES

Sustainability has been deeply embedded in the Company's business model from the very beginning. At the heart of our organizational strategy is an inclusive business model which enables the residents of semi-urban and rural India to access formal channels of credit/finance, helping them create long-term value. In line with the Mahindra Group's motto: 'Rise for Good' your Company is also gearing up to be future ready by making sustainability and climate change an integral part of the business strategy and risk framework. Your Company has been enabling customers to meet their aspirations through a diversified portfolio of financial product offerings. It helps people build their homes through affordable housing finance solutions provided by Mahindra Rural Housing Finance Limited, secure their life and assets with insurance solutions facilitated by Mahindra Insurance Brokers Limited and offers investment options through its asset management subsidiary Mahindra Manulife Investment Management Private Limited. By providing the right set of opportunities and prospects in the remote areas, your Company has helped customers to forge ahead. The Company lays strong emphasis on customer centricity. Its customer base is spread across more than 3.80 lakh villages in India, with majority of them belonging to the 'Earn and Pay' segment.

Your Company commenced its journey towards reporting sustainability performance in 2008-09 through Mahindra Group's Sustainability Report and in the year 2012-13 the Company released its first standalone Sustainability Report. In FY 2019-20, the Company released its Eighth Sustainability Report with the theme “Positive & Promising”. The Report adheres to the Global Reporting Initiative's (GRI) Standards and is based on the Integrated Reporting framework. The Report is externally assured by KPMG.

The Content index has been checked by GRI and carries the GRI logo. FY 2019-20 was truly a year of building sustainable resilience for the Group Financial Services Sector. The “Positive & Promising” theme of the Report shows that despite a variety of challenges through the year, the Company collectively stayed true to its core purpose and values, helping its customers, teams and communities realize their true potential.

This Report is hosted on the Company's website and can be accessed at: https://mahindrafinance.com/ media/383687/mahindra-finance-sustainability-report-2019-20.pdf.

Your Company continued to focus on integrating Sustainability into the business practices and on building awareness for different stakeholders by taking various initiatives to engage them. In FY 2018-19, your Company became the 1^st Financial Company in India to be committed towards call to action for Science Based Targets.

The Science Based Targets initiative (SBTi) requires companies to publicly commit to setting carbon emission reduction targets that are in line with climate science.

Your Company was recognized for its Sustainability initiatives during the year under review, with the following accolades:

Included in the renowned FTSE4Good Emerging Markets Index series for ESG Performance for the 2^nd time. FTSE4Good is an equity index series that is designed to facilitate investment in companies that meet globally recognised corporate responsibility standards. It is designed to measure the performance of companies demonstrating strong Environmental, Social and Governance practices.

Ranked 48^th amongst Top 100 Indian companies for Sustainability & CSR under Responsible Business Rankings 2020 by Futurescape.

Included in the 'Dow Jones Sustainability Indices' Sustainability Yearbook 2021 (the only Indian Company among the Diversified Financial Services Companies to feature in the same).

Attained performance band “B” in the Carbon Disclosure Project (CDP) assessment 2020-21, greater than the Sector average and Asia Regional average.

Selected as the winner of the 'The Mahindra Group Sustainability Performance Award, 2020'.

Your Company's approach has been to make its environmental disclosure transparent, and accordingly,

 

it has been reporting disclosures and reports on its performance through the Carbon Disclosure Project (CDP) India since Financial Year 2011-12.

Sensitising the employees to a novel concept such as Sustainability has been one of the key initiatives of the Company during the year. Capacity building on Sustainability has been driven by Sustainability Courses on the learning platform. The Company launched a module on Human Rights in the reporting year and made it mandatory for all the employees. The Mahindra Group and the United Nations have partnered to offer a Course on Climate change for its employees.

During the year, your Company made proactive efforts to reduce CO2 emissions (carbon footprint) through Project “Mahindra Hariyali” by planting more than 30,000 saplings throughout the country.

Your Company is gearing up to be future ready by making sustainability and climate change an integral part of its risk framework and taking measures to mitigate and manage them. In the reporting year, the Company has enhanced its existing Risk Register by including applicable Climate change risks. Weather reports are assessed on a regular basis and aligned with business operations to protect the customers and minimize the risk impact. The outlook for the future has been positive and your Company is well equipped to enable its customers and communities to progress through its inclusive and sustainable business model.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report (“BRR”) of your Company for the year 2020-21 forms part of this Annual Report as required under Regulation 34(2)(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is appended as “Annexure II”.

Your Company is building an inclusive organisation by empowering all the stakeholders and facilitating their contribution towards growth that is both holistic and long term. Through the inclusive business model, your Company endeavours to cater to the bottom of the pyramid in the rural and semi-urban areas, enabling them to earn their livelihood through varied financial products and services. Your Company has always been conscious of its role as a responsible corporate citizen. Through its wide network of branches with locally-recruited employees, strong and lasting relationships with its stakeholders, large customer base, vast experience and market knowledge, your Company is providing financial resources to underserviced regions of the country.

The BRR can also be accessed on the Company's website at: https://mahindrafinance.com/discover-mahindra-finance/sustainability.

INTEGRATED REPORTING

Your Company is pleased to present its first Integrated Report, which encompasses both financial and non-financial information to enable Members to have a more holistic understanding of the Company's long-term perspective. This Integrated Report forms part of the Annual Report and is in consonance with the SEBI Circular dated 6^th February, 2017 An Integrated Report takes corporate reporting beyond just discussing the financial resources, since any value creation activity requires other resources like people, natural resources and business relationships.

The Integrated Annual Report for the year 2020-21 includes details such as the organisation's strategy, governance framework, performance and prospects of value creation based on the six (6) forms of capital viz. financial capital, manufactured capital, intellectual capital, human capital, social and relationship capital and natural capital.

The Integrated Annual Report for the year 2020-21 is hosted on the Company's website and can be accessed at the web-link: https://www.mahindrafinance.com/investor-zone/financial-information/

Since 2012-13, the Company has been annually publishing a Sustainability Report conforming to the guidelines of the Global Reporting Initiative ("GRI”). These Reports adhere to the GRI standards and are based on the Integrated Reporting framework and have been externally assured. This year the Sustainability Report has been combined with the Integrated Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

With a vision to transform rural and semi-urban India into a self-reliant, flourishing landscape, Mahindra Finance started its journey in 1991 and grew into a leading NBFC with an employee base of around 20,000 employees all over India. By supporting about 23 NGOs and implementing partners in the areas of Education & Livelihood, Healthcare and Environment, the Company strives to become an asset in the communities where it operates. Your Company's Corporate Social Responsibility ['CSR'] initiatives are aligned with the mission of transforming rural lives and hence focus on areas such as Education & Livelihood, Healthcare and Environment.

In FY 2021, to consolidate and further strengthen its endeavor to support drivers, your Company launched its flagship program-"SWABHIMAAN a holistic driver development program”.

This program is initiated to address the professional, financial, and familial challenges faced by the drivers and their families and further contribute to their overall wellbeing. This multi-year program aims to benefit over 75,000 beneficiaries through key interventions focusing on various aspects of a driver's life. Your Company will provide driver's training to freshers, road safety training to existing drivers, auto mechanic training to women, financial planning workshops, accidental and health insurance policy to drivers and award scholarships to driver's children.

Your Company continued its support to People with Disabilities [PwDs] by training them under 'Hunnar' program in various skills in BFSI, hospitality and ITES sectors to enhance their employability. 365 people with disabilities were trained and 274 were placed in jobs. The Company also conducted awareness campaigns about sanitation and hygiene under Healthcare and Swachh Bharat initiatives.

Reaffirming its commitment to the cause of education, your Company continued its support to the Nanhi Kali Program which has benefitted over 10,800 underprivileged girl children from socially and economically marginalized families living in urban, rural, and tribal parts of India. Your Company, to promote inclusive socio-economic growth of the marginalized youth, continued its support to Mahindra Pride School which skilled 1,822 youth and 100% have been placed. Further, Mahindra Pride Classrooms supported an additional 20 hours of online training to 30,627 final year students covering English Speaking, Life Skills, Aptitude, Interview, Group Discussion and Digital Literacy through Polytechnics and Arts & Science Colleges.

To continue with its commitment to increase the green cover, your Company's employees participated in the Mahindra Hariyali project. Employees from most of the branches, planted more than 30,000 saplings in selected locations.

Your Company provided ration kits to more than 5,000 drivers and their families affected by the COVID-19 pandemic across multiple States in India.

Apart from the key thrust areas, your Company contributed funds for other causes such as preservation and promotion of the fine arts and culture and supporting orphanage homes, differently abled homes and homes for the elderly to re-affirm its pledge to strive for a better society.

During the year under review, your Company has spent Rs. 32.54 Crores towards Corporate Social Responsibility on various CSR projects and programs. This includes the contribution of Rs. 517 Crores made to PM Cares Fund in the Financial Year 2019-20, which has been off-set against the CSR spend of the Financial Year 2020-21 as per the Notification D.O. No 05/1/2020-CSR-MCA dated 30^th March, 2020 issued by the Ministry of Corporate Affairs. Your Company is in compliance with the statutory requirements in this regard.

CSR COMMITTEE

The Company has duly constituted a CSR Committee in accordance with Section 135 of the Companies Act, 2013 to assist the Board and the Company in fulfilling the corporate social responsibility objectives of the Company.

Consequent upon the resignation of Dr. Anish Shah as a Member of the Committee with effect from 16^th May, 2020 and cessation of Mr. V. Ravi, Member, as Executive Director & Chief Financial Officer of the Company with effect from 25^th July, 2020, the Committee presently comprises of the following Directors:

 

Name	Category
Mr. Dhananjay Mungale	- Chairman of the Committee (Independent Director)
Ms. Rama Bijapurkar	- Independent Director
Mr. Ramesh Iyer	- Vice-Chairman & Managing Director

 

During the year under review, 4 (four) CSR Committee Meetings were held, details of which are provided in the Corporate Governance Report.

CSR POLICY

During the year under review, the Board based on the recommendation of the CSR Committee, amended the CSR Policy to align the same in accordance with the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 and Section 135 of the Companies Act, 2013, as amended, effective from 22^nd January, 2021.

The revised CSR Policy is hosted on the Company's website and can be accessed at the web-link: https:// www.mahindrafinance.com/investor-zone/corporate-governance. The detailed Annual Report on the CSR activities undertaken by your Company during the year, as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is set out in “Annexure III” of this Report.

ANNUAL RETURN

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return as on 31^st March, 2021 in Form No. MGT-7, is available on the Company's website and can be accessed at the web-link: https://www.mahindrafinance.com/investor-zone/financial-information.

BOARD MEETINGS, EXTRAORDINARY GENERAL MEETING AND ANNUAL GENERAL MEETING

The calendar of the Board/Committee Meetings and the Annual General Meeting is circulated to the Directors in advance to enable them to plan their schedule for effective participation at the respective meetings. Additional Board Meetings are convened by giving appropriate notice to address business exigencies. Apart from Meetings, at times, certain decisions are taken by the Board/Committee(s) through Circular Resolutions, after a discussion over a conference call between Board/Committee Members.

All the decisions and urgent matters approved by way of Circular Resolutions/Circular Note are placed and noted at the subsequent Board/Committee Meeting(s).

The Board of Directors met seven times during the year under review, on 15^th May, 2020, 1^st June, 2020, 18^th July, 2020, 18^th September, 2020, 26^th October, 2020, 28^th January, 2021 and 5^th March, 2021. The requisite quorum was present for all the Meetings. The maximum time gap between any two Meetings was not more than one hundred and twenty days. These Meetings were well attended. The 30^th Annual General Meeting ('AGM') of the Company was held on 10^th August, 2020.

During the year under review, an Extraordinary General Meeting ('EGM') of the Members was held on 30^th June, 2020 to approve the increase in the Authorised Share Capital of the Company and consequential amendment(s) to the Capital Clause of the Memorandum of Association of the Company.

Detailed information on the Meetings of the Board, its Committees, EGM and the AGM is included in the Report on Corporate Governance, which forms part of this Annual Report.

MEETINGS OF INDEPENDENT DIRECTORS

The Independent Directors met twice during the year under review, on 13^th August, 2020 and 4^th March, 2021. The Meetings were conducted in an informal manner without the presence of the Whole-time Director(s), the Non-Executive Non-Independent Directors, or any other Management Personnel.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company has various Committees which have been constituted as a part of good corporate governance practices and the same are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

Audit Committee

As on 31^st March, 2021, the Audit Committee comprised of four Independent Directors and one Non-Executive NonIndependent Director:

Name	Category
Mr. C. B. Bhave	Chairman of the Committee (Independent Director)
Mr. Dhananjay Mungale	Independent Director
Ms. Rama Bijapurkar	Independent Director
Mr. Milind Sarwate	Independent Director
Dr. Anish Shah	Non-Fxec.iit.ive Non-Independent Director

Changes in Committee Members during the year:

•    Mr. V. S. Parthasarathy ceased to be a Member of the Committee consequent upon his resignation as a NonExecutive Non-Independent Director of the Company with effect from 18^th September, 2020.

•    Mr. Amit Raje, Non-Executive Non-Independent Director of the Company was appointed as a Member of the Committee with effect from 28^th January, 2021.

Pursuant to his appointment as a Whole-time Director of the Company with effect from 1^st April, 2021, and in order to be consistent with the principles of good governance, Mr. Amit Raje resigned as a Member of the Audit Committee with effect from 5^th March, 2021.

•    Mr. Arvind V. Sonde ceased to be a Member of the Committee consequent to his resignation as an Independent Director of the Company with effect from 15^th March, 2021.

During the year, 7 (seven) Audit Committee Meetings were held, details of which are provided in the Corporate Governance Report.

The recommendations of the Audit Committee were duly approved and accepted by the Board during the year under review.

Other Board Committees

The other Committees of the Board are:

i)    Nomination and Remuneration Committee

ii)    Stakeholders Relationship Committee

iii)    Corporate Social Responsibility Committee

iv)    Risk Management Committee

v)    Asset Liability Committee

vi)    IT Strategy Committee

vii)    Committee for Strategic Investments

The details with respect to the composition, powers, roles, terms of reference, Meetings held and attendance of the Directors at such Meetings of the relevant Committees are given in detail in the Report on Corporate Governance of the Company which forms part of this Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Chairman of the Board of Directors

i)    Resignation of Mr. Dhananjay Mungale as Chairman of the Board with effect from close of business hours on 1^st April, 2021

Mr. Dhananjay Mungale (DIN: 00007563) stepped down as the Chairman of the Board of Directors with effect from the close of business hours on 1^st April, 2021.

The Board has placed on record its deep appreciation of the contribution and valuable services rendered by Mr. Mungale during his association as Chairman of the Board since 2016.

Mr. Dhananjay Mungale continues to be an Independent Director of the Company.

ii)    Appointment of Dr. Anish Shah as Chairman of the Board of Directors with effect from 2^nd April, 2021

In the light of Mr. Dhananjay Mungale relinquishing his office as Chairman of the Board of Directors of the Company and on the recommendation of the Nomination and Remuneration Committee, the Board at its Meeting held on 28^th January, 2021, appointed Dr. Anish Shah (DIN: 02719429) as Non-Executive Chairman of the Board with effect from 2^nd April, 2021.

?r. Anish Shah is currently the Managing Director and Chief Executive Officer of Mahindra & Mahindra Limited ['M&M'], the Holding Company, with responsibility for the Group Corporate Office and full oversight of all businesses other than the Auto and Farm sectors of M&M.

Appointment/Re-Appointment of Directors Mr. Ramesh Iyer

Re-appointment of Mr. Ramesh Iyer, Managing Director designated as Vice-Chairman & Managing Director

Mr. Ramesh Iyer has been the Managing Director of the Company since 30^th April, 2001 and has played a key role in building Mahindra Finance into one of India's leading rural finance companies, since 1995.

In March 2016, Mr. Iyer was elevated as the Vice-Chairman & Managing Director of the Company.

The term of office of Mr. Ramesh Iyer, Vice-Chairman & Managing Director of the Company, expires on 29^th April, 2021.

On the recommendation of the Nomination and Remuneration Committee ['NRC'], the Board of Directors at its Meeting held on 23^rd April, 2021, has re-appointed Mr. Ramesh Iyer [DIN: 00220759] as the Managing Director, liable to retire by rotation, designated as Vice-Chairman & Managing Director for a period of 3 [three] years with effect from 30^th April, 2021 to 29^th April, 2024 [both days inclusive], subject to the approval of Members at the ensuing Annual General Meeting.

Mr. Amit Raje

Appointment of Mr. Amit Raje as a Non-Executive NonIndependent Director

Pursuant to the recommendation of the NRC, the Board at its Meeting held on 18^th September, 2020, appointed Mr. Amit Raje [DIN: 06809197] as an Additional Non-Executive NonIndependent Director of the Company with effect from 18^th September, 2020, liable to retire by rotation.

The Members of the Company have by means of an Ordinary Resolution passed on 3^rd March, 2021 vide Postal Ballot conducted through Remote E-voting mode, approved the appointment of Mr. Amit Raje as a Non-Executive NonIndependent Director of the Company.

Appointment of Mr. Amit Raje as Whole-time Director of the Company designated as “Chief Operating Officer Digital Finance - Digital Business Unit”

 

The Board of Directors of the Company at its Meeting held on 5^th March, 2021, has on the recommendation of the NRC, appointed Mr. Amit Raje as a Whole-time Director of the Company liable to retire by rotation, designated as “Chief Operating Officer Digital Finance -Digital Business Unit” for a period of 5 [five] years, with effect from 1^st April, 2021 till 31^st March, 2026 [both days inclusive], subject to approval of the Members at the ensuing Annual General Meeting.

Dr. Rebecca Nugent

Appointment of Dr. Rebecca Nugent as an Independent Director of the Company

Based on the recommendation of the NRC and on the proposal of the Board of Directors, Dr. Rebecca Nugent [DIN: 09033085] was appointed as an Independent Director of the Company, to hold office for a term of 5 [five] consecutive years commencing from 5^th March, 2021 to 4^th March, 2026 [both days inclusive], vide an Ordinary Resolution passed by the Members by means of a Postal Ballot through remote e-voting mode on 3^rd March, 2021.

Mr. Amit Kumar Sinha

Appointment of Mr. Amit Kumar Sinha as a Non-Executive Non-Independent Director

Pursuant to the recommendation of the NRC, the Board at its Meeting held on 23^rd April, 2021, appointed Mr. Amit Kumar Sinha [DIN: 09127387] as an Additional Non-Executive NonIndependent Director with effect from 23^rd April, 2021, to hold office up to the date of the ensuing Annual General Meeting ['AGM'] of the Company and thereafter, subject to the approval of the Members at the said AGM, as a NonExecutive Non-Independent Director, liable to retire by rotation.

The Company has received the requisite Notice from a Member in writing proposing his appointment as a Director of the Company.

Cessation of Directors

Mr. V. Ravi

As mentioned in the previous Annual Report, Mr. V. Ravi [DIN: 00307328] ceased to be the Executive Director & Chief Financial Officer of the Company upon completion of his tenure with effect from 25^th July, 2020. The Board has placed on record its deep appreciation of Mr. V. Ravi's immense contribution and valuable services during his long association with the Company and acknowledged Mr. Ravi's outstanding experience and expertise in serving

the Company including the Group's Financial Services Sector companies.

Mr. V. S. Parthasarathy

Resignation of Mr. V. S. Parthasarathy as Non-Executive Non-Independent Director of the Company

Mr. V. S. Parthasarathy (DIN: 00125299) resigned as Non-Executive Non-Independent Director with effect from 18^th September, 2020.

Consequently, Mr. V. S. Parthasarathy also ceased to be a Member of the Audit Committee, Nomination and Remuneration Committee, Risk Management Committee, Asset Liability Committee and Committee for Strategic Investments of the Board effective 18^th September, 2020.

Mr. Parthasarathy joined the Board of Directors of your Company in July 2014. The Board acknowledged Mr. V. S. Parthasarathy's contribution to the Company and has placed on record its appreciation of the invaluable services rendered by Mr. Parthasarathy during his association with the Company.

Mr. Arvind V. Sonde

Resignation of Mr. Arvind V. Sonde as an Independent Director of the Company

Mr. Arvind V. Sonde (DIN: 00053834) was appointed as an Independent Director of the Company by the Members through a Postal Ballot, with effect from 9^th December, 2019 for a term of five years.

Mr. Arvind V. Sonde resigned as a Member of the Board with effect from 15^th March, 2021, due to other professional and family commitments. Mr. Sonde has confirmed that there are no material reasons for his resignation, other than those mentioned in his resignation letter.

Subsequently, Mr. Arvind V. Sonde also ceased to be a Member of the Audit Committee and Risk Management Committee of the Board effective 15^th March, 2021.

The Board has placed on record its sincere appreciation of the valuable services rendered by Mr. Sonde as an Independent Director of the Company.

RETIREMENT BY ROTATION

Mr. Ramesh Iyer retires by rotation and, being eligible, offers himself for re-appointment at the 31^st Annual General Meeting of the Company scheduled to be held on 26^th July, 2021.

Re-appointment of Independent Directors

None of the Independent Directors of the Company is due for re-appointment.

Resignation of Independent Director(s)

During the year under review, except for Mr. Arvind V. Sonde, none of the Independent Directors of the Company had resigned before the expiry of his/her respective tenure(s).

Declaration by Directors

All the Directors of the Company have confirmed that they satisfy the “fit and proper” criteria as prescribed under Chapter XI of RBI Master Direction No. DNBR. PD.008/03.10.119/2016-17 dated 1^st September, 2016, as amended, and that they are not disqualified from being appointed/continuing as Directors in terms of Section 164(2) of the Companies Act, 2013.

Declaration by Independent Directors

All the Independent Directors of the Company have given their respective declarations/disclosures under Section 149(7) of the Companies Act, 2013 ('Act') and Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations') and have confirmed that they fulfill the criteria of Independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations, and have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.

Further, the Board after taking these declarations/ disclosures on record and acknowledging the veracity of the same, concluded that the Independent Directors are persons of integrity and possess the relevant proficiency, expertise and experience to qualify as Independent Directors of the Company and are Independent of the Management of the Company.

In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by the Indian Institute of Corporate Affairs, Manesar ('IICA'). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of 2 (two) years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption.

The Independent Directors of the Company except Dr. Rebecca Nugent, are exempt from the requirement to undertake the online proficiency self-assessment test conducted by IICA. Dr. Rebecca Nugent will be undertaking the said test in due course.

Key Managerial Personnel

The following persons 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:

Mr. Ramesh Iyer, Vice-Chairman & Managing Director.

Mr. Amit Raje, Whole-time Director of the Company designated as “Chief Operating Officer Digital Finance -Digital Business Unit”.

Mr. Vivek Karve, Chief Financial Officer of the Company and Group Financial Services Sector.

Ms. Arnavaz M. Pardiwalla, Company Secretary.

Changes in Key Managerial Personnel Chief Financial Officer

Mr. V. Ravi ceased to be the Chief Financial Officer of the Company on completion of his tenure as Executive Director & Chief Financial Officer with effect from 25^th July, 2020.

Based on the recommendations of the Nomination and Remuneration Committee and the Audit Committee, the Board of Directors of the Company at its Meeting held on 18^th July, 2020 appointed Mr. Vivek Karve as the Chief Financial Officer designated as 'Chief Financial Officer of the Company and Group Financial Services Sector' with effect from 14^th September, 2020.

Directors’ Responsibility Statement

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, (“the Act”) your Directors, based on the representations received from the Operating Management and after due enquiry, confirm that:

i.    in the preparation of the annual accounts for financial year ended 31^st March, 2021, the applicable accounting standards have been followed and there are no material departures in adoption of these standards.

ii.    they have in consultation with the Statutory Auditors selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and

 

fair view of the state of affairs of the Company as at 31^st March, 2021 and of the profit of the Company for the year ended on that date.

iii.    they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv.    they have prepared the annual accounts for financial year ended 31^st March, 2021 on a going concern basis.

v.    they have laid down adequate internal financial controls to be followed by the Company and that such internal financial controls were operating effectively during the financial year ended 31^st March, 2021.

vi.    they have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively during the financial year ended 31^st March, 2021.

Performance Evaluation of the Board

The Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“the Listing Regulations”) stipulate the evaluation of the performance of the Board, its Committees, Individual Directors and the Chairperson.

The Company has formulated a Policy for performance evaluation of the Independent Directors, the Board, its Committees and other individual Directors which includes criteria for performance evaluation of the Non-Executive Directors and Executive Directors.

The evaluation framework for assessing the performance of Directors comprises various key areas such as attendance at Board and Committee Meetings, quality of contribution to Board discussions and decisions, strategic insights or inputs regarding future growth of the Company and its performance, ability to challenge views in a constructive manner, knowledge acquired with regard to the Company's business/activities, understanding of industry and global trends, etc.

The evaluation involves self-evaluation by the Board Member and subsequent assessment by the Board of Directors. A member of the Board will not participate in the discussion of his/her evaluation.

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of 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 the Directors individually [including Independent Directors). The evaluation process was based on the affirmation received from the Independent Directors that they met the independence criteria as required under the Companies Act, 2013, and the Listing Regulations.

Feedback was sought by way of well-defined and structured questionnaires covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, areas of responsibility, execution and performance of specific duties, obligations and governance, compliance, oversight of Company's subsidiaries, etc., and the evaluation was carried out based on responses received from the Directors. The aspects of succession planning were also considered.

A separate exercise was carried out by the Nomination and Remuneration Committee of the Board to evaluate the performance of individual Directors who were evaluated on several parameters such as level of engagement and contribution, independence of judgment safeguarding the interest of the Company and its minority shareholders and knowledge acquired with regard to the Company's business/activities.

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 Directors and Non-Executive Directors.

The performance evaluation of the Independent Directors was carried out by the entire Board excluding the Director being evaluated.

The outcome of the Board Evaluation for the Financial Year 2020-21 was discussed by the Nomination and Remuneration Committee and the Board at their respective meetings held in April 2021. Qualitative comments and suggestions of Directors were taken into consideration by Mr. Dhananjay Mungale, former Chairman of the Board and Mr. C. B. Bhave, former Chairman of the Nomination and Remuneration Committee. The Directors have expressed their satisfaction with the evaluation process.

Familiarisation Programme for Independent Directors

The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the

Company and related matters along with details of number of programmes and number of hours spent by each of the Independent Directors during the Financial Year 2020-21, in terms of the requirements of SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015 are available on the website of the Company and can be accessed at the web-link: https://www.mahindrafinance.com/ media/383820/familiarisation-programme-for-the-f-y-2020-21-website-uploading.pdf

Policies on Appointment of Directors and Senior Management and Remuneration of Directors, Key Managerial Personnel and Employees

i)    Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management

In accordance with the provisions of Section 134[3] [e] of the Companies Act, 2013 [“the Act”] read with Section 178[2] of the Act and Regulation 17 of the SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015, your Company has adopted a Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management, which inter alia, includes the criteria for determining qualifications, positive attributes and independence of Directors, identification of persons who are qualified to become Directors and who may be appointed in the Senior Management team, succession planning for Directors and Senior Management, and the Talent Management framework of the Company.

This Policy is available at the Company's website at the web-link: https://mahindrafinance.com/investor-zone/corporate-governance.

ii)    Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel and Employees of the Company

Your Company has also adopted the Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel and Employees of the Company in accordance with the provisions of sub-section [4] of Section 178 of the Act.

Dr. Anish Shah has been appointed as the Non-Executive Chairman of the Board of Directors with effect from 2^nd April, 2021. Dr. Shah is in the whole-time employment of Mahindra & Mahindra Limited ['M&M'], the Holding Company and draws remuneration from it. Dr. Anish Shah is not paid any sitting fees or remuneration by the Company.

In view of the above, the Policy on Remuneration of Directors has been amended effective 2^nd April, 2021, in line with the aforesaid requirements and administrative changes.

The Policy on Remuneration of Directors, as amended, and the Remuneration Policy for Key Managerial Personnel and Employees of the Company, are appended as “Annexure IV-A” and “Annexure IV-B”, respectively, and form part of this Report. These Polices are also available at the Company's website at the web-link: https://mahindrafinance.com/investor-zone/corporate-governance.

The criteria for determining qualifications, positive attributes and independence of a Director and the Remuneration Policies for Directors, Key Managerial Personnel and other employees have been discussed in detail in the Report on Corporate Governance.

AUDITORS

Statutory Auditors

Messrs. B S R & Co. LLP, Chartered Accountants, (ICAI Firm Registration No.101248W/W-100022), were appointed as Statutory Auditors of the Company at the Twenty-seventh Annual General Meeting ('AGM') to hold office for a period of five consecutive years, commencing from the conclusion of the 27^th AGM held on 24^th July, 2017 till the conclusion of the 32^nd AGM of the Company to be held in the year 2022.

The Statutory Auditors have given a confirmation to the effect that they are eligible to continue with their appointment and that they have not been disqualified in any manner from continuing as Statutory Auditors. The remuneration payable to the Statutory Auditors shall be determined by the Board of Directors based on the recommendation of the Audit Committee.

The Report given by the Auditors on the Financial Statements of the Company for the Financial Year 2020-21 is a part of the Annual Report. The Report is unmodified and does not contain any qualification, reservation, adverse remark or disclaimer.

The Statutory Auditors were present at the last AGM. Secretarial Auditor

The Board of Directors of the Company has appointed Messrs. KSR & Co., Company Secretaries LLP to conduct the Secretarial Audit of the Company pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. In accordance with the

 

f provisions of sub-section (1) of Section 204, the Secretarial Audit Report for the Financial Year 2020-21 is appended to j this Report as “Annexure V”.

The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

l The Secretarial Auditor was present at the last AGM.

', Secretarial Audit of Material Unlisted Indian 3 Subsidiary

k Mahindra Rural Housing Finance Limited ('MRHFL), a ^- material subsidiary of the Company undertakes Secretarial Audit every year under Section 204 of the Companies Act, 2013. The Secretarial Audit of MRHFL for the Financial Year 2020-21 was carried out pursuant to Section 204 of the ¹Â Companies Act, 2013 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, ¹Â Â Â Â 2015. The Secretarial Audit Report of MRHFL submitted

by Messrs. KSR & Co., Company Secretaries LLP, does not contain any qualification, reservation or adverse remark or disclaimer. The Secretarial Audit Report is appended as “Annexure VI” and forms part of this Report.

i Cost Records and Cost Audit

³Â Maintenance of cost records and requirement of cost audit ¹Â as prescribed under the provisions of Section 148(1) of the ^ Companies Act, 2013 are not applicable in respect of the

¹Â business activities carried out by the Company. f

Reporting of Frauds by Auditors

3 During the year under review, the Statutory Auditors and t the Secretarial Auditor have not reported any instances i of frauds committed in the Company by its Officers or 3 Employees, to the Audit Committee under Section 143(12) j of the Companies Act, 2013, details of which need to be t mentioned in this Report.

PARTICULARS OF CONTRACTS OR f ARRANGEMENTS WITH RELATED _t^f PARTIES

” All contracts/arrangements/transactions entered into by the Company during the Financial Year with Related Parties were in the ordinary course of business and on an arm's length basis. During the year under review, your Company had not entered into any contract/arrangement/ transaction with Related Parties which could be considered ^ material in accordance with the Policy on Related Party ^t Transactions. Pursuant to Section 134 (3) (h) read with Rule ³Â Â Â Â 8 (2) of the Companies (Accounts) Rules, 2014, there are

* no transactions to be reported under Section 188 (1) of the ^f Companies Act, 2013. Accordingly, the disclosure of Related

3

provisions. Furthermore, credit losses may increase due to exposure to vulnerable sectors of the economy such as retail, hospitality and commercial real estate. The impact of the pandemic on the long-term prospects of businesses in these sectors is uncertain and may lead to significant credit losses on specific exposures, which may not be fully captured in ECL estimates.

Further, in accordance with the regulatory expectation of the Reserve Bank of India to bring down the Net Non-Performing Asset [NPA] ratio below 4%, which the Management has agreed with, the Company recorded an additional provision of Rs. 1,300 Crores during fourth quarter on Stage 3 loans.

The final impact of this pandemic and the Company's impairment loss allowance estimates are inherently uncertain, and hence, the actual impact may be different than that estimated based on the conditions prevailing as at the date of approval of these financial results. The management will continue to closely monitor the material changes in the macro-economic factors impacting the operations of the Company.

The continuing rapid spread of COVID-19 pandemic, emergence of new variants of the virus and the subsequent restrictions/control measures announced by the respective State Governments are the events which have continued till the date of the announcement of financial results of the Company. These uncertainties may adversely impact the Company's business operations in the future period.

Other than the above mentioned situation affecting the Company, there is no material change and commitment that have occurred after the closure of the Financial Year 2020-21 till the date of this Report, which would affect the financial position of your Company.

RISK MANAGEMENT POLICY

Your Company has a comprehensive Risk Management Policy in place and has laid down a well-defined risk management framework to identify, assess and monitor risks and strengthen controls to mitigate risks. Your Company has established procedures to periodically place before the Risk Management Committee and the Board of Directors, the risk assessment and minimisation procedures being followed by the Company and steps taken by it to mitigate these risks.

The Risk Management Policy, inter alia, includes identification therein of elements of risk, including Cyber Security and related risks as well as those risks which in the opinion of the Board may threaten the existence of the Company. The Risk management process has been established across

 

Party Transactions, as required under Section 134 [3] (h) of the Companies Act, 2013 in Form AOC-2 is not applicable to the Company.

The Policy on Related Party Transactions as approved by the Board of Directors of the Company is uploaded on the website of the Company and same can be accessed on the web-link: https://www.mahindrafinance.com/investor-zone/corporate-governance/.

Further details on the transactions with Related Parties are provided in the accompanying Financial Statements.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

The ongoing COVID-19 pandemic and its effect on the overall economy has impacted consumer sentiments and collections thus affecting the Company's performance, and the future effects of the outbreak remain uncertain. The outbreak has necessitated the Government to respond at unprecedented levels to protect public health, local economies and livelihoods. There remains a risk of subsequent waves of infection, as evidenced by the recently emerged variants of the virus. All these have substantially increased the estimation uncertainty in the preparation of the Financial Statements for the year ended 31^st March, 2021.

Your Company has developed various accounting estimates in these Financial Statements based on forecasts of economic conditions which reflect expectations and assumptions as at 31^st March, 2021 about future events that the management believe are reasonable under these circumstances. There is a considerable degree of judgement involved in preparing forecasts. The underlying assumptions are also subject to uncertainties which are often outside the control of the Company. Accordingly, actual economic conditions are likely to be different from those forecast since anticipated events frequently do not occur as expected, and the effect of those differences may significantly impact accounting estimates included in these Financial Statements.

The significant accounting estimates impacted by these forecasts and associated uncertainties are predominantly related to expected credit losses, fair value measurement, and recoverable amount assessments of non-financial assets.

Across the geographies and segments in which the Company operates, the COVID-19 outbreak has led to a worsening of economic conditions and increased uncertainty, which has been reflected in higher Expected Credit Loss ['ECL]

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. Your Company has a robust organisational structure for managing and reporting on risks.

The development and implementation of Risk Management Policy adopted by the Company is discussed in detail in the Management Discussion and Analysis chapter, which forms part of this Annual Report.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company promotes ethical behaviour in all its business activities and has established a vigil mechanism for its Directors, Employees and Stakeholders associated with the Company to report their genuine concerns. The Vigil Mechanism as envisaged in the Companies Act, 2013 and the Rules prescribed thereunder and the Listing Regulations is implemented through the Whistle Blower 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.

The Board at its Meeting held on 23^rd April, 2021 has pursuant to the recommendations of the Audit Committee, and in keeping with the changing Corporate Governance landscape, adopted a Revised Whistle Blower Policy of the Company.

As per the Whistle Blower Policy implemented by the Company, the Employees, Directors, customers, dealers, vendors, suppliers, or any Stakeholders associated with the Company are free to report illegal or unethical behaviour, actual or suspected fraud or violation of the Company's Codes of Conduct or Corporate Governance Policies or any improper activity to the Ethics Helpline Provider or the Chairperson of the Audit Committee of the Company or the Code of Conduct Committee. The Whistle Blower Policy also provides for reporting of insider trading violations as well as reporting of instances of leak of Unpublished Price Sensitive Information by the employees.

The Whistle Blower Policy provides for protected disclosure and protection to the Whistle Blower. Under the Whistle Blower Policy, the confidentiality of those reporting violation(s) is protected and they are not subject to any discriminatory practices. Protected disclosures can also be made by sending an email at the designated email id:

[e-mail] or any other mechanism as prescribed in the Whistle Blower Policy.

The Chairperson of the Audit Committee can be reached by sending a letter to the below address:

Chairperson of the Audit Committee Mahindra & Mahindra Financial Services Limited Mahindra Towers, 4^th Floor,

Dr. G. M. Bhosale Marg,

P. K. Kurne Chowk, Worli,

Mumbai - 400 018.

The Whistle Blower Policy has been appropriately communicated within the Company and is available on the website of your Company at the web-link: https://mahindrafinance.com/media/384157/vigil-mechanism.pdf.

The Audit Committee is apprised on the vigil mechanism on a periodic basis. During the year, no personnel have been denied access to the Audit Committee.

SUBSIDIARIES, JOINT VENTURE(S) AND ASSOCIATE(S)

The Company's Subsidiaries, Joint Venture(s) and Associate(s) continue to contribute to the overall growth in revenues and overall performance of your Company. A Report on the performance and financial position of each of the subsidiaries, joint venture(s) and the associate companies included in the Consolidated Financial Statements and their contribution to the overall performance of the Company, is provided in Form AOC-1 as ‘Annexure A’ to the Consolidated Financial Statements and forms part of this Annual Report.

Your Company has formulated a Policy for determining 'Material' Subsidiaries as defined in Regulation 16 of the Listing Regulations. This Policy has been hosted on the website of the Company and can be accessed at the web-link: https://mahindrafinance.com/investor-zone/ corporate-governance.

SUBSIDIARIES

Mahindra Insurance Brokers Limited

During the year under review, Mahindra Insurance Brokers Limited ('MIBL), the subsidiary in the business of Direct and Re-insurance Broking, serviced approximately 1.43 million insurance cases, for both Life and Non-Life Retail business. There is de-growth of 14% in Gross Premium facilitated for the Corporate and Retail business lines, decreasing from Rs. 2,431.89 Crores in the Financial Year 2019-20 to Rs. 2,101.06 Crores in the Financial Year 2020-21. The Total Income decreased by 20% from Rs. 336.89 Crores

in the Financial Year 2019-20 to Rs. 268.56 Crores in the Financial Year 2020-21. The Profit before Tax decreased by 40% from Rs. 73.90 Crores to Rs. 43.98 Crores and the Profit after Tax decreased by 40% from Rs. 53.36 Crores to Rs. 32.03 Crores during the same period. MIBL has been able to reach the benefit of insurance to over 3 lakh villages across India.

During the year, MIBL focused on improving manpower productivity and efficiency through automation projects. There is also a sharper focus on diversifying the customer base through additional distribution channel including the Point of Sales Person channel and the direct online sales through paybima.com. Though some of the planned investments in some of the business divisions were delayed, there is no change in the long term strategy of MIBL.

Mahindra Rural Housing Finance Limited

Mahindra Rural Housing Finance Limited ('MRHFL), the Company's subsidiary in the business of providing loans for purchase, renovation, construction of houses to individuals in the rural and semi-urban areas of the country, registered a total income of Rs. 1,454.7 Crores as compared to Rs. 1,527.6 Crores for the previous year, registering a decline of 4.8%. Profit before tax was 5% lower at Rs. 195.3 Crores as compared to Rs. 205.6 Crores for the previous year. Profit after tax was 1.6% higher at Rs. 151.0 Crores as compared to Rs. 148.6 Crores for the previous year.

During the year under review, MRHFL disbursed loans aggregating to Rs. 796.6 Crores as against Rs. 1,876.4 Crores in the previous year.

MRHFL continued its focus on serving customers in rural India. Majority of the loans disbursed were to customers in villages with an average annual household income of less than Rs. 2.00 lakhs. During the year under consideration, MRHFL disbursed home loans to around 34,559 households (in addition to around 10,45,898 existing households as on 31^st March, 2020). MRHFL has been expanding its geographical presence to provide affordable services for rural households.

Mahindra Manulife Investment Management Private Limited and Mahindra Manulife Trustee Private Limited

Equity Infusion by Manulife Investment Management (Singapore) Pte. Limited

As mentioned in the previous Annual Report, Manulife Investment Management (Singapore) Pte. Limited has acquired 49% of the equity share capital of Mahindra

Manulife Investment Management Private Limited [formerly nown as Mahindra Asset Management Company Private Jmited ('MAMCPL)] and Mahindra Manulife Trustee Private Jmited [formerly known as Mahindra Trustee Company Private Limited ('MTCPL')], then wholly-owned subsidiaries, pursuant to the execution of the Share Subscription Agreement and Shareholders' Agreement by and amongst :he Company, MAMCPL, MTCPL and Manulife on 21^st June, 019.

Consequent to the above, the shareholding of the Company n MAMCPL and MTCPL stood reduced from 100% to 51% pf the share capital, respectively.

rhe erstwhile names of MAMCPL and MTCPL have been changed to Mahindra Manulife Investment Management Private Limited and Mahindra Manulife Trustee Private Jmited respectively, with effect from 19^th May, 2020.

Mahindra Manulife Investment Management Private Limited

Mahindra Manulife Investment Management Private Limited 'MMIMPL) acts as an Investment Manager for the schemes pf Mahindra Manulife Mutual Fund. As on 31^st March, 2021, MMIMPL was acting as the Investment Manager for sixteen chemes.

rhe Average Assets under Management in these sixteen schemes were Rs. 5,249 Crores in March 2021 as compared :o Rs. 4,771 Crores in March 2020. Of these assets, Rs. 2,591 Crores were in equity schemes in March 2021 as compared to Rs. 1,616 Crores in March 2020. MMIMPL aas empanelled more than 15,600 distributors and opened 2,13,610 investor accounts in these schemes, recording a Jse of more than 12%.

During the year under consideration, the total income of MMIMPL was Rs. 30.5 Crores as compared to Rs. 17 Crores ^:or the previous year. The operations for the year under consideration have resulted in a loss of Rs. 26.7 Crores as against a loss of Rs. 37.9 Crores during the previous year.

Mahindra Manulife Trustee Private Limited

Mahindra Manulife Trustee Private Limited ('MMTPL) acts as the Trustee to Mahindra Manulife Mutual Fund.

During the year, MMTPL earned trusteeship fees of Rs. 33 _akhs and other income of Rs. 2.7 Lakhs as compared to Rs. 20.9 Lakhs and Rs. 1 Lakh respectively, for the previous /ear. MMTPL recorded a loss of Rs. 0.97 Lakh for the year under review as against a loss of Rs. 1.8 Lakhs in the previous year.

Mahindra Finance CSR Foundation

Mahindra Finance CSR Foundation was incorporated on 2^nd April, 2019 as a wholly-owned subsidiary of the Company registered under Section 8 of the Companies Act, 2013, to promote and support CSR projects and activities. The CSR Foundation is focused on identifying need-based and long-term social impact interventions in cause areas such as health, education, employment & livelihood generation and environment.

In the current Financial Year, the Foundation has launched a flagship CSR program for one of the important stakeholders of your Company i.e. the Driver Community. It is aimed at providing a safety net to drivers and their family members from a holistic perspective and various interventions would be implemented in collaboration with local NGO partners in select States in India.

JOINT VENTURE/ASSOCIATE

Mahindra Finance USA LLC.

The joint venture company's disbursement registered a growth of 11.5% to USD 860.7 Million for the year ended 31^st March, 2021 as compared to USD 772.2 Million for the previous year.

Total Income declined by 10% to USD 61.9 Million for the year ended 31^st March, 2021 as compared to USD 68.8 Million for the previous year. Profit before tax was 77% higher at USD 23.4 Million as compared to USD 13.2 Million for the previous year. Profit after tax grew at a healthy rate of 82% to USD 175 Million as compared to USD 9.6 Million in the previous year.

Ideal Finance Limited (Sri Lanka)

In August, 2019, your Company entered into a Share Subscription, Share Purchase and Shareholders' Agreement with Ideal Finance Limited (Sri Lanka) ['Ideal Finance'] and its existing Shareholders to form and operate a Joint Venture in the financial services sector in Sri Lanka. The joint venture will capitalise on the Company's expertise of over 25 years in the financial services domain and Ideal Finance's domestic market knowledge to build a leading financial services business in Sri Lanka.

Till date your Company has acquired 38.20% stake in Ideal Finance for an amount equivalent to LKR 110 Crores (approximately Rs. 44 Crores). Your Company is committed to enhancing its equity stake in Ideal Finance up to 58.2% aggregating to an amount not exceeding LKR 200.3 Crores.

 

This joint venture will further strengthen your Company's presence in the financial services business. It will help your Company's growth in key emerging markets.

Names of Companies which have become or ceased to be Subsidiaries, Joint Ventures or Associate Companies during the year

During the year under review, no company has become or ceased to be a subsidiary, joint venture or associate of your Company.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company, its subsidiaries, associate(s) and joint ventures for the Financial Year 2020-21, prepared in accordance with the relevant provisions of the Companies Act, 2013 and applicable Indian Accounting Standards along with all relevant documents and the Auditors' Report form part of this Annual Report.

The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies, associate(s) and joint ventures.

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the Financial Statements of the Company, Consolidated Financial Statements along with relevant documents and separate annual accounts in respect of each of the subsidiaries are available on the website of the Company and can be accessed at the web-link: https:// www.mahindrafinance.com/investor-zone/financial-information.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY’S OPERATIONS IN FUTURE

There are no significant and material orders passed by the regulators or courts or tribunals that would impact the going concern status of the Company and its future operations.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Your Company has in place adequate internal financial controls with reference to the Financial Statements

commensurate with the size, scale and complexity of its operations.

Your Company uses various industry standard systems to enable, empower and engender businesses and also to maintain its Books of Account. The transactional controls built into these systems ensure appropriate segregation of duties, the appropriate level of approval mechanisms and maintenance of supporting records. The systems, Standard Operating Procedures and controls are reviewed by Management. These systems and controls are audited by Internal Auditors and their findings and recommendations are reviewed by the Audit Committee and the IT Strategy Committee of the Board of Directors which ensures the implementation.

Your Company's Internal Financial Controls were deployed through Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), that addresses material risks in your Company's operations and financial reporting objectives. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by The Institute of Chartered Accountants of India. The risk control matrices are reviewed on a yearly basis and control measures are tested and documented on a quarterly basis. The Company has during the year enhanced its IT systems making the ICFR process completely digital which has further enabled to strengthen its review and monitoring controls. Based on the results of such assessments carried out by Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.

Your Company recognises that Internal Financial Controls cannot provide absolute assurance of achieving financial, operational and compliance reporting objectives because of

 

its inherent limitations. Also, projections of any evaluation of the Internal Financial Controls to future periods are subject to the risk that the Internal Financial Control may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.

COMPLIANCE WITH THE PROVISIONS OF SECRETARIAL STANDARD - 1 AND SECRETARIAL STANDARD - 2

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

The applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to 'Meetings of the Board of Directors' and 'General Meetings', respectively, have been duly complied with, by your Company.

POLICIES

The details of the Key Policies adopted by the Company are mentioned at “Annexure VII” to the Board's Report.

GENERAL DISCLOSURE

During the year, the Company, in the capacity of a Financial Creditor, has filed two petitions before the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 for recovery of outstanding loans against its customers, being Corporate Debtors.

There was no instance of one-time settlement with any Bank or Financial Institution during the year under review.

PARTICULARS OF REMUNERATION AND RELATED DISCLOSURES

Disclosures with respect to the remuneration of Directors, Key Managerial Personnel and Employees as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are as under:

 

Sr. Disclosure Requirement	Â	Disclosure Details	Â	Â
No.	Name of Director/ KMP	Designation	Ratio of the remuneration of each Director to median remuneration of employees	% increase in Remuneration
1. Ratio of the remuneration of	Dr. Anish Shah*	Non-Executive Chairman (w.e.f. 2nd April, 2021)	N.A.	N.A.
each Director to the median remuneration of the employees of the Company for the Financial	Mr. Dhananjay Mungale** (Former Chairman)	Independent Director	15.96X	13.74
	Mr. C. B. Bhave	Independent Director	13.36X	21.04
	Ms. Rama Bijapurkar	Independent Director	12.39X	17.63
Year 2020-21 & Percentage increase in Remuneration of	Mr. Milind Sarwate	Independent Director	13.71X	25.08
	Mr. Arvind V. SondeA	Independent Director	11.25X	296.73
each Director, Chief	Dr. Rebecca Nugent#	Independent Director	1.02X	N.A.
Financial Officer and Company Secretary during the Financial Year 2020-21	Mr. V. S. Parthasarathy##	Non-Executive Non-Independent Director	N.A.	N.A.
	Mr. Ramesh Iyer	Vice-Chairman & Managing Director	254.06X	8.45
Â	Mr. Amit Raje$	Whole-time Director - Chief Operating Officer Digital Finance -Digital Business Unit	N.A.	N.A.
Â	Mr. V. Ravi$$	Former Executive Director & Chief Financial Officer	129.29X	7.26
Â	Mr. Vivek Karve@	Chief Financial Officer of the Company and Group Financial Services Sector	Â	N.A.
Â	Ms. Arnavaz M. Pardiwalla	Company Secretary & Compliance Officer	-	-13.47

 

* Dr. Anish Shah, Non-Executive Chairman, being in the whole-time employment of Mahindra & Mahindra Limited ('M&M’), the Holding Company, draws remuneration from it and does not receive any remuneration from the Company.

** Resigned as Chairman of the Board of Directors of the Company w.e.f. close of business hours on 1^st April, 2021. Mr. Mungale continues to be an Independent Director of the Company.

^A Resigned as an Independent Director of the Company with effect from 15^th March, 2021.

#    Appointed as an Independent Director of the Company with effect from 5^th March, 2021.

## Resigned as Non-Executive Non-Independent Director of the Company with effect from 18^th September, 2020. Mr. V. S. Parthasarathy being in the whole-time employment of M&M, did not receive any remuneration from the Company during the year.

$ Appointed as Non-Executive Non-Independent Director of the Company with effect from 18^th September, 2020. During F.Y. 202021, Mr. Amit Raje being in the whole-time employment of M&M, did not receive any remuneration from the Company.

Mr. Amit Raje has been appointed as a Whole-time Director of the Company, designated as Chief Operating Officer Digital Finance -Digital Business Unit with effect from 1^st April, 2021.

$$ Ceased to hold office as Executive Director & Chief Financial Officer of the Company with effect from 25^th July, 2020.

@ Appointed as Chief Financial Officer of the Company and Group Financial Services Sector with effect from 14^th September, 2020.

 

2. Percentage increase in the median Remuneration of employees in the Financial Year 2020-21:	There is no increase in the median remuneration of employees. There is a decrease of 16.09% in the median remuneration of employees, taking into consideration employees who were in employment for the whole of the Financial Year 2020-21 and Financial Year 2019-20.
3. Number of Permanent employees on the rolls of the Company as on 31st March, 2021:	19,952

 

4. Average percentile increase already made in the salaries of employees other than the Managerial Personnel in the last Financial Year i.e. 2020-21 and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:	For employees other than Managerial Personnel who were in employment for the whole of the Financial Year 2019-20 and Financial Year 2020-21, there is no increase in the average percentile. There is an average decrease of 15.86% for Financial Year 202021 for employees other than Managerial Personnel whereas the increase in the managerial remuneration for Financial Year 2020-21 is 8.45%.
Â	Justification:
Â	In view of the outbreak of COVID-19 pandemic, no increments were given to the employees and the Managerial Personnel during FY 2020-21.
Â	There is an increase in the remuneration of Managerial Personnel, mainly due to exercise of the ESOPs in FY 2020-21.
Â	The remuneration of the Vice-Chairman & Managing Director is decided based on the individual performance, inflation, prevailing industry trends and benchmarks.
Â	The remuneration of eligible Non-Executive Directors consists of commission and sitting fees. While deciding the remuneration, various factors such as Director's participation in Board and Committee Meetings during the year, other responsibilities undertaken, such as Membership or Chairmanship/ Chairpersonship of Committees, and such other factors as the Nomination and Remuneration Committee may deem fit etc., were taken into consideration.
5. Affirmation that the remuneration is as per the Remuneration Policy of the Company:	The remuneration paid/payable is as per the Policy on Remuneration of Directors and Remuneration Policy for Key Managerial Personnel and Employees of the Company.

Notes:

1]    The remuneration calculated is as per Section 2[78] of the Companies Act, 2013 and includes the perquisite value of Stock Options of the Company exercised during the year.

2]    The calculations are based on Employees who were on the rolls of the Company for the whole of the Financial Year 2019-20 and Financial Year 2020-21.

3]    On the recommendation of the Nomination and Remuneration Committee, the Board at its Meeting held on 28^th January, 2021 has increased the commission and sitting fees payable to the Independent Directors for attending the Board/Committee Meetings. This is commensurate with the increased responsibilities, contribution and time devoted by Independent Directors on various matters pertaining to the Company.

Mr. Ramesh Iyer, Vice-Chairman & Managing Director of the Company does not receive any remuneration or commission from its Holding Company.

Mr. Ramesh Iyer does not receive any commission from any of the subsidiaries of the Company. During the year under review, Mr. Ramesh Iyer has received remuneration from Mahindra Insurance Brokers Limited, the Company's Subsidiary in the form of Employees' Phantom Stock Options amounting to Rs. 88,51,570.

Mr. Ramesh Iyer has not exercised ESOPs of Mahindra Rural Housing Finance Limited, a subsidiary company, during the year, which were granted in the earlier year[s].

 

The Company had 23 employees who were in receipt of remuneration of not less than Rs. 1,02,00,000 during the year ended 31^st March, 2021 or not less than Rs. 8,50,000 per month during any part of the year.

Details of employee remuneration as required under provisions of Section 197 [12] of the Companies Act, 2013 read with Rule 5 [2] and 5 [3] of Companies [Appointment and Remuneration of Managerial Personnel] Rules, 2014 are available on your Company's website and can be accessed at the web-link: https://www.mahindrafinance. com/investor-zone/financial-information.

Any Member interested in obtaining a copy of the same may write to the Company Secretary at the investor Email Id: [e-mail].

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company is an equal opportunity employer and is committed to ensuring that the work environment at all its locations is conducive to fair, safe and harmonious relations between employees. It strongly believes in upholding the dignity of all its employees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictly prohibited.

The Company has in place a detailed Policy in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, ('POSH Act') and Rules made thereunder, to prevent sexual harassment of its employees.

All employees (permanent, contractual, temporary and trainees) are covered under this Policy. The Policy has been widely communicated internally and is placed on the Company's intranet portal. The Company ensures that no employee is disadvantaged by way of gender discrimination.

The POSH Policy is also available on the website of the Company and can be accessed at the web-link: https://www.mahindrafinance.com/investor-zone/ corporate-governance.

The Company has complied with the provisions relating to the constitution of the Internal Complaints Committee (ICC) under the POSH Act to redress complaints received regarding sexual harassment.

To ensure that all the employees are sensitised regarding issues of sexual harassment, the Company conducts an online Induction Training through the learning platform M-Drona covering topics on POSH awareness, reconciliation before filing POSH complaint(s) and consequences of filing false complaint(s).

The following is a summary of Sexual Harassment complaint(s) received and disposed off during the year 202021, pursuant to the POSH Act and Rules framed thereunder:

a)    Number of complaint(s) of Sexual Harassment received during the year: 2

b)    Number of complaint(s) disposed off during the year: 2

c)    Number of cases pending for more than 90 days: Nil

d)    Number of workshops/awareness programme against sexual harassment carried out:

•    Awareness program was conducted in which mailers and video on Prevention of Sexual Harassment at the work place along with the detailed POSH Policy was circulated to sensitise employees to uphold the dignity of their female colleagues at the workplace.

•    Online training program on “Sexual Harassment while Working from Home” and best practices at work for handling sexual harassment cases was organised for Members of the Internal Complaints Committee.

•    A program was conducted online for all women employees, to enhance awareness regarding the Company's POSH Policy.

•    Awareness program was conducted under the “Speak-up” campaign for the employees, in which awareness creating emails and wall papers on laptop/computer screens of all employees, were circulated, covering topics such as applicability of POSH Act to virtual office, raising a complaint under the POSH Act, etc.

e) Nature of action taken by the employer or District

Officer: Warning letter was issued to both the

respondents.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under sub-section (3) (m) of Section 134 of the Companies Act, 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014 are given as under :

(A) Conservation of Energy

(i) The steps taken or impact on conservation of energy:

The operations of your Company are not energy intensive. However, adequate measures have been initiated to reduce energy consumption.

Select few steps are listed:

a) Replacement of conventional lighting with Light Emitting Diode (LED) lighting:

The Company has installed LED lighting in Regional Offices of the Company during the

year under review and the same has been monitored in terms of electrical consumption and expenses. The Company extensively monitors its energy consumption and GHG emissions. Conservation of energy covers use of LED lights in new branches and retrofication to LED lights in Regional Offices.

b)    Replacement of old air-conditioning with updated version of machines with R-410A gas, which helps in reducing Ozone depletion. Your Company has taken the initiative to use environment friendly gas in Air Conditioners during the year.

c)    Reduction in water and energy consumption and recycling of waste paper generation at various locations.

During the year, the Company has sent 2,131 kgs. of waste generated at the Head Office for responsible disposal and recycling. In return it has received 11,195 Swachh Bharat Points which can be redeemed for environmentally friendly office stationary items from the vendor partner. Similarly, waste generation and recycling has been done at the Record Management Company for 2,896 boxes weighing total 16,500 kgs.

[ii]    The steps taken by the Company for utilising alternate sources of energy: Nil.

[iii]    The capital investment on energy conservation equipment: Nil.

(B) Technology Absorption

[i]    The efforts made towards technology absorption: Not Applicable.

(ii)    The benefits derived like product improvement, cost reduction, product development or import substitution: Not Applicable.

(iii)    In case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year): Not Applicable.

(a)    Details of Technology Imported;

(b)    Year of Import;

(c)    Whether the Technology has been fully absorbed;

(d)    if not fully absorbed, areas where absorption has not taken place, and the reasons thereof.

(iv)    Your Company has not incurred any expenditure on Research and Development during the year under review.

(C) Foreign Exchange Earnings and Outgo

Foreign Exchange earnings and outgo during the year under review are as follows:

Rs. in Crores

Total Foreign Exchange; Eam^ed and _For the Financial For the Financial ^Outgo    Year ended 31st Year ended 31st

March, 2021    March, 2020

Foreign Exchange Earnings    NIL    NIL

Foreign Exchange Outgo    16.14    20.14

For and    on behalf of the Board

Dr.    Anish Shah

Chairman

Place : Mumbai Date : 23^rd April, 2021

---

Mar 31, 2021

The Directors are pleased to present their Thirty-First Report together with the Audited Financial Statements of your Company for the Financial Year ended 31^st March, 2021.

The performance highlights and summarised financial results of the Company are given below:

PERFORMANCE HIGHLIGHTS

Consolidated income for the year increased by 1.5% to Rs. 12,170.5 Crores as compared to Rs. 11,996.5 Crores in 2019-20;

Consolidated income from operations for the year was Rs. 12,050.3 Crores as compared to Rs. 11,883.0 Crores in 2019-20, a growth of 1.4%;

Consolidated profit before tax for the year was Rs. 934.1 Crores as compared to Rs. 1,602.0 Crores in 2019-20;

Consolidated profit after tax and non-controlling interest for the year was Rs. 773.2 Crores as compared to Rs. 1,075.1 Crores in 2019-20.

FINANCIAL RESULTS

Â	CONSOLIDATED March 2021 March 2020		Rs. in Crores STANDALONE March 2021 March 2020
Total Income	12,170.5	11,996.5	10,516.8	10,245.1
Less: Finance Costs	5,307.6	5,390.6	4,733.2	4,828.8
Expenditure	6,046.4	4,902.9	5,241.4	3,954.3
Depreciation, Amortization and Impairment	150.5	146.9	125.9	118.3
Total Expenses	11,504.4	10,440.3	10,100.5	8,901.4
Profit before exceptional items and taxes	666.1	1,556.1	416.3	1,343.8
Share of Profit of Associates & Joint Ventures	39.5	45.9	-	-
Exceptional items	228.5	-	6.1	-
Profit Before Tax	934.1	1,602.0	422.4	1,343.8
Less: Provision for Tax
Current Tax	512.3	647.3	450.3	556.9
Deferred Tax	(340.9)	(129.9)	(347.5)	(119.6)
(Excess) / Short provision for Income Tax - earlier years	(17.6)	(1.2)	(15.5)	-
Profit After Tax for the Year	780.3	1,085.8	335.2	906.4
Less: Profit for the year attributable to Non-Controlling	7.1	10.7	Â	Â
interests	Â	Â	Â	Â
Profit for the year attributable to Owners of the Company	773.2	1,075.2	335.2	906.4
Balance of profit brought forward from earlier years	4,578.0	3,957.3	4,293.6	3,834.0
Add: Other Comprehensive Income/(Loss)	(18)	(14.7)	(2.4)	(11.3)
Add: Transfer from Debenture Redemption Reserve	-	223.7	-	223.7
Balance available for appropriation	5,349.4	5,241.4	4,626.4	4,952.8
Less: Appropriations
Dividend paid on Equity Shares (including tax thereon)	-	484.2	-	477.9
Transfer to Statutory Reserves	98.8	222.8	68.0	181.3
Add/Less: Other Adjustments:
Gross obligation at fair value to acquire non-controlling	35.4	43.6	Â	Â
interest	Â	Â	Â	Â
Changes in Group's Interest	(10)	-	-	-
Balance profit carried forward to balance sheet	5,285.0	4,578.0	4,558.4	4,293.6

TRANSFER TO RESERVES

The Company proposes to transfer an amount of Rs. 68.0 Crores to the Statutory Reserve. Further, the Board of your Company decided not to transfer any amount to the General Reserve for the year under review. An amount of Rs. 4,558.4 Crores is proposed to be retained in the Statement of Profit and Loss.

DIVIDEND

Your Directors are pleased to recommend a dividend of Re. 0.80 per Equity Share of the face value of Rs. 2 each, payable to those Members whose names appear in the Register of Members as on the Book Closure date. Dividend is subject to approval of Members at the ensuing Annual General Meeting and shall be subject to deduction of tax at source.

The Equity dividend outgo for the Financial Year 2020-21 would absorb a sum of Rs. 98.8 Crores.

The dividend pay-out is in accordance with the Company's Dividend Distribution Policy.

DIVIDEND DISTRIBUTION POLICY

The Dividend Distribution Policy, containing the requirements prescribed in Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is appended as “Annexure I” and forms part of this Annual Report.

The Dividend Distribution Policy can also be accessed on the Company's website at the web-link: https:// mahindrafinance.com/discover-mahindra-finance/ policies.

During the year, an amount of Rs. 7,13,234 being the unclaimed/unpaid dividend of the Company for the Financial Year ended 31^st March, 2013 was transferred in September, 2020 to the Investor Education and Protection Fund Authority.

OPERATIONS

The year under review has been one of the most challenging years both for your Company and its customers. The COVID-19 pandemic outbreak which began in the middle of March 2020 continued to impact the economy throughout the financial year 2020-21. The year was full of uncertainties with slowdown in activities on the ground. The world was introduced to the new normal of lockdowns, containment zones, work from home with restricted movements of people and goods. The nationwide transport system came to a grinding halt as Air, Train and Road travel got severely impacted. This was a never seen before situation which

brought the economic activities in the country to a virtual standstill. The impact of the pandemic led to closure of almost all the Company's offices, business and recovery touch points and completely stalled the field operations from the last week of March 2020. Operations gradually resumed in mid-May in offices pan-India. Your Company has been strictly adhering to lockdown announcements in accordance with the directives issued by the Central, State Government and Local Administration.

Your Company is primarily in the financing of Automobiles and Tractors and addresses customers who use these vehicles for earning their livelihood. Your Company remains a significant financier to its customers in semi-urban and rural geographies by providing a wide range of easy and affordable products and services designed to suit their cashflow cycles. Your Company expanded vide its channel connect with leading car dealers. Your Company has retained its leadership position in financing the Mahindra range of vehicles and tractors in addition to extending its lending to vehicles of other leading Auto Original Equipment Manufacturers (OEMs). Your Company has aggressively pursued financing of pre-owned vehicles and used tractors. The demand for both new and used automobiles for the second consecutive year saw a substantial dip due to subdued load factors, and supply side constraints leading to poor sentiments and thus a much lower demand. The overall business volumes continued to be low for the Company on the backdrop of certain segments like Taxi, school bus/ van, traders, tourist operators, contracting segments, sand & stone mining applications, etc., opting to refrain from purchasing new vehicles. This further led to overall lower disbursements by your Company. Simultaneously, the earnings of the customers covered in the above mentioned segments were severely impacted due to slowdown of the economy. Hence, the collections were also subdued during most parts of the year. The Regulator did provide timely moratorium which gave support to our customers by allowing them to defer the EMI's by a period of 6 months. A significant majority of our customers availed the benefit under this moratorium scheme. Your Company continued to partner with the customers during these difficult times and offered moratorium to all eligible customers. The agricultural sector was relatively less impacted as monsoons, water levels, yields, support prices were above average and hence resulted in decent farm based cashflows. The second half of the year witnessed some amount of normalcy returning to the market with unlocking of the country. This led to better collection efficiencies starting December 2020. The Government supported Emergency Credit Line Guarantee Scheme (ECLGS) was offered to all eligible customers in the second half of the fiscal to mitigate the difficulties of vehicle users in commercial applications. A few of your Company's

customers took benefit of this scheme to lubricate their working capital.

The Business model got stress-tested for an elongated period of extreme uncertainty on an all-India basis. The flexibility and the elasticity of the model is demonstrated by the return of near normal disbursements and high collection efficiencies in the fourth quarter, as the pandemic started easing out.

Building Blocks for Growth, Efficiency, Customer Experience

A.    Deeper Physical Reach

Your Company has an extensive pan-India distribution network with 1,388 offices spanning across 27 States and 7 Union Territories as of 31^st March, 2021. During the year under review, your Company enhanced its footprint into deeper rural pockets by adding another 156 new branches in its network towards the year-end. Your Company's widespread office network reduces its reliance on any one region in the country. The geographic diversification also mitigates some of the regional, climatic, and cyclical risks, such as heavy monsoons or droughts. In addition, the Company's extensive office network benefits from a decentralized approval system, which allows each office to grow its business organically as well as leverage its customer relationships by offering multiple financial products including distribution of insurance products and mutual funds. Your Company services multiple products through each of its offices, which reduces operating costs and improves total sales. Your Company believes that the challenges inherent in developing an effective office network in rural and semiurban areas have also created opportunities of catering to the diverse financial requirements of its customers by identifying and understanding the needs and aspirations of the people.

B.    Enhancing Digital Reach

Your Company has an enhanced on-line and in-mobile presence to provide a superior digital experience to its customers. Employees, customers and partners are being enabled digitally for all their needs and substantial progress has been made in this direction. Today, the entire lending process is digitally enabled, which has facilitated the EMI collections being received through Digital and on-line means. This year also saw that the challenge posed by the pandemic for collections was to an extent mitigated when customers extensively used our online and App based Digital Channels for making their monthly repayments. In the last quarter of the

fiscal, the total amount collected from the customers by digital means had gone up by 94% compared to the last quarter of the previous year. Your Company and its subsidiaries have embraced digital in performing different activities like customer acquisition, digitally enabled collections, offering Fixed Deposits, Mutual Funds and Insurance products.

C.    Leveraging Technology

Information Technology has enabled the automation and digitisation of processes across the organisation, empowering employees with the workflows and knowledge for efficiency and controls, and engendering newer business products, analytical models, and decision-making tools. The Company's digital channels of multi-lingual website, mobile app, and contact centre too are increasingly popular with the customers. Your Company has successfully leveraged enterprise technology platforms such as enterprise service bus, customer relationship management, mobile application management, data lake and business intelligence. It is at an advanced stage in upgrading its Loan Origination System and Loan Management System capabilities to meet the future growth requirements and to be able to seamlessly service its large customer base and partners in the rural and semi-urban geographies.

D.    Data as Competitive Advantage

Your Company's presence in the rural and semi-urban markets for more than 25 years, working with several profiles gives your Company a huge advantage, in applying Analytics and Artificial Intelligence (AI) on the data leading to customized personalized offerings that are designed and delivered with speed and lower risks. Your Company has launched its proprietary algorithms to offer faster loan approvals at dynamic interest rates to low risk customers which would help in gaining market share, improving portfolio quality and profitability. Customer acquisition, retention, cross selling, and collections will be substantially enhanced with the combined Integrated activation of Digital, Analytics and Technology.

E.    Growth Drivers for Future

Your Company is having several plans to expand its offerings to its customers for growth. Pre-owned Vehicles, used tractors and commercial vehicles have a large opportunity for growing within the vehicle segments while growing the market share for the Company's existing range of products.

Meeting the Non-vehicle Financial needs of customers in the rural and semi-urban regions is another area of opportunity. Products like Personal Loans, Consumer Loans, Farm Related Working Capital Loans, etc., will have a growth focus targeting our large existing customer bases as well as new customers. For this purpose, the Company has formed a strategic business unit (SBU) for its Fintech vertical which will focus on digital lending.

Leasing as a method of Specialized Financing of certain customer segments for both vehicle and beyond is also being set up. Leasing offers an emerging opportunity and will aid in expanding the Financing portfolio in the medium and long term.

SME Lending

The SME lending faced significant head winds during the year due to weak economic environment and slowdown in the auto segment. The COVID-19 pandemic resulted in disruptions across businesses and SMEs also underwent significant stress. As a matter of abundant caution, your Company curtailed disbursements in significantly stressed sectors and supported deserving clients with good track record. Consequently, the Assets Under Management as of March 2021 has de-grown by 34% in comparison to March 2020. Further, your Company focused on strengthening its systems to reduce risk and enhance customer centricity. Your Company also strengthened its product offerings and broadened its tie-ups with more OEMs. It is expected that with these measures your Company would be able to grow its book significantly once the economic activity picks up.

The total value of assets financed stood at Rs. 25,248.9 Crores as compared to Rs. 42,388.2 Crores in the previous year. Total Income grew by 2.7% at Rs. 10,516.8 Crores for the year ended 31^st March, 2021 as compared to Rs. 10,245.1 Crores for the previous year. Profit Before Tax (PBT) declined by 68.6% at Rs. 422.4 Crores as compared to Rs. 1,343.8 Crores for the previous year. Profit After Tax (PAT) declined by 63.0% at Rs. 335.2 Crores as compared to Rs. 906.4 Crores in the previous year. During the year under review, the Assets Under Management stood at Rs. 81,689 Crores as at 31^st March, 2021 as against Rs. 77,160 Crores as at 31^st March, 2020, a growth of 5.9%.

Despite the most difficult times the Gross Stage 3 loan assets stood at an absolute level of Rs. 5,786 Crores, almost the same as that on 31^st March, 2020 (Rs. 5,747 Crores). This was a resilient performance given the backdrop of tough macro conditions and severe logistical issues. However, as the disbursements slowed down in the aftermath of COVID-19 outbreak, the Gross Non-Performing Assets were at 9.0% of closing loan assets as on 31^st March,

2021, a tad higher against 8.4% as on 31^st March, 2020. The Company continued to reassess its credit exposures and made additional ECL overlay even during the year, which stood at Rs. 996 Crores as on 31^st March, 2021 as against Rs. 574 Crores as on 31^st March, 2020. Further, in accordance with the regulatory expectation of the Reserve Bank of India to bring down the Net Non-Performing Asset (NPA) ratio below 4%, the Company recorded an additional provision of Rs. 1,320 Crores during the fourth quarter on Stage 3 loans. Resultantly, the Net NPA ratio of the Company stood at 3.97% as at 31^st March, 2021 as against 5.98% as on 31^st March, 2020. The Stage 3 provisioning coverage ratio stood at 579% as compared to 31% in the previous year.

There has been no change in the nature of business of the Company during the year under review.

FINANCIAL PRODUCTS DISTRIBUTION

During the year under review, your Company has initiated activities to increase the sale of Third Party Products to its customers and increased the fee income of the Company. As a green initiative measure and for the convenience of its investors, your Company has recently launched an Investment portal to enable them to transact in Mutual Funds as well as Fixed Deposits of the Company. The portal is available on the website of the Company under the Investment tab. With the launch of this Investment Solutions portal, your Company aims to increase the sales of third party investment products via the digital route along with other channels such as its branch network and a dedicated team to sell these products to its clients.

The Company's Assets under Management for distribution of Mutual Fund Products (MFP) as on 31^st March, 2021 stood at Rs. 2,900 Crores, which grew 109% as compared to the AUM as on 31^st March, 2020. Further, sales of other Third Party Products such as mutual funds, insurance, bonds & debentures, etc., grew from Rs. 309 Crores in FY 2019-20 to Rs. 482 Crores in FY 2020-21, recording a growth of 56% over the corresponding period in the previous year. Your Company has also implemented a customer service process as well as a process for evaluation and recommendation of Mutual Fund schemes. All these initiatives will lead to an increase in fee based income in the coming years.

MORATORIUM OF LOANS

As mentioned in the previous Annual Report and in accordance with the Board approved Moratorium Policy read with the Reserve Bank of India ('RBI') guidelines dated 27^th March, 2020, 17^th April, 2020 and 23^rd May, 2020 relating to 'COVID-19 - Regulatory Package', your Company has granted moratorium up to six months on the payment of installments which became due between 1^st March,

2020 and 31^st August, 2020 to all eligible borrowers. This relaxation did not automatically trigger a significant increase in credit risk. During the year under review, 81% of the customers have availed of the moratorium facility offered by the Company.

The Government of India, Ministry of Finance, vide its notification dated 23^rd October, 2020, had announced COVID-19 Relief Scheme ('the Scheme') for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts as per the eligibility criteria and other aspects specified therein and irrespective of whether the RBI moratorium was availed or not. Accordingly, your Company has credited an ex-gratia amount of Rs. 110.27 Crores in the accounts of the eligible borrowers. The Company filed a claim with the State Bank of India for reimbursement of the said ex-gratia amount as specified in the notification and has received an amount of Rs. 109.28 Crores towards the same on 31^st March, 2021.

Further, in connection with the judgment of the Hon'ble Supreme Court of India in the matter of Small Scale Industrial Manufacturers Association vs LIOI & Ors. and other connected matters dated 23^rd March, 2021 and as advised by RBI vide its Circular No. RBI/2021-22/17 DOR. STR.REC.4/21.04.048/2021-22 dated 7^th April, 2021, and the Indian Banks' Association ('IBA') advisory letter dated 19^th April, 2021, your Company has put in place a Board approved Policy to refund/ adjust the 'interest on interest' charged to the borrowers, not covered under the Ex-gratia Scheme, for the moratorium period i.e. 1^st March, 2020 to 31^st August, 2020. The Company has made an estimated provision of Rs. 31.75 Crores as on 31^st March, 2021 towards this.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with the applicable provisions of the Master Direction issued by the Reserve Bank of India and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a detailed analysis of the Company's performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

CORPORATE GOVERNANCE

Your Company practices a culture that is built on core values and ethical governance practices. Your Company is committed to transparency in all its dealings and places high emphasis on business ethics.

In accordance with the applicable provisions of the Master Direction issued by the Reserve Bank of India and the

Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance along with a Certificate from Messrs. KSR & Co., Company Secretaries LLP regarding compliance with the conditions of Corporate Governance as stipulated in Regulations 17 to 27, clauses (b) to (i) of sub-regulation (2) of Regulation 46 and paragraphs C, D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of the Annual Report.

SHARE CAPITAL

The Members at their Extraordinary General Meeting held on 30^th June, 2020, have approved the increase in the Authorised Share Capital of the Company from Rs. 190,00,00,000 (Rupees One Hundred Ninety Crores) divided into 70,00,00,000 (Seventy Crores) Equity Shares of Rs. 2 (Rupees Two) each of the Company and 50,00,000 (Fifty Lakhs) Redeemable Preference Shares of Rs. 100 (Rupees Hundred) each of the Company to Rs. 550,00,00,000 (Rupees Five Hundred Fifty Crores) divided into 250,00,00,000 (Two Hundred Fifty Crores) Equity Shares of Rs. 2 (Rupees Two) each of the Company and 50,00,000 (Fifty Lakhs) Redeemable Preference Shares of Rs. 100 (Rupees Hundred) each of the Company by creation of additional 180,00,00,000 (One Hundred Eighty Crores) Equity Shares of Rs. 2 (Rupees Two) each.

Rights Issue of Equity Shares

During the year under review, your Company has allotted

61.77.64.960    Equity Shares of the face value of Rs. 2 each for cash at a price of Rs. 50 per Equity Share (including premium of Rs. 48 per Share) in the ratio of 1 (one) Rights Equity Share for every 1 (one) fully paid-up Equity Share of the Company, held by the eligible Equity Shareholders on the Record Date i.e. 23^rd July, 2020. The Issue opened on 28^th July, 2020, and closed on 11^th August, 2020. The Rights offering by your Company received a very satisfactory response, as seen by the high levels of subscription and strong participation from Shareholders and investors, and was over-subscribed approximately by 1.3 times of the Issue Size. The Company received the approval from Stock Exchanges for listing on 19^th August, 2020 and trading of Rights Equity Shares on 20^th August, 2020.

The proceeds from the Rights Issue have been fully utilised for the objects of the Rights Issue as mentioned in the Letter of Offer filed with the Securities and Exchange Board of India.

Consequently, pursuant to the allotment of Rights Shares on 17^th August, 2020, the issued, subscribed and paid-up Equity Share Capital of the Company stands increased from

61.77.64.960    Equity Shares to 123,55,29,920 Equity Shares of the face value of Rs.2 each, fully paid-up.

 

2020, an improvement of 1.1 percent over the previous prediction in October 2020. The silver lining remains the development and growing coverage of the vaccines which is lifting the sentiment.

The progress of the virus has been slowed with the help of social distancing, increase in availability of vaccines and treatment protocols. However, the health infrastructure of many countries is reeling under the pressure of second and third wave. New restrictions are introduced in countries facing such challenges indicating the recovery to be uneven and still in some distance.

Outlook

The global growth projected is at 6.0 percent in 2021, which thereafter moderates to 4.4 percent in 2022. A lot of this shall depend upon the path of health crisis and the coordinated policy actions taken to limit economic damage. The growth for advanced economies is projected at 5.1 percent in 2021 [vis-a-vis de-growth of -4.7% in 2020] compared to a growth of 6.7 percent in 2021 for emerging and developing economies [vis-a-vis de-growth of -2.2% in 2020].

With varied outlook for different countries, the macro policy objectives still remain as the need to overcome the existing health crisis and returning employment to normal levels. The expectation based on availability of vaccines suggest local transmission to reduce everywhere by end of 2022.

Domestic Economy

The scenario in the Indian economy is much like many other countries where a gradual improvement in macro indicators has been seen. The positives include the resilience demonstrated in rural demand which remained buoyant and had record agriculture production in FY 2020-21. Urban demand has gained strength on the backdrop of normalization of business activity.

The anticipated improvement in economic activity is however held back with new mutations resulting in renewed jump in COVID-19 cases. Associated local lockdowns, which are now prevalent in many States, shall dampen demand for contact intensive services, restrain growth and prolong the return to normalcy. The silver lining remains the expectation of normal monsoon in the current year.

RBI projects the real GDP growth for FY 2021-22 to be at 10.5 percent. These growth expectations may undergo a change as the decisions on lockdowns have increased across States with the number of cases in the second wave now surpassing the numbers during those seen in the previous peak.

[Source: IMF, RBI]

 

The issued, subscribed and paid-up Equity Share Capital as on 31^st March, 2021 was Rs. 247.11 Crores, comprising 123,55,29,920 Equity Shares of the face value of Rs. 2 each, fully paid-up.

During the year, the Company has not issued any sweat equity shares or equity shares with differential voting rights.

As on 31^st March, 2021, none of the Directors of the Company holds instruments convertible into Equity Shares of the Company.

STOCK OPTIONS

During the year under review, no Options were granted to Eligible Employees under the Mahindra & Mahindra Financial Services Limited Employees' Stock Option Scheme-2010 [“2010 Scheme”]. The Company does not have any scheme to fund its employees to purchase the shares of the Company. No employee has been issued stock options during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant.

The 2010 Scheme of the Company is in compliance with the Securities and Exchange Board of India [Share Based Employee Benefits] Regulations, 2014 [“SBEB Regulations”] and there were no material changes made to the said Scheme. A Certificate from Messrs. B S R & Co. LLP, Chartered Accountants, Statutory Auditors of the Company, pursuant to Regulation 13 of the SBEB Regulations would be available for inspection by the Members through electronic mode.

Voting rights on the Shares issued to employees under the aforesaid Scheme are either exercised by them directly or through their appointed proxy.

The details of the Employees' Stock Options and the Company's Employees' Stock Option Trust as required under the SBEB Regulations read with SEBI Circular CIR/CFD/ POLICY CELL/2/2015 dated 16^th June, 2015 have been uploaded on the Company's website and can be accessed at the web-link: https://mahindrafinance.com/investor-zone/financial-information.

ECONOMY

Global and Domestic Growth

With completion of one year of the pandemic, the work lying before administrations to provide health care and vaccines continues to remain daunting. The human toll and loss of economic activity caused by the pandemic is unprecedented which could have been much worse, but for the timely intervention and policy support provided across administrations. The global economic activity is estimated to have contracted by -3.3 percent in Calendar Year [CY]

Finance

During the first eight months of the year under review (Apr-Nov 2020), Retail price inflation continued to be higher than the RBI's upper margin of 6%. It fell sharply in November 2020 with food inflation coming down and has since moved up again but within the RBI's upper margin. Having reduced policy repo rate in the first quarter of FY 2021 from 4.40% to 4.00%, the RBI since then, has maintained status quo in the key policy rates, along with continuing an accommodative stance until necessary to sustain growth on a durable basis.

The Government of India and the Reserve Bank of India have taken a series of actions during the year which has assisted the financial sector including the NBFC industry to wither the pandemic storm. These included, amongst others, reducing the benchmark rates, announcing moratorium for six months, restructuring scheme for a set of eligible borrowers and long-term repo operations to make easier access to liquidity. These actions led to stabilization of the financial sector with significant liquidity buffers being maintained across companies.

At the start of the fiscal year [April 2020), 10-year G-Sec benchmark yields (6.45% GS 2029), was trading at 6.14% levels. The new benchmark (5.85% GS 2030) closed the year at 6.18%. The yields during the year remained range bound as policy actions aimed at ensuring steady supply of funds. During the year, the INR appreciated by 2.5 percent from INR 75.39 to INR 73.50 per USD after a sharp depreciation of 9.0 percent during the previous year.

Your Company has been identified as a “Large Corporate” under the framework provided by the Securities and Exchange Board of India and accordingly, has ensured that more than 25% of its incremental borrowings during the year was by way of issuance of Debt securities.

During the year under review, your Company continued with its diverse methods of sourcing funds in addition to regular borrowings like Secured and Unsecured Debentures, Term Loans, Fixed Deposits, Commercial Papers, etc., and maintained prudential Asset Liability match throughout the year. Your Company sourced long-term debentures and loans from banks and other institutions at attractive rates. Your Company continues to expand its borrowing profile by tapping into new lenders and geographies.

During the year, your Company has successfully completed 3 securitisation transactions aggregating to Rs.5,120.30 Crores and raised JPY 15 billion (Rs. 1,063.50 Crores) through External Commercial Borrowings.

Private Placement Issues of Non-Convertible Debentures

During the year under review, your Company issued Secured/Unsecured Redeemable Non-Convertible Debentures including Secured Redeemable Principal Protected Non-Convertible Market Linked Debentures (“NCDs”) and raised an amount aggregating to Rs. 4,815.90 Crores on a private placement basis, in various tranches. The NCDs are listed on the debt market segment of the BSE Limited.

Details of all the above-mentioned issues were provided to the Board on a periodic basis.

As specified in the respective offer documents, the funds raised from NCDs were utilised for various financing activities, onward lending, to repay existing indebtedness, working capital and general corporate purposes of the Company. Details of the end-use of funds were furnished to the Audit Committee on a quarterly basis.

The Company is in compliance with the applicable guidelines issued by the Reserve Bank of India, as amended from time to time.

The Company has been regular in making payments of principal and interest on all the NCDs issued by the Company on a private placement basis and through public issue. There are no NCDs which have not been claimed by investors or not paid by the Company after the date on which the NCDs became due for redemption.

Commercial Paper

As at 31^st March, 2021, the Company had Commercial Paper (CPs) with an outstanding amount (face value) of Rs. 500 Crores. CPs constituted 0.8% of the outstanding borrowings as at 31^st March, 2021. The CPs of the Company are listed on the debt market segment of the National Stock Exchange of India Limited.

Rupee Denominated Medium Term Note

Under the Company's Medium Term Note Programme, the Company has not raised any funds through Rupee denominated bonds during the year.

INVESTOR RELATIONS

Your Company has done multiple interactions with Domestic and International investors/analysts during the current year. Given the ongoing pandemic, all such meetings were

done through use of technology i.e. conference calls, videoconferencing. Your Company attended multiple investor meets organised by reputed Global and Domestic Broking Houses during the year, to communicate details of its performance, important regulatory and market developments and exchange of information. Roadshows were held during the year with Domestic and International investors on the backdrop of the Rights Issue undertaken to strengthen the Capital Adequacy. Quarterly and annual earnings calls were scheduled through structured conference calls to keep various stakeholders informed about the past performance and future outlook of the industry, especially those having a bearing on the Company. These interactions with institutional shareholders, fund managers and analysts are based on generally available information that is accessible to the public on a non-discriminatory basis. Your Company uploads the transcript of the quarterly earnings calls on its website which can be accessed by existing and potential investors and lenders. Your Company shall continue to make effective

Your Company believes in transparent communication and building a relationship of mutual understanding and trust. Your Company further ensures that critical information about the Company is available to all the investors by hosting such information on the Company's website.

CAPITAL ADEQUACY

As on 31^st March, 2021, the Capital to Risk Assets Ratio (CRAR) of your Company was 26.0% which is well above the minimum requirement of 15% CRAR prescribed by the Reserve Bank of India.

Out of the above, Tier I capital adequacy ratio stood at 22.2% and Tier II capital adequacy ratio stood at 3.8% respectively.

RBI GUIDELINES

The Company continues to comply with all the applicable regulations prescribed by the Reserve Bank of India (“RBI”), from time to time.

CREDIT RATING

Your Company believes that its credit rating and strong brand equity enables it to borrow funds at competitive rates. The credit rating details of the Company as on 31^st March, 2021 were as follows:

Rating Agency	Type of Instrument	Credit Rating*	Remarks
India Ratings & Research Private Limited	Commercial Paper Programme and Bank Facilities (Fund/Non-Fund Based Working Capital Limit)	IND A1 +	The 'A1'+ rating indicates the Highest Level of Rating. Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
Â	Long-term (incl. MLD) Debt instruments, Subordinated Debt Programme and Bank Facilities (Fund/Non-Fund Based Working Capital Limit)	IND AAA/Stable IND PP-MLD AAA emr/Stable	The 'AAA' ratings denote the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. 'PP-MLD' refers to Principal Protected Market Linked Debentures.
Â	Â	Â	Suffix "emr” denotes the exclusion of the embedded market risk from the rating.
CARE Ratings Limited	Long-term Debt Instruments and Subordinated Debt Programme	CARE AAA/Stable	The 'AAA' ratings denote the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk.
Brickwork Ratings India Private Limited	Long-term Subordinated Debt Programme	BWR AAA/Stable
CRISIL Ratings Limited	Fixed Deposit Programme	CRISIL FAAA/ Stable	Â
Â	Commercial Paper Programme and Bank Loan Facilities	CRISIL A1 +	The 'A1'+ rating indicates the Highest Level of Rating. Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
Â	Long-term Debt Instruments, Subordinated Debt Programme and Bank Loan Facilities	CRISIL AA+/ Stable	The 'AA+' rating indicates a high degree of safety with regard to timely payment of financial obligations. Such instruments carry very low credit risk.

ACHIEVEMENTS

Awards/Recognition received by your Company during the year are enumerated hereunder:

Marketing:

Won the Silver Award in the category of 'New on ground property of the year' at the Rural Marketing Association of India [Flame Awards] for the Gram Pravesh initiatives of the Company.

CSR & Sustainability:

Included in the renowned FTSE4Good Index Series for the second year.

Ranked 48^th amongst Top 100 Indian companies for Sustainability & CSR under Responsible Business Rankings 2020 by Futurescape.

Attained performance band: B in the Carbon Disclosure Project Assessment 2019-20.

Included in 'DJSI Sustainability Yearbook 2021'

Human Resources:

Recognized among “India's Best Workplaces in Career Management 2020” by Great Place to Work® Institute.

FIXED DEPOSITS AND LOANS/ ADVANCES

Your Company offers a wide range of Fixed Deposit schemes that cater to the investment needs of various classes of investors. These Deposits carry attractive interest rates with superior service enabled by robust processes and technology. In order to tap rural and semi-urban savings, your Company continues to expand its network and make its presence felt in the most remote areas of the country.

During the year, CRISIL has reaffirmed a rating of 'CRISIL FAAA/Stable' for your Company's Fixed Deposits. This rating represents the highest degree of safety regarding timely servicing of financial obligations and carries the lowest credit risk. Your Company's Deposits continue to be a preferred investment amongst the investors.

As on 31^st March, 2021, your Company has mobilised funds from Fixed Deposits to the tune of Rs. 9,481.16 Crores, with an investor base of over 1,96,278 investors.

Your Company continues to serve the investors by introducing several customer centric measures on an ongoing basis to further strengthen its processes in sync with the requirements of the Fixed Deposit holders. The

Company periodically communicates various intimations via SMS, e-mails, post, courier, etc., to its investors as well as sends reminder emails to Depositors whose TDS is likely to be deducted before any pay-out/accrual. Your Company also provides a digital platform for online application/renewal of deposits, online generation of TDS certificates from customer/broker portal and seamless investment process for employees.

During the year under review, your Company has rolled out several initiatives aimed at offering a superior customer experience. Some key ones are:

An integrated web portal has been developed to facilitate online application/online renewal of Fixed Deposits, Loan against FDs, profile updates, etc.

Online submission of Forms 15 G/15H by all eligible Depositors through the FD Customer portal is made available on the Company's website.

TDS certificate^] are made available in the Customer portal and Broker portal, in addition to the same being sent to the concerned Depositors, from time to time.

In order to offer various payment options to Depositors, more payment gateways have been added across various FD investment portals.

An advanced version of Customer Relationship Management [CRM] has been launched to record the queries, requests and complaints for future data analysis in order to enhance customer service.

An integrated service portal [E-Sarathi] has been introduced to address the queries of Depositors routed through the Channel Partners on real-time basis during working hours.

The process of recording Central Know Your Customer [CKYC] details of the Depositors has been strengthened by introducing various control measures.

As at 31^st March, 2021, 6,052 Deposits amounting to Rs. 5.41 Crores had matured for payment and remained unclaimed. The unclaimed Deposits have since reduced to 5,882 Deposits amounting to Rs. 5.17 Crores. There has been no default in repayment of Deposits or payment of interest during the year.

Your Company being a Non-Banking Financial Company, the disclosures required as per Rule 8 [5] [v] and [vi] of the Companies [Accounts] Rules, 2014 read with Sections 73 and 74 of the Companies Act, 2013, are not applicable to it.

The information pursuant to Clause 35[1] of Master Direction DNBR.PD.002/ 03.10.119/2016-17 dated 25^th

August, 2016 issued by the Reserve Bank of India on Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016, regarding unpaid/unclaimed public deposits as on 31^st March, 2021, is furnished below:

i.    total number of accounts of Public Deposits of the Company which have not been claimed by the depositors or not paid by the Company after the date on which the deposit became due for repayment: 6,052.

ii.    total amounts due under such accounts remaining unclaimed or unpaid beyond the dates referred to in clause (i) as aforesaid: Rs. 5,41,47,729.

Depositors were intimated regarding the maturity of deposits with a request to either renew or claim their Deposits. Your Company regularly sends letters/reminders via email to all those Fixed Deposit holders whose Deposits have matured as well as to those whose Deposits remain unclaimed. Where the Deposit remains unclaimed, followup action is also initiated through the concerned agent or branch.

Pursuant to Section 125(2) (i) of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('the IEPF Rules') as amended from time to time, matured Deposits remaining unclaimed for a period of seven years from the date they became due for payment are required to be transferred to the Investor Education and Protection Fund (IEPF) Authority established by the Central Government. Further, interest accrued on the matured deposits which remain unclaimed for a period of seven years from the date of payment will also be transferred to the IEPF under Section 125(2) (k). The concerned depositor can claim the Deposit and/or interest from the IEPF Authority by following the procedure laid down in the IEPF Rules.

During the year, an amount of Rs. 011 Crores has been transferred to the IEPF Authority.

During the year under review, the Company has not given any loans and advances in the nature of loans to its subsidiaries or associate(s) or loans and advances in the nature of loans to firms/companies in which Directors are interested.

Accordingly, the disclosure of particulars of loans/advances, etc., as required to be furnished in the Annual Accounts of the Company pursuant to Regulations 34 (3) and 53 (f) read with paragraph A of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable to the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS IN SECURITIES

Pursuant to Section 186(11) of the Companies Act, 2013 (“the Act”), the provisions of Section 186(4) of the Act requiring disclosure in the Financial Statements of the full particulars of the loans made and guarantees given or securities provided by a Non-Banking Financial Company in the ordinary course of its business and the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient of the loan or guarantee or security are exempted from disclosure in the Annual Report.

Further, pursuant to the provisions of Section 186(4) of the Act, the details of investments made by the Company are given in the Notes to the Financial Statements.

SUSTAINABILITY INITIATIVES

Sustainability has been deeply embedded in the Company's business model from the very beginning. At the heart of our organizational strategy is an inclusive business model which enables the residents of semi-urban and rural India to access formal channels of credit/finance, helping them create long-term value. In line with the Mahindra Group's motto: 'Rise for Good' your Company is also gearing up to be future ready by making sustainability and climate change an integral part of the business strategy and risk framework. Your Company has been enabling customers to meet their aspirations through a diversified portfolio of financial product offerings. It helps people build their homes through affordable housing finance solutions provided by Mahindra Rural Housing Finance Limited, secure their life and assets with insurance solutions facilitated by Mahindra Insurance Brokers Limited and offers investment options through its asset management subsidiary Mahindra Manulife Investment Management Private Limited. By providing the right set of opportunities and prospects in the remote areas, your Company has helped customers to forge ahead. The Company lays strong emphasis on customer centricity. Its customer base is spread across more than 3.80 lakh villages in India, with majority of them belonging to the 'Earn and Pay' segment.

Your Company commenced its journey towards reporting sustainability performance in 2008-09 through Mahindra Group's Sustainability Report and in the year 2012-13 the Company released its first standalone Sustainability Report. In FY 2019-20, the Company released its Eighth Sustainability Report with the theme “Positive & Promising”. The Report adheres to the Global Reporting Initiative's (GRI) Standards and is based on the Integrated Reporting framework. The Report is externally assured by KPMG.

The Content index has been checked by GRI and carries the GRI logo. FY 2019-20 was truly a year of building sustainable resilience for the Group Financial Services Sector. The “Positive & Promising” theme of the Report shows that despite a variety of challenges through the year, the Company collectively stayed true to its core purpose and values, helping its customers, teams and communities realize their true potential.

This Report is hosted on the Company's website and can be accessed at: https://mahindrafinance.com/ media/383687/mahindra-finance-sustainability-report-2019-20.pdf.

Your Company continued to focus on integrating Sustainability into the business practices and on building awareness for different stakeholders by taking various initiatives to engage them. In FY 2018-19, your Company became the 1^st Financial Company in India to be committed towards call to action for Science Based Targets.

The Science Based Targets initiative (SBTi) requires companies to publicly commit to setting carbon emission reduction targets that are in line with climate science.

Your Company was recognized for its Sustainability initiatives during the year under review, with the following accolades:

Included in the renowned FTSE4Good Emerging Markets Index series for ESG Performance for the 2^nd time. FTSE4Good is an equity index series that is designed to facilitate investment in companies that meet globally recognised corporate responsibility standards. It is designed to measure the performance of companies demonstrating strong Environmental, Social and Governance practices.

Ranked 48^th amongst Top 100 Indian companies for Sustainability & CSR under Responsible Business Rankings 2020 by Futurescape.

Included in the 'Dow Jones Sustainability Indices' Sustainability Yearbook 2021 (the only Indian Company among the Diversified Financial Services Companies to feature in the same).

Attained performance band “B” in the Carbon Disclosure Project (CDP) assessment 2020-21, greater than the Sector average and Asia Regional average.

Selected as the winner of the 'The Mahindra Group Sustainability Performance Award, 2020'.

Your Company's approach has been to make its environmental disclosure transparent, and accordingly,

 

it has been reporting disclosures and reports on its performance through the Carbon Disclosure Project (CDP) India since Financial Year 2011-12.

Sensitising the employees to a novel concept such as Sustainability has been one of the key initiatives of the Company during the year. Capacity building on Sustainability has been driven by Sustainability Courses on the learning platform. The Company launched a module on Human Rights in the reporting year and made it mandatory for all the employees. The Mahindra Group and the United Nations have partnered to offer a Course on Climate change for its employees.

During the year, your Company made proactive efforts to reduce CO2 emissions (carbon footprint) through Project “Mahindra Hariyali” by planting more than 30,000 saplings throughout the country.

Your Company is gearing up to be future ready by making sustainability and climate change an integral part of its risk framework and taking measures to mitigate and manage them. In the reporting year, the Company has enhanced its existing Risk Register by including applicable Climate change risks. Weather reports are assessed on a regular basis and aligned with business operations to protect the customers and minimize the risk impact. The outlook for the future has been positive and your Company is well equipped to enable its customers and communities to progress through its inclusive and sustainable business model.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report (“BRR”) of your Company for the year 2020-21 forms part of this Annual Report as required under Regulation 34(2)(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is appended as “Annexure II”.

Your Company is building an inclusive organisation by empowering all the stakeholders and facilitating their contribution towards growth that is both holistic and long term. Through the inclusive business model, your Company endeavours to cater to the bottom of the pyramid in the rural and semi-urban areas, enabling them to earn their livelihood through varied financial products and services. Your Company has always been conscious of its role as a responsible corporate citizen. Through its wide network of branches with locally-recruited employees, strong and lasting relationships with its stakeholders, large customer base, vast experience and market knowledge, your Company is providing financial resources to underserviced regions of the country.

The BRR can also be accessed on the Company's website at: https://mahindrafinance.com/discover-mahindra-finance/sustainability.

INTEGRATED REPORTING

Your Company is pleased to present its first Integrated Report, which encompasses both financial and non-financial information to enable Members to have a more holistic understanding of the Company's long-term perspective. This Integrated Report forms part of the Annual Report and is in consonance with the SEBI Circular dated 6^th February, 2017 An Integrated Report takes corporate reporting beyond just discussing the financial resources, since any value creation activity requires other resources like people, natural resources and business relationships.

The Integrated Annual Report for the year 2020-21 includes details such as the organisation's strategy, governance framework, performance and prospects of value creation based on the six (6) forms of capital viz. financial capital, manufactured capital, intellectual capital, human capital, social and relationship capital and natural capital.

The Integrated Annual Report for the year 2020-21 is hosted on the Company's website and can be accessed at the web-link: https://www.mahindrafinance.com/investor-zone/financial-information/

Since 2012-13, the Company has been annually publishing a Sustainability Report conforming to the guidelines of the Global Reporting Initiative ("GRI”). These Reports adhere to the GRI standards and are based on the Integrated Reporting framework and have been externally assured. This year the Sustainability Report has been combined with the Integrated Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

With a vision to transform rural and semi-urban India into a self-reliant, flourishing landscape, Mahindra Finance started its journey in 1991 and grew into a leading NBFC with an employee base of around 20,000 employees all over India. By supporting about 23 NGOs and implementing partners in the areas of Education & Livelihood, Healthcare and Environment, the Company strives to become an asset in the communities where it operates. Your Company's Corporate Social Responsibility ['CSR'] initiatives are aligned with the mission of transforming rural lives and hence focus on areas such as Education & Livelihood, Healthcare and Environment.

In FY 2021, to consolidate and further strengthen its endeavor to support drivers, your Company launched its flagship program-"SWABHIMAAN a holistic driver development program”.

This program is initiated to address the professional, financial, and familial challenges faced by the drivers and their families and further contribute to their overall wellbeing. This multi-year program aims to benefit over 75,000 beneficiaries through key interventions focusing on various aspects of a driver's life. Your Company will provide driver's training to freshers, road safety training to existing drivers, auto mechanic training to women, financial planning workshops, accidental and health insurance policy to drivers and award scholarships to driver's children.

Your Company continued its support to People with Disabilities [PwDs] by training them under 'Hunnar' program in various skills in BFSI, hospitality and ITES sectors to enhance their employability. 365 people with disabilities were trained and 274 were placed in jobs. The Company also conducted awareness campaigns about sanitation and hygiene under Healthcare and Swachh Bharat initiatives.

Reaffirming its commitment to the cause of education, your Company continued its support to the Nanhi Kali Program which has benefitted over 10,800 underprivileged girl children from socially and economically marginalized families living in urban, rural, and tribal parts of India. Your Company, to promote inclusive socio-economic growth of the marginalized youth, continued its support to Mahindra Pride School which skilled 1,822 youth and 100% have been placed. Further, Mahindra Pride Classrooms supported an additional 20 hours of online training to 30,627 final year students covering English Speaking, Life Skills, Aptitude, Interview, Group Discussion and Digital Literacy through Polytechnics and Arts & Science Colleges.

To continue with its commitment to increase the green cover, your Company's employees participated in the Mahindra Hariyali project. Employees from most of the branches, planted more than 30,000 saplings in selected locations.

Your Company provided ration kits to more than 5,000 drivers and their families affected by the COVID-19 pandemic across multiple States in India.

Apart from the key thrust areas, your Company contributed funds for other causes such as preservation and promotion of the fine arts and culture and supporting orphanage homes, differently abled homes and homes for the elderly to re-affirm its pledge to strive for a better society.

During the year under review, your Company has spent Rs. 32.54 Crores towards Corporate Social Responsibility on various CSR projects and programs. This includes the contribution of Rs. 517 Crores made to PM Cares Fund in the Financial Year 2019-20, which has been off-set against the CSR spend of the Financial Year 2020-21 as per the Notification D.O. No 05/1/2020-CSR-MCA dated 30^th March, 2020 issued by the Ministry of Corporate Affairs. Your Company is in compliance with the statutory requirements in this regard.

CSR COMMITTEE

The Company has duly constituted a CSR Committee in accordance with Section 135 of the Companies Act, 2013 to assist the Board and the Company in fulfilling the corporate social responsibility objectives of the Company.

Consequent upon the resignation of Dr. Anish Shah as a Member of the Committee with effect from 16^th May, 2020 and cessation of Mr. V. Ravi, Member, as Executive Director & Chief Financial Officer of the Company with effect from 25^th July, 2020, the Committee presently comprises of the following Directors:

 

Name	Category
Mr. Dhananjay Mungale	- Chairman of the Committee (Independent Director)
Ms. Rama Bijapurkar	- Independent Director
Mr. Ramesh Iyer	- Vice-Chairman & Managing Director

 

During the year under review, 4 (four) CSR Committee Meetings were held, details of which are provided in the Corporate Governance Report.

CSR POLICY

During the year under review, the Board based on the recommendation of the CSR Committee, amended the CSR Policy to align the same in accordance with the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 and Section 135 of the Companies Act, 2013, as amended, effective from 22^nd January, 2021.

The revised CSR Policy is hosted on the Company's website and can be accessed at the web-link: https:// www.mahindrafinance.com/investor-zone/corporate-governance. The detailed Annual Report on the CSR activities undertaken by your Company during the year, as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is set out in “Annexure III” of this Report.

ANNUAL RETURN

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return as on 31^st March, 2021 in Form No. MGT-7, is available on the Company's website and can be accessed at the web-link: https://www.mahindrafinance.com/investor-zone/financial-information.

BOARD MEETINGS, EXTRAORDINARY GENERAL MEETING AND ANNUAL GENERAL MEETING

The calendar of the Board/Committee Meetings and the Annual General Meeting is circulated to the Directors in advance to enable them to plan their schedule for effective participation at the respective meetings. Additional Board Meetings are convened by giving appropriate notice to address business exigencies. Apart from Meetings, at times, certain decisions are taken by the Board/Committee(s) through Circular Resolutions, after a discussion over a conference call between Board/Committee Members.

All the decisions and urgent matters approved by way of Circular Resolutions/Circular Note are placed and noted at the subsequent Board/Committee Meeting(s).

The Board of Directors met seven times during the year under review, on 15^th May, 2020, 1^st June, 2020, 18^th July, 2020, 18^th September, 2020, 26^th October, 2020, 28^th January, 2021 and 5^th March, 2021. The requisite quorum was present for all the Meetings. The maximum time gap between any two Meetings was not more than one hundred and twenty days. These Meetings were well attended. The 30^th Annual General Meeting ('AGM') of the Company was held on 10^th August, 2020.

During the year under review, an Extraordinary General Meeting ('EGM') of the Members was held on 30^th June, 2020 to approve the increase in the Authorised Share Capital of the Company and consequential amendment(s) to the Capital Clause of the Memorandum of Association of the Company.

Detailed information on the Meetings of the Board, its Committees, EGM and the AGM is included in the Report on Corporate Governance, which forms part of this Annual Report.

MEETINGS OF INDEPENDENT DIRECTORS

The Independent Directors met twice during the year under review, on 13^th August, 2020 and 4^th March, 2021. The Meetings were conducted in an informal manner without the presence of the Whole-time Director(s), the Non-Executive Non-Independent Directors, or any other Management Personnel.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company has various Committees which have been constituted as a part of good corporate governance practices and the same are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

Audit Committee

As on 31^st March, 2021, the Audit Committee comprised of four Independent Directors and one Non-Executive NonIndependent Director:

Name	Category
Mr. C. B. Bhave	Chairman of the Committee (Independent Director)
Mr. Dhananjay Mungale	Independent Director
Ms. Rama Bijapurkar	Independent Director
Mr. Milind Sarwate	Independent Director
Dr. Anish Shah	Non-Fxec.iit.ive Non-Independent Director

Changes in Committee Members during the year:

•    Mr. V. S. Parthasarathy ceased to be a Member of the Committee consequent upon his resignation as a NonExecutive Non-Independent Director of the Company with effect from 18^th September, 2020.

•    Mr. Amit Raje, Non-Executive Non-Independent Director of the Company was appointed as a Member of the Committee with effect from 28^th January, 2021.

Pursuant to his appointment as a Whole-time Director of the Company with effect from 1^st April, 2021, and in order to be consistent with the principles of good governance, Mr. Amit Raje resigned as a Member of the Audit Committee with effect from 5^th March, 2021.

•    Mr. Arvind V. Sonde ceased to be a Member of the Committee consequent to his resignation as an Independent Director of the Company with effect from 15^th March, 2021.

During the year, 7 (seven) Audit Committee Meetings were held, details of which are provided in the Corporate Governance Report.

The recommendations of the Audit Committee were duly approved and accepted by the Board during the year under review.

Other Board Committees

The other Committees of the Board are:

i)    Nomination and Remuneration Committee

ii)    Stakeholders Relationship Committee

iii)    Corporate Social Responsibility Committee

iv)    Risk Management Committee

v)    Asset Liability Committee

vi)    IT Strategy Committee

vii)    Committee for Strategic Investments

The details with respect to the composition, powers, roles, terms of reference, Meetings held and attendance of the Directors at such Meetings of the relevant Committees are given in detail in the Report on Corporate Governance of the Company which forms part of this Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Chairman of the Board of Directors

i)    Resignation of Mr. Dhananjay Mungale as Chairman of the Board with effect from close of business hours on 1^st April, 2021

Mr. Dhananjay Mungale (DIN: 00007563) stepped down as the Chairman of the Board of Directors with effect from the close of business hours on 1^st April, 2021.

The Board has placed on record its deep appreciation of the contribution and valuable services rendered by Mr. Mungale during his association as Chairman of the Board since 2016.

Mr. Dhananjay Mungale continues to be an Independent Director of the Company.

ii)    Appointment of Dr. Anish Shah as Chairman of the Board of Directors with effect from 2^nd April, 2021

In the light of Mr. Dhananjay Mungale relinquishing his office as Chairman of the Board of Directors of the Company and on the recommendation of the Nomination and Remuneration Committee, the Board at its Meeting held on 28^th January, 2021, appointed Dr. Anish Shah (DIN: 02719429) as Non-Executive Chairman of the Board with effect from 2^nd April, 2021.

?r. Anish Shah is currently the Managing Director and Chief Executive Officer of Mahindra & Mahindra Limited ['M&M'], the Holding Company, with responsibility for the Group Corporate Office and full oversight of all businesses other than the Auto and Farm sectors of M&M.

Appointment/Re-Appointment of Directors Mr. Ramesh Iyer

Re-appointment of Mr. Ramesh Iyer, Managing Director designated as Vice-Chairman & Managing Director

Mr. Ramesh Iyer has been the Managing Director of the Company since 30^th April, 2001 and has played a key role in building Mahindra Finance into one of India's leading rural finance companies, since 1995.

In March 2016, Mr. Iyer was elevated as the Vice-Chairman & Managing Director of the Company.

The term of office of Mr. Ramesh Iyer, Vice-Chairman & Managing Director of the Company, expires on 29^th April, 2021.

On the recommendation of the Nomination and Remuneration Committee ['NRC'], the Board of Directors at its Meeting held on 23^rd April, 2021, has re-appointed Mr. Ramesh Iyer [DIN: 00220759] as the Managing Director, liable to retire by rotation, designated as Vice-Chairman & Managing Director for a period of 3 [three] years with effect from 30^th April, 2021 to 29^th April, 2024 [both days inclusive], subject to the approval of Members at the ensuing Annual General Meeting.

Mr. Amit Raje

Appointment of Mr. Amit Raje as a Non-Executive NonIndependent Director

Pursuant to the recommendation of the NRC, the Board at its Meeting held on 18^th September, 2020, appointed Mr. Amit Raje [DIN: 06809197] as an Additional Non-Executive NonIndependent Director of the Company with effect from 18^th September, 2020, liable to retire by rotation.

The Members of the Company have by means of an Ordinary Resolution passed on 3^rd March, 2021 vide Postal Ballot conducted through Remote E-voting mode, approved the appointment of Mr. Amit Raje as a Non-Executive NonIndependent Director of the Company.

Appointment of Mr. Amit Raje as Whole-time Director of the Company designated as “Chief Operating Officer Digital Finance - Digital Business Unit”

 

The Board of Directors of the Company at its Meeting held on 5^th March, 2021, has on the recommendation of the NRC, appointed Mr. Amit Raje as a Whole-time Director of the Company liable to retire by rotation, designated as “Chief Operating Officer Digital Finance -Digital Business Unit” for a period of 5 [five] years, with effect from 1^st April, 2021 till 31^st March, 2026 [both days inclusive], subject to approval of the Members at the ensuing Annual General Meeting.

Dr. Rebecca Nugent

Appointment of Dr. Rebecca Nugent as an Independent Director of the Company

Based on the recommendation of the NRC and on the proposal of the Board of Directors, Dr. Rebecca Nugent [DIN: 09033085] was appointed as an Independent Director of the Company, to hold office for a term of 5 [five] consecutive years commencing from 5^th March, 2021 to 4^th March, 2026 [both days inclusive], vide an Ordinary Resolution passed by the Members by means of a Postal Ballot through remote e-voting mode on 3^rd March, 2021.

Mr. Amit Kumar Sinha

Appointment of Mr. Amit Kumar Sinha as a Non-Executive Non-Independent Director

Pursuant to the recommendation of the NRC, the Board at its Meeting held on 23^rd April, 2021, appointed Mr. Amit Kumar Sinha [DIN: 09127387] as an Additional Non-Executive NonIndependent Director with effect from 23^rd April, 2021, to hold office up to the date of the ensuing Annual General Meeting ['AGM'] of the Company and thereafter, subject to the approval of the Members at the said AGM, as a NonExecutive Non-Independent Director, liable to retire by rotation.

The Company has received the requisite Notice from a Member in writing proposing his appointment as a Director of the Company.

Cessation of Directors

Mr. V. Ravi

As mentioned in the previous Annual Report, Mr. V. Ravi [DIN: 00307328] ceased to be the Executive Director & Chief Financial Officer of the Company upon completion of his tenure with effect from 25^th July, 2020. The Board has placed on record its deep appreciation of Mr. V. Ravi's immense contribution and valuable services during his long association with the Company and acknowledged Mr. Ravi's outstanding experience and expertise in serving

the Company including the Group's Financial Services Sector companies.

Mr. V. S. Parthasarathy

Resignation of Mr. V. S. Parthasarathy as Non-Executive Non-Independent Director of the Company

Mr. V. S. Parthasarathy (DIN: 00125299) resigned as Non-Executive Non-Independent Director with effect from 18^th September, 2020.

Consequently, Mr. V. S. Parthasarathy also ceased to be a Member of the Audit Committee, Nomination and Remuneration Committee, Risk Management Committee, Asset Liability Committee and Committee for Strategic Investments of the Board effective 18^th September, 2020.

Mr. Parthasarathy joined the Board of Directors of your Company in July 2014. The Board acknowledged Mr. V. S. Parthasarathy's contribution to the Company and has placed on record its appreciation of the invaluable services rendered by Mr. Parthasarathy during his association with the Company.

Mr. Arvind V. Sonde

Resignation of Mr. Arvind V. Sonde as an Independent Director of the Company

Mr. Arvind V. Sonde (DIN: 00053834) was appointed as an Independent Director of the Company by the Members through a Postal Ballot, with effect from 9^th December, 2019 for a term of five years.

Mr. Arvind V. Sonde resigned as a Member of the Board with effect from 15^th March, 2021, due to other professional and family commitments. Mr. Sonde has confirmed that there are no material reasons for his resignation, other than those mentioned in his resignation letter.

Subsequently, Mr. Arvind V. Sonde also ceased to be a Member of the Audit Committee and Risk Management Committee of the Board effective 15^th March, 2021.

The Board has placed on record its sincere appreciation of the valuable services rendered by Mr. Sonde as an Independent Director of the Company.

RETIREMENT BY ROTATION

Mr. Ramesh Iyer retires by rotation and, being eligible, offers himself for re-appointment at the 31^st Annual General Meeting of the Company scheduled to be held on 26^th July, 2021.

Re-appointment of Independent Directors

None of the Independent Directors of the Company is due for re-appointment.

Resignation of Independent Director(s)

During the year under review, except for Mr. Arvind V. Sonde, none of the Independent Directors of the Company had resigned before the expiry of his/her respective tenure(s).

Declaration by Directors

All the Directors of the Company have confirmed that they satisfy the “fit and proper” criteria as prescribed under Chapter XI of RBI Master Direction No. DNBR. PD.008/03.10.119/2016-17 dated 1^st September, 2016, as amended, and that they are not disqualified from being appointed/continuing as Directors in terms of Section 164(2) of the Companies Act, 2013.

Declaration by Independent Directors

All the Independent Directors of the Company have given their respective declarations/disclosures under Section 149(7) of the Companies Act, 2013 ('Act') and Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations') and have confirmed that they fulfill the criteria of Independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations, and have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.

Further, the Board after taking these declarations/ disclosures on record and acknowledging the veracity of the same, concluded that the Independent Directors are persons of integrity and possess the relevant proficiency, expertise and experience to qualify as Independent Directors of the Company and are Independent of the Management of the Company.

In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by the Indian Institute of Corporate Affairs, Manesar ('IICA'). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of 2 (two) years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption.

The Independent Directors of the Company except Dr. Rebecca Nugent, are exempt from the requirement to undertake the online proficiency self-assessment test conducted by IICA. Dr. Rebecca Nugent will be undertaking the said test in due course.

Key Managerial Personnel

The following persons 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:

Mr. Ramesh Iyer, Vice-Chairman & Managing Director.

Mr. Amit Raje, Whole-time Director of the Company designated as “Chief Operating Officer Digital Finance -Digital Business Unit”.

Mr. Vivek Karve, Chief Financial Officer of the Company and Group Financial Services Sector.

Ms. Arnavaz M. Pardiwalla, Company Secretary.

Changes in Key Managerial Personnel Chief Financial Officer

Mr. V. Ravi ceased to be the Chief Financial Officer of the Company on completion of his tenure as Executive Director & Chief Financial Officer with effect from 25^th July, 2020.

Based on the recommendations of the Nomination and Remuneration Committee and the Audit Committee, the Board of Directors of the Company at its Meeting held on 18^th July, 2020 appointed Mr. Vivek Karve as the Chief Financial Officer designated as 'Chief Financial Officer of the Company and Group Financial Services Sector' with effect from 14^th September, 2020.

Directors’ Responsibility Statement

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, (“the Act”) your Directors, based on the representations received from the Operating Management and after due enquiry, confirm that:

i.    in the preparation of the annual accounts for financial year ended 31^st March, 2021, the applicable accounting standards have been followed and there are no material departures in adoption of these standards.

ii.    they have in consultation with the Statutory Auditors selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and

 

fair view of the state of affairs of the Company as at 31^st March, 2021 and of the profit of the Company for the year ended on that date.

iii.    they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv.    they have prepared the annual accounts for financial year ended 31^st March, 2021 on a going concern basis.

v.    they have laid down adequate internal financial controls to be followed by the Company and that such internal financial controls were operating effectively during the financial year ended 31^st March, 2021.

vi.    they have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively during the financial year ended 31^st March, 2021.

Performance Evaluation of the Board

The Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“the Listing Regulations”) stipulate the evaluation of the performance of the Board, its Committees, Individual Directors and the Chairperson.

The Company has formulated a Policy for performance evaluation of the Independent Directors, the Board, its Committees and other individual Directors which includes criteria for performance evaluation of the Non-Executive Directors and Executive Directors.

The evaluation framework for assessing the performance of Directors comprises various key areas such as attendance at Board and Committee Meetings, quality of contribution to Board discussions and decisions, strategic insights or inputs regarding future growth of the Company and its performance, ability to challenge views in a constructive manner, knowledge acquired with regard to the Company's business/activities, understanding of industry and global trends, etc.

The evaluation involves self-evaluation by the Board Member and subsequent assessment by the Board of Directors. A member of the Board will not participate in the discussion of his/her evaluation.

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of 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 the Directors individually [including Independent Directors). The evaluation process was based on the affirmation received from the Independent Directors that they met the independence criteria as required under the Companies Act, 2013, and the Listing Regulations.

Feedback was sought by way of well-defined and structured questionnaires covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, areas of responsibility, execution and performance of specific duties, obligations and governance, compliance, oversight of Company's subsidiaries, etc., and the evaluation was carried out based on responses received from the Directors. The aspects of succession planning were also considered.

A separate exercise was carried out by the Nomination and Remuneration Committee of the Board to evaluate the performance of individual Directors who were evaluated on several parameters such as level of engagement and contribution, independence of judgment safeguarding the interest of the Company and its minority shareholders and knowledge acquired with regard to the Company's business/activities.

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 Directors and Non-Executive Directors.

The performance evaluation of the Independent Directors was carried out by the entire Board excluding the Director being evaluated.

The outcome of the Board Evaluation for the Financial Year 2020-21 was discussed by the Nomination and Remuneration Committee and the Board at their respective meetings held in April 2021. Qualitative comments and suggestions of Directors were taken into consideration by Mr. Dhananjay Mungale, former Chairman of the Board and Mr. C. B. Bhave, former Chairman of the Nomination and Remuneration Committee. The Directors have expressed their satisfaction with the evaluation process.

Familiarisation Programme for Independent Directors

The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the

Company and related matters along with details of number of programmes and number of hours spent by each of the Independent Directors during the Financial Year 2020-21, in terms of the requirements of SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015 are available on the website of the Company and can be accessed at the web-link: https://www.mahindrafinance.com/ media/383820/familiarisation-programme-for-the-f-y-2020-21-website-uploading.pdf

Policies on Appointment of Directors and Senior Management and Remuneration of Directors, Key Managerial Personnel and Employees

i)    Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management

In accordance with the provisions of Section 134[3] [e] of the Companies Act, 2013 [“the Act”] read with Section 178[2] of the Act and Regulation 17 of the SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015, your Company has adopted a Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management, which inter alia, includes the criteria for determining qualifications, positive attributes and independence of Directors, identification of persons who are qualified to become Directors and who may be appointed in the Senior Management team, succession planning for Directors and Senior Management, and the Talent Management framework of the Company.

This Policy is available at the Company's website at the web-link: https://mahindrafinance.com/investor-zone/corporate-governance.

ii)    Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel and Employees of the Company

Your Company has also adopted the Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel and Employees of the Company in accordance with the provisions of sub-section [4] of Section 178 of the Act.

Dr. Anish Shah has been appointed as the Non-Executive Chairman of the Board of Directors with effect from 2^nd April, 2021. Dr. Shah is in the whole-time employment of Mahindra & Mahindra Limited ['M&M'], the Holding Company and draws remuneration from it. Dr. Anish Shah is not paid any sitting fees or remuneration by the Company.

In view of the above, the Policy on Remuneration of Directors has been amended effective 2^nd April, 2021, in line with the aforesaid requirements and administrative changes.

The Policy on Remuneration of Directors, as amended, and the Remuneration Policy for Key Managerial Personnel and Employees of the Company, are appended as “Annexure IV-A” and “Annexure IV-B”, respectively, and form part of this Report. These Polices are also available at the Company's website at the web-link: https://mahindrafinance.com/investor-zone/corporate-governance.

The criteria for determining qualifications, positive attributes and independence of a Director and the Remuneration Policies for Directors, Key Managerial Personnel and other employees have been discussed in detail in the Report on Corporate Governance.

AUDITORS

Statutory Auditors

Messrs. B S R & Co. LLP, Chartered Accountants, (ICAI Firm Registration No.101248W/W-100022), were appointed as Statutory Auditors of the Company at the Twenty-seventh Annual General Meeting ('AGM') to hold office for a period of five consecutive years, commencing from the conclusion of the 27^th AGM held on 24^th July, 2017 till the conclusion of the 32^nd AGM of the Company to be held in the year 2022.

The Statutory Auditors have given a confirmation to the effect that they are eligible to continue with their appointment and that they have not been disqualified in any manner from continuing as Statutory Auditors. The remuneration payable to the Statutory Auditors shall be determined by the Board of Directors based on the recommendation of the Audit Committee.

The Report given by the Auditors on the Financial Statements of the Company for the Financial Year 2020-21 is a part of the Annual Report. The Report is unmodified and does not contain any qualification, reservation, adverse remark or disclaimer.

The Statutory Auditors were present at the last AGM. Secretarial Auditor

The Board of Directors of the Company has appointed Messrs. KSR & Co., Company Secretaries LLP to conduct the Secretarial Audit of the Company pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. In accordance with the

 

f provisions of sub-section (1) of Section 204, the Secretarial Audit Report for the Financial Year 2020-21 is appended to j this Report as “Annexure V”.

The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

l The Secretarial Auditor was present at the last AGM.

', Secretarial Audit of Material Unlisted Indian 3 Subsidiary

k Mahindra Rural Housing Finance Limited ('MRHFL), a ^- material subsidiary of the Company undertakes Secretarial Audit every year under Section 204 of the Companies Act, 2013. The Secretarial Audit of MRHFL for the Financial Year 2020-21 was carried out pursuant to Section 204 of the ¹Â Companies Act, 2013 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, ¹Â Â Â Â 2015. The Secretarial Audit Report of MRHFL submitted

by Messrs. KSR & Co., Company Secretaries LLP, does not contain any qualification, reservation or adverse remark or disclaimer. The Secretarial Audit Report is appended as “Annexure VI” and forms part of this Report.

i Cost Records and Cost Audit

³Â Maintenance of cost records and requirement of cost audit ¹Â as prescribed under the provisions of Section 148(1) of the ^ Companies Act, 2013 are not applicable in respect of the

¹Â business activities carried out by the Company. f

Reporting of Frauds by Auditors

3 During the year under review, the Statutory Auditors and t the Secretarial Auditor have not reported any instances i of frauds committed in the Company by its Officers or 3 Employees, to the Audit Committee under Section 143(12) j of the Companies Act, 2013, details of which need to be t mentioned in this Report.

PARTICULARS OF CONTRACTS OR f ARRANGEMENTS WITH RELATED _t^f PARTIES

” All contracts/arrangements/transactions entered into by the Company during the Financial Year with Related Parties were in the ordinary course of business and on an arm's length basis. During the year under review, your Company had not entered into any contract/arrangement/ transaction with Related Parties which could be considered ^ material in accordance with the Policy on Related Party ^t Transactions. Pursuant to Section 134 (3) (h) read with Rule ³Â Â Â Â 8 (2) of the Companies (Accounts) Rules, 2014, there are

* no transactions to be reported under Section 188 (1) of the ^f Companies Act, 2013. Accordingly, the disclosure of Related

3

provisions. Furthermore, credit losses may increase due to exposure to vulnerable sectors of the economy such as retail, hospitality and commercial real estate. The impact of the pandemic on the long-term prospects of businesses in these sectors is uncertain and may lead to significant credit losses on specific exposures, which may not be fully captured in ECL estimates.

Further, in accordance with the regulatory expectation of the Reserve Bank of India to bring down the Net Non-Performing Asset [NPA] ratio below 4%, which the Management has agreed with, the Company recorded an additional provision of Rs. 1,300 Crores during fourth quarter on Stage 3 loans.

The final impact of this pandemic and the Company's impairment loss allowance estimates are inherently uncertain, and hence, the actual impact may be different than that estimated based on the conditions prevailing as at the date of approval of these financial results. The management will continue to closely monitor the material changes in the macro-economic factors impacting the operations of the Company.

The continuing rapid spread of COVID-19 pandemic, emergence of new variants of the virus and the subsequent restrictions/control measures announced by the respective State Governments are the events which have continued till the date of the announcement of financial results of the Company. These uncertainties may adversely impact the Company's business operations in the future period.

Other than the above mentioned situation affecting the Company, there is no material change and commitment that have occurred after the closure of the Financial Year 2020-21 till the date of this Report, which would affect the financial position of your Company.

RISK MANAGEMENT POLICY

Your Company has a comprehensive Risk Management Policy in place and has laid down a well-defined risk management framework to identify, assess and monitor risks and strengthen controls to mitigate risks. Your Company has established procedures to periodically place before the Risk Management Committee and the Board of Directors, the risk assessment and minimisation procedures being followed by the Company and steps taken by it to mitigate these risks.

The Risk Management Policy, inter alia, includes identification therein of elements of risk, including Cyber Security and related risks as well as those risks which in the opinion of the Board may threaten the existence of the Company. The Risk management process has been established across

 

Party Transactions, as required under Section 134 [3] (h) of the Companies Act, 2013 in Form AOC-2 is not applicable to the Company.

The Policy on Related Party Transactions as approved by the Board of Directors of the Company is uploaded on the website of the Company and same can be accessed on the web-link: https://www.mahindrafinance.com/investor-zone/corporate-governance/.

Further details on the transactions with Related Parties are provided in the accompanying Financial Statements.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

The ongoing COVID-19 pandemic and its effect on the overall economy has impacted consumer sentiments and collections thus affecting the Company's performance, and the future effects of the outbreak remain uncertain. The outbreak has necessitated the Government to respond at unprecedented levels to protect public health, local economies and livelihoods. There remains a risk of subsequent waves of infection, as evidenced by the recently emerged variants of the virus. All these have substantially increased the estimation uncertainty in the preparation of the Financial Statements for the year ended 31^st March, 2021.

Your Company has developed various accounting estimates in these Financial Statements based on forecasts of economic conditions which reflect expectations and assumptions as at 31^st March, 2021 about future events that the management believe are reasonable under these circumstances. There is a considerable degree of judgement involved in preparing forecasts. The underlying assumptions are also subject to uncertainties which are often outside the control of the Company. Accordingly, actual economic conditions are likely to be different from those forecast since anticipated events frequently do not occur as expected, and the effect of those differences may significantly impact accounting estimates included in these Financial Statements.

The significant accounting estimates impacted by these forecasts and associated uncertainties are predominantly related to expected credit losses, fair value measurement, and recoverable amount assessments of non-financial assets.

Across the geographies and segments in which the Company operates, the COVID-19 outbreak has led to a worsening of economic conditions and increased uncertainty, which has been reflected in higher Expected Credit Loss ['ECL]

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. Your Company has a robust organisational structure for managing and reporting on risks.

The development and implementation of Risk Management Policy adopted by the Company is discussed in detail in the Management Discussion and Analysis chapter, which forms part of this Annual Report.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company promotes ethical behaviour in all its business activities and has established a vigil mechanism for its Directors, Employees and Stakeholders associated with the Company to report their genuine concerns. The Vigil Mechanism as envisaged in the Companies Act, 2013 and the Rules prescribed thereunder and the Listing Regulations is implemented through the Whistle Blower 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.

The Board at its Meeting held on 23^rd April, 2021 has pursuant to the recommendations of the Audit Committee, and in keeping with the changing Corporate Governance landscape, adopted a Revised Whistle Blower Policy of the Company.

As per the Whistle Blower Policy implemented by the Company, the Employees, Directors, customers, dealers, vendors, suppliers, or any Stakeholders associated with the Company are free to report illegal or unethical behaviour, actual or suspected fraud or violation of the Company's Codes of Conduct or Corporate Governance Policies or any improper activity to the Ethics Helpline Provider or the Chairperson of the Audit Committee of the Company or the Code of Conduct Committee. The Whistle Blower Policy also provides for reporting of insider trading violations as well as reporting of instances of leak of Unpublished Price Sensitive Information by the employees.

The Whistle Blower Policy provides for protected disclosure and protection to the Whistle Blower. Under the Whistle Blower Policy, the confidentiality of those reporting violation(s) is protected and they are not subject to any discriminatory practices. Protected disclosures can also be made by sending an email at the designated email id:

[e-mail] or any other mechanism as prescribed in the Whistle Blower Policy.

The Chairperson of the Audit Committee can be reached by sending a letter to the below address:

Chairperson of the Audit Committee Mahindra & Mahindra Financial Services Limited Mahindra Towers, 4^th Floor,

Dr. G. M. Bhosale Marg,

P. K. Kurne Chowk, Worli,

Mumbai - 400 018.

The Whistle Blower Policy has been appropriately communicated within the Company and is available on the website of your Company at the web-link: https://mahindrafinance.com/media/384157/vigil-mechanism.pdf.

The Audit Committee is apprised on the vigil mechanism on a periodic basis. During the year, no personnel have been denied access to the Audit Committee.

SUBSIDIARIES, JOINT VENTURE(S) AND ASSOCIATE(S)

The Company's Subsidiaries, Joint Venture(s) and Associate(s) continue to contribute to the overall growth in revenues and overall performance of your Company. A Report on the performance and financial position of each of the subsidiaries, joint venture(s) and the associate companies included in the Consolidated Financial Statements and their contribution to the overall performance of the Company, is provided in Form AOC-1 as ‘Annexure A’ to the Consolidated Financial Statements and forms part of this Annual Report.

Your Company has formulated a Policy for determining 'Material' Subsidiaries as defined in Regulation 16 of the Listing Regulations. This Policy has been hosted on the website of the Company and can be accessed at the web-link: https://mahindrafinance.com/investor-zone/ corporate-governance.

SUBSIDIARIES

Mahindra Insurance Brokers Limited

During the year under review, Mahindra Insurance Brokers Limited ('MIBL), the subsidiary in the business of Direct and Re-insurance Broking, serviced approximately 1.43 million insurance cases, for both Life and Non-Life Retail business. There is de-growth of 14% in Gross Premium facilitated for the Corporate and Retail business lines, decreasing from Rs. 2,431.89 Crores in the Financial Year 2019-20 to Rs. 2,101.06 Crores in the Financial Year 2020-21. The Total Income decreased by 20% from Rs. 336.89 Crores

in the Financial Year 2019-20 to Rs. 268.56 Crores in the Financial Year 2020-21. The Profit before Tax decreased by 40% from Rs. 73.90 Crores to Rs. 43.98 Crores and the Profit after Tax decreased by 40% from Rs. 53.36 Crores to Rs. 32.03 Crores during the same period. MIBL has been able to reach the benefit of insurance to over 3 lakh villages across India.

During the year, MIBL focused on improving manpower productivity and efficiency through automation projects. There is also a sharper focus on diversifying the customer base through additional distribution channel including the Point of Sales Person channel and the direct online sales through paybima.com. Though some of the planned investments in some of the business divisions were delayed, there is no change in the long term strategy of MIBL.

Mahindra Rural Housing Finance Limited

Mahindra Rural Housing Finance Limited ('MRHFL), the Company's subsidiary in the business of providing loans for purchase, renovation, construction of houses to individuals in the rural and semi-urban areas of the country, registered a total income of Rs. 1,454.7 Crores as compared to Rs. 1,527.6 Crores for the previous year, registering a decline of 4.8%. Profit before tax was 5% lower at Rs. 195.3 Crores as compared to Rs. 205.6 Crores for the previous year. Profit after tax was 1.6% higher at Rs. 151.0 Crores as compared to Rs. 148.6 Crores for the previous year.

During the year under review, MRHFL disbursed loans aggregating to Rs. 796.6 Crores as against Rs. 1,876.4 Crores in the previous year.

MRHFL continued its focus on serving customers in rural India. Majority of the loans disbursed were to customers in villages with an average annual household income of less than Rs. 2.00 lakhs. During the year under consideration, MRHFL disbursed home loans to around 34,559 households (in addition to around 10,45,898 existing households as on 31^st March, 2020). MRHFL has been expanding its geographical presence to provide affordable services for rural households.

Mahindra Manulife Investment Management Private Limited and Mahindra Manulife Trustee Private Limited

Equity Infusion by Manulife Investment Management (Singapore) Pte. Limited

As mentioned in the previous Annual Report, Manulife Investment Management (Singapore) Pte. Limited has acquired 49% of the equity share capital of Mahindra

Manulife Investment Management Private Limited [formerly nown as Mahindra Asset Management Company Private Jmited ('MAMCPL)] and Mahindra Manulife Trustee Private Jmited [formerly known as Mahindra Trustee Company Private Limited ('MTCPL')], then wholly-owned subsidiaries, pursuant to the execution of the Share Subscription Agreement and Shareholders' Agreement by and amongst :he Company, MAMCPL, MTCPL and Manulife on 21^st June, 019.

Consequent to the above, the shareholding of the Company n MAMCPL and MTCPL stood reduced from 100% to 51% pf the share capital, respectively.

rhe erstwhile names of MAMCPL and MTCPL have been changed to Mahindra Manulife Investment Management Private Limited and Mahindra Manulife Trustee Private Jmited respectively, with effect from 19^th May, 2020.

Mahindra Manulife Investment Management Private Limited

Mahindra Manulife Investment Management Private Limited 'MMIMPL) acts as an Investment Manager for the schemes pf Mahindra Manulife Mutual Fund. As on 31^st March, 2021, MMIMPL was acting as the Investment Manager for sixteen chemes.

rhe Average Assets under Management in these sixteen schemes were Rs. 5,249 Crores in March 2021 as compared :o Rs. 4,771 Crores in March 2020. Of these assets, Rs. 2,591 Crores were in equity schemes in March 2021 as compared to Rs. 1,616 Crores in March 2020. MMIMPL aas empanelled more than 15,600 distributors and opened 2,13,610 investor accounts in these schemes, recording a Jse of more than 12%.

During the year under consideration, the total income of MMIMPL was Rs. 30.5 Crores as compared to Rs. 17 Crores ^:or the previous year. The operations for the year under consideration have resulted in a loss of Rs. 26.7 Crores as against a loss of Rs. 37.9 Crores during the previous year.

Mahindra Manulife Trustee Private Limited

Mahindra Manulife Trustee Private Limited ('MMTPL) acts as the Trustee to Mahindra Manulife Mutual Fund.

During the year, MMTPL earned trusteeship fees of Rs. 33 _akhs and other income of Rs. 2.7 Lakhs as compared to Rs. 20.9 Lakhs and Rs. 1 Lakh respectively, for the previous /ear. MMTPL recorded a loss of Rs. 0.97 Lakh for the year under review as against a loss of Rs. 1.8 Lakhs in the previous year.

Mahindra Finance CSR Foundation

Mahindra Finance CSR Foundation was incorporated on 2^nd April, 2019 as a wholly-owned subsidiary of the Company registered under Section 8 of the Companies Act, 2013, to promote and support CSR projects and activities. The CSR Foundation is focused on identifying need-based and long-term social impact interventions in cause areas such as health, education, employment & livelihood generation and environment.

In the current Financial Year, the Foundation has launched a flagship CSR program for one of the important stakeholders of your Company i.e. the Driver Community. It is aimed at providing a safety net to drivers and their family members from a holistic perspective and various interventions would be implemented in collaboration with local NGO partners in select States in India.

JOINT VENTURE/ASSOCIATE

Mahindra Finance USA LLC.

The joint venture company's disbursement registered a growth of 11.5% to USD 860.7 Million for the year ended 31^st March, 2021 as compared to USD 772.2 Million for the previous year.

Total Income declined by 10% to USD 61.9 Million for the year ended 31^st March, 2021 as compared to USD 68.8 Million for the previous year. Profit before tax was 77% higher at USD 23.4 Million as compared to USD 13.2 Million for the previous year. Profit after tax grew at a healthy rate of 82% to USD 175 Million as compared to USD 9.6 Million in the previous year.

Ideal Finance Limited (Sri Lanka)

In August, 2019, your Company entered into a Share Subscription, Share Purchase and Shareholders' Agreement with Ideal Finance Limited (Sri Lanka) ['Ideal Finance'] and its existing Shareholders to form and operate a Joint Venture in the financial services sector in Sri Lanka. The joint venture will capitalise on the Company's expertise of over 25 years in the financial services domain and Ideal Finance's domestic market knowledge to build a leading financial services business in Sri Lanka.

Till date your Company has acquired 38.20% stake in Ideal Finance for an amount equivalent to LKR 110 Crores (approximately Rs. 44 Crores). Your Company is committed to enhancing its equity stake in Ideal Finance up to 58.2% aggregating to an amount not exceeding LKR 200.3 Crores.

 

This joint venture will further strengthen your Company's presence in the financial services business. It will help your Company's growth in key emerging markets.

Names of Companies which have become or ceased to be Subsidiaries, Joint Ventures or Associate Companies during the year

During the year under review, no company has become or ceased to be a subsidiary, joint venture or associate of your Company.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company, its subsidiaries, associate(s) and joint ventures for the Financial Year 2020-21, prepared in accordance with the relevant provisions of the Companies Act, 2013 and applicable Indian Accounting Standards along with all relevant documents and the Auditors' Report form part of this Annual Report.

The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies, associate(s) and joint ventures.

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the Financial Statements of the Company, Consolidated Financial Statements along with relevant documents and separate annual accounts in respect of each of the subsidiaries are available on the website of the Company and can be accessed at the web-link: https:// www.mahindrafinance.com/investor-zone/financial-information.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY’S OPERATIONS IN FUTURE

There are no significant and material orders passed by the regulators or courts or tribunals that would impact the going concern status of the Company and its future operations.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Your Company has in place adequate internal financial controls with reference to the Financial Statements

commensurate with the size, scale and complexity of its operations.

Your Company uses various industry standard systems to enable, empower and engender businesses and also to maintain its Books of Account. The transactional controls built into these systems ensure appropriate segregation of duties, the appropriate level of approval mechanisms and maintenance of supporting records. The systems, Standard Operating Procedures and controls are reviewed by Management. These systems and controls are audited by Internal Auditors and their findings and recommendations are reviewed by the Audit Committee and the IT Strategy Committee of the Board of Directors which ensures the implementation.

Your Company's Internal Financial Controls were deployed through Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), that addresses material risks in your Company's operations and financial reporting objectives. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by The Institute of Chartered Accountants of India. The risk control matrices are reviewed on a yearly basis and control measures are tested and documented on a quarterly basis. The Company has during the year enhanced its IT systems making the ICFR process completely digital which has further enabled to strengthen its review and monitoring controls. Based on the results of such assessments carried out by Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.

Your Company recognises that Internal Financial Controls cannot provide absolute assurance of achieving financial, operational and compliance reporting objectives because of

 

its inherent limitations. Also, projections of any evaluation of the Internal Financial Controls to future periods are subject to the risk that the Internal Financial Control may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.

COMPLIANCE WITH THE PROVISIONS OF SECRETARIAL STANDARD - 1 AND SECRETARIAL STANDARD - 2

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

The applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to 'Meetings of the Board of Directors' and 'General Meetings', respectively, have been duly complied with, by your Company.

POLICIES

The details of the Key Policies adopted by the Company are mentioned at “Annexure VII” to the Board's Report.

GENERAL DISCLOSURE

During the year, the Company, in the capacity of a Financial Creditor, has filed two petitions before the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 for recovery of outstanding loans against its customers, being Corporate Debtors.

There was no instance of one-time settlement with any Bank or Financial Institution during the year under review.

PARTICULARS OF REMUNERATION AND RELATED DISCLOSURES

Disclosures with respect to the remuneration of Directors, Key Managerial Personnel and Employees as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are as under:

 

Sr. Disclosure Requirement	Â	Disclosure Details	Â	Â
No.	Name of Director/ KMP	Designation	Ratio of the remuneration of each Director to median remuneration of employees	% increase in Remuneration
1. Ratio of the remuneration of	Dr. Anish Shah*	Non-Executive Chairman (w.e.f. 2nd April, 2021)	N.A.	N.A.
each Director to the median remuneration of the employees of the Company for the Financial	Mr. Dhananjay Mungale** (Former Chairman)	Independent Director	15.96X	13.74
	Mr. C. B. Bhave	Independent Director	13.36X	21.04
	Ms. Rama Bijapurkar	Independent Director	12.39X	17.63
Year 2020-21 & Percentage increase in Remuneration of	Mr. Milind Sarwate	Independent Director	13.71X	25.08
	Mr. Arvind V. SondeA	Independent Director	11.25X	296.73
each Director, Chief	Dr. Rebecca Nugent#	Independent Director	1.02X	N.A.
Financial Officer and Company Secretary during the Financial Year 2020-21	Mr. V. S. Parthasarathy##	Non-Executive Non-Independent Director	N.A.	N.A.
	Mr. Ramesh Iyer	Vice-Chairman & Managing Director	254.06X	8.45
Â	Mr. Amit Raje$	Whole-time Director - Chief Operating Officer Digital Finance -Digital Business Unit	N.A.	N.A.
Â	Mr. V. Ravi$$	Former Executive Director & Chief Financial Officer	129.29X	7.26
Â	Mr. Vivek Karve@	Chief Financial Officer of the Company and Group Financial Services Sector	Â	N.A.
Â	Ms. Arnavaz M. Pardiwalla	Company Secretary & Compliance Officer	-	-13.47

 

* Dr. Anish Shah, Non-Executive Chairman, being in the whole-time employment of Mahindra & Mahindra Limited ('M&M’), the Holding Company, draws remuneration from it and does not receive any remuneration from the Company.

** Resigned as Chairman of the Board of Directors of the Company w.e.f. close of business hours on 1^st April, 2021. Mr. Mungale continues to be an Independent Director of the Company.

^A Resigned as an Independent Director of the Company with effect from 15^th March, 2021.

#    Appointed as an Independent Director of the Company with effect from 5^th March, 2021.

## Resigned as Non-Executive Non-Independent Director of the Company with effect from 18^th September, 2020. Mr. V. S. Parthasarathy being in the whole-time employment of M&M, did not receive any remuneration from the Company during the year.

$ Appointed as Non-Executive Non-Independent Director of the Company with effect from 18^th September, 2020. During F.Y. 202021, Mr. Amit Raje being in the whole-time employment of M&M, did not receive any remuneration from the Company.

Mr. Amit Raje has been appointed as a Whole-time Director of the Company, designated as Chief Operating Officer Digital Finance -Digital Business Unit with effect from 1^st April, 2021.

$$ Ceased to hold office as Executive Director & Chief Financial Officer of the Company with effect from 25^th July, 2020.

@ Appointed as Chief Financial Officer of the Company and Group Financial Services Sector with effect from 14^th September, 2020.

 

2. Percentage increase in the median Remuneration of employees in the Financial Year 2020-21:	There is no increase in the median remuneration of employees. There is a decrease of 16.09% in the median remuneration of employees, taking into consideration employees who were in employment for the whole of the Financial Year 2020-21 and Financial Year 2019-20.
3. Number of Permanent employees on the rolls of the Company as on 31st March, 2021:	19,952

 

4. Average percentile increase already made in the salaries of employees other than the Managerial Personnel in the last Financial Year i.e. 2020-21 and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:	For employees other than Managerial Personnel who were in employment for the whole of the Financial Year 2019-20 and Financial Year 2020-21, there is no increase in the average percentile. There is an average decrease of 15.86% for Financial Year 202021 for employees other than Managerial Personnel whereas the increase in the managerial remuneration for Financial Year 2020-21 is 8.45%.
Â	Justification:
Â	In view of the outbreak of COVID-19 pandemic, no increments were given to the employees and the Managerial Personnel during FY 2020-21.
Â	There is an increase in the remuneration of Managerial Personnel, mainly due to exercise of the ESOPs in FY 2020-21.
Â	The remuneration of the Vice-Chairman & Managing Director is decided based on the individual performance, inflation, prevailing industry trends and benchmarks.
Â	The remuneration of eligible Non-Executive Directors consists of commission and sitting fees. While deciding the remuneration, various factors such as Director's participation in Board and Committee Meetings during the year, other responsibilities undertaken, such as Membership or Chairmanship/ Chairpersonship of Committees, and such other factors as the Nomination and Remuneration Committee may deem fit etc., were taken into consideration.
5. Affirmation that the remuneration is as per the Remuneration Policy of the Company:	The remuneration paid/payable is as per the Policy on Remuneration of Directors and Remuneration Policy for Key Managerial Personnel and Employees of the Company.

Notes:

1]    The remuneration calculated is as per Section 2[78] of the Companies Act, 2013 and includes the perquisite value of Stock Options of the Company exercised during the year.

2]    The calculations are based on Employees who were on the rolls of the Company for the whole of the Financial Year 2019-20 and Financial Year 2020-21.

3]    On the recommendation of the Nomination and Remuneration Committee, the Board at its Meeting held on 28^th January, 2021 has increased the commission and sitting fees payable to the Independent Directors for attending the Board/Committee Meetings. This is commensurate with the increased responsibilities, contribution and time devoted by Independent Directors on various matters pertaining to the Company.

Mr. Ramesh Iyer, Vice-Chairman & Managing Director of the Company does not receive any remuneration or commission from its Holding Company.

Mr. Ramesh Iyer does not receive any commission from any of the subsidiaries of the Company. During the year under review, Mr. Ramesh Iyer has received remuneration from Mahindra Insurance Brokers Limited, the Company's Subsidiary in the form of Employees' Phantom Stock Options amounting to Rs. 88,51,570.

Mr. Ramesh Iyer has not exercised ESOPs of Mahindra Rural Housing Finance Limited, a subsidiary company, during the year, which were granted in the earlier year[s].

 

The Company had 23 employees who were in receipt of remuneration of not less than Rs. 1,02,00,000 during the year ended 31^st March, 2021 or not less than Rs. 8,50,000 per month during any part of the year.

Details of employee remuneration as required under provisions of Section 197 [12] of the Companies Act, 2013 read with Rule 5 [2] and 5 [3] of Companies [Appointment and Remuneration of Managerial Personnel] Rules, 2014 are available on your Company's website and can be accessed at the web-link: https://www.mahindrafinance. com/investor-zone/financial-information.

Any Member interested in obtaining a copy of the same may write to the Company Secretary at the investor Email Id: [e-mail].

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company is an equal opportunity employer and is committed to ensuring that the work environment at all its locations is conducive to fair, safe and harmonious relations between employees. It strongly believes in upholding the dignity of all its employees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictly prohibited.

The Company has in place a detailed Policy in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, ('POSH Act') and Rules made thereunder, to prevent sexual harassment of its employees.

All employees (permanent, contractual, temporary and trainees) are covered under this Policy. The Policy has been widely communicated internally and is placed on the Company's intranet portal. The Company ensures that no employee is disadvantaged by way of gender discrimination.

The POSH Policy is also available on the website of the Company and can be accessed at the web-link: https://www.mahindrafinance.com/investor-zone/ corporate-governance.

The Company has complied with the provisions relating to the constitution of the Internal Complaints Committee (ICC) under the POSH Act to redress complaints received regarding sexual harassment.

To ensure that all the employees are sensitised regarding issues of sexual harassment, the Company conducts an online Induction Training through the learning platform M-Drona covering topics on POSH awareness, reconciliation before filing POSH complaint(s) and consequences of filing false complaint(s).

The following is a summary of Sexual Harassment complaint(s) received and disposed off during the year 202021, pursuant to the POSH Act and Rules framed thereunder:

a)    Number of complaint(s) of Sexual Harassment received during the year: 2

b)    Number of complaint(s) disposed off during the year: 2

c)    Number of cases pending for more than 90 days: Nil

d)    Number of workshops/awareness programme against sexual harassment carried out:

•    Awareness program was conducted in which mailers and video on Prevention of Sexual Harassment at the work place along with the detailed POSH Policy was circulated to sensitise employees to uphold the dignity of their female colleagues at the workplace.

•    Online training program on “Sexual Harassment while Working from Home” and best practices at work for handling sexual harassment cases was organised for Members of the Internal Complaints Committee.

•    A program was conducted online for all women employees, to enhance awareness regarding the Company's POSH Policy.

•    Awareness program was conducted under the “Speak-up” campaign for the employees, in which awareness creating emails and wall papers on laptop/computer screens of all employees, were circulated, covering topics such as applicability of POSH Act to virtual office, raising a complaint under the POSH Act, etc.

e) Nature of action taken by the employer or District

Officer: Warning letter was issued to both the

respondents.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under sub-section (3) (m) of Section 134 of the Companies Act, 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014 are given as under :

(A) Conservation of Energy

(i) The steps taken or impact on conservation of energy:

The operations of your Company are not energy intensive. However, adequate measures have been initiated to reduce energy consumption.

Select few steps are listed:

a) Replacement of conventional lighting with Light Emitting Diode (LED) lighting:

The Company has installed LED lighting in Regional Offices of the Company during the

year under review and the same has been monitored in terms of electrical consumption and expenses. The Company extensively monitors its energy consumption and GHG emissions. Conservation of energy covers use of LED lights in new branches and retrofication to LED lights in Regional Offices.

b)    Replacement of old air-conditioning with updated version of machines with R-410A gas, which helps in reducing Ozone depletion. Your Company has taken the initiative to use environment friendly gas in Air Conditioners during the year.

c)    Reduction in water and energy consumption and recycling of waste paper generation at various locations.

During the year, the Company has sent 2,131 kgs. of waste generated at the Head Office for responsible disposal and recycling. In return it has received 11,195 Swachh Bharat Points which can be redeemed for environmentally friendly office stationary items from the vendor partner. Similarly, waste generation and recycling has been done at the Record Management Company for 2,896 boxes weighing total 16,500 kgs.

[ii]    The steps taken by the Company for utilising alternate sources of energy: Nil.

[iii]    The capital investment on energy conservation equipment: Nil.

(B) Technology Absorption

[i]    The efforts made towards technology absorption: Not Applicable.

(ii)    The benefits derived like product improvement, cost reduction, product development or import substitution: Not Applicable.

(iii)    In case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year): Not Applicable.

(a)    Details of Technology Imported;

(b)    Year of Import;

(c)    Whether the Technology has been fully absorbed;

(d)    if not fully absorbed, areas where absorption has not taken place, and the reasons thereof.

(iv)    Your Company has not incurred any expenditure on Research and Development during the year under review.

(C) Foreign Exchange Earnings and Outgo

Foreign Exchange earnings and outgo during the year under review are as follows:

Rs. in Crores

Total Foreign Exchange; Eam^ed and _For the Financial For the Financial ^Outgo    Year ended 31st Year ended 31st

March, 2021    March, 2020

Foreign Exchange Earnings    NIL    NIL

Foreign Exchange Outgo    16.14    20.14

For and    on behalf of the Board

Dr.    Anish Shah

Chairman

Place : Mumbai Date : 23^rd April, 2021

---

Mar 31, 2021

The Directors are pleased to present their Thirty-First Report together with the Audited Financial Statements of your Company for the Financial Year ended 31^st March, 2021.

The performance highlights and summarised financial results of the Company are given below:

PERFORMANCE HIGHLIGHTS

Consolidated income for the year increased by 1.5% to Rs. 12,170.5 Crores as compared to Rs. 11,996.5 Crores in 2019-20;

Consolidated income from operations for the year was Rs. 12,050.3 Crores as compared to Rs. 11,883.0 Crores in 2019-20, a growth of 1.4%;

Consolidated profit before tax for the year was Rs. 934.1 Crores as compared to Rs. 1,602.0 Crores in 2019-20;

Consolidated profit after tax and non-controlling interest for the year was Rs. 773.2 Crores as compared to Rs. 1,075.1 Crores in 2019-20.

FINANCIAL RESULTS

Â	CONSOLIDATED March 2021 March 2020		Rs. in Crores STANDALONE March 2021 March 2020
Total Income	12,170.5	11,996.5	10,516.8	10,245.1
Less: Finance Costs	5,307.6	5,390.6	4,733.2	4,828.8
Expenditure	6,046.4	4,902.9	5,241.4	3,954.3
Depreciation, Amortization and Impairment	150.5	146.9	125.9	118.3
Total Expenses	11,504.4	10,440.3	10,100.5	8,901.4
Profit before exceptional items and taxes	666.1	1,556.1	416.3	1,343.8
Share of Profit of Associates & Joint Ventures	39.5	45.9	-	-
Exceptional items	228.5	-	6.1	-
Profit Before Tax	934.1	1,602.0	422.4	1,343.8
Less: Provision for Tax
Current Tax	512.3	647.3	450.3	556.9
Deferred Tax	(340.9)	(129.9)	(347.5)	(119.6)
(Excess) / Short provision for Income Tax - earlier years	(17.6)	(1.2)	(15.5)	-
Profit After Tax for the Year	780.3	1,085.8	335.2	906.4
Less: Profit for the year attributable to Non-Controlling	7.1	10.7	Â	Â
interests	Â	Â	Â	Â
Profit for the year attributable to Owners of the Company	773.2	1,075.2	335.2	906.4
Balance of profit brought forward from earlier years	4,578.0	3,957.3	4,293.6	3,834.0
Add: Other Comprehensive Income/(Loss)	(18)	(14.7)	(2.4)	(11.3)
Add: Transfer from Debenture Redemption Reserve	-	223.7	-	223.7
Balance available for appropriation	5,349.4	5,241.4	4,626.4	4,952.8
Less: Appropriations
Dividend paid on Equity Shares (including tax thereon)	-	484.2	-	477.9
Transfer to Statutory Reserves	98.8	222.8	68.0	181.3
Add/Less: Other Adjustments:
Gross obligation at fair value to acquire non-controlling	35.4	43.6	Â	Â
interest	Â	Â	Â	Â
Changes in Group's Interest	(10)	-	-	-
Balance profit carried forward to balance sheet	5,285.0	4,578.0	4,558.4	4,293.6

TRANSFER TO RESERVES

The Company proposes to transfer an amount of Rs. 68.0 Crores to the Statutory Reserve. Further, the Board of your Company decided not to transfer any amount to the General Reserve for the year under review. An amount of Rs. 4,558.4 Crores is proposed to be retained in the Statement of Profit and Loss.

DIVIDEND

Your Directors are pleased to recommend a dividend of Re. 0.80 per Equity Share of the face value of Rs. 2 each, payable to those Members whose names appear in the Register of Members as on the Book Closure date. Dividend is subject to approval of Members at the ensuing Annual General Meeting and shall be subject to deduction of tax at source.

The Equity dividend outgo for the Financial Year 2020-21 would absorb a sum of Rs. 98.8 Crores.

The dividend pay-out is in accordance with the Company's Dividend Distribution Policy.

DIVIDEND DISTRIBUTION POLICY

The Dividend Distribution Policy, containing the requirements prescribed in Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is appended as “Annexure I” and forms part of this Annual Report.

The Dividend Distribution Policy can also be accessed on the Company's website at the web-link: https:// mahindrafinance.com/discover-mahindra-finance/ policies.

During the year, an amount of Rs. 7,13,234 being the unclaimed/unpaid dividend of the Company for the Financial Year ended 31^st March, 2013 was transferred in September, 2020 to the Investor Education and Protection Fund Authority.

OPERATIONS

The year under review has been one of the most challenging years both for your Company and its customers. The COVID-19 pandemic outbreak which began in the middle of March 2020 continued to impact the economy throughout the financial year 2020-21. The year was full of uncertainties with slowdown in activities on the ground. The world was introduced to the new normal of lockdowns, containment zones, work from home with restricted movements of people and goods. The nationwide transport system came to a grinding halt as Air, Train and Road travel got severely impacted. This was a never seen before situation which

brought the economic activities in the country to a virtual standstill. The impact of the pandemic led to closure of almost all the Company's offices, business and recovery touch points and completely stalled the field operations from the last week of March 2020. Operations gradually resumed in mid-May in offices pan-India. Your Company has been strictly adhering to lockdown announcements in accordance with the directives issued by the Central, State Government and Local Administration.

Your Company is primarily in the financing of Automobiles and Tractors and addresses customers who use these vehicles for earning their livelihood. Your Company remains a significant financier to its customers in semi-urban and rural geographies by providing a wide range of easy and affordable products and services designed to suit their cashflow cycles. Your Company expanded vide its channel connect with leading car dealers. Your Company has retained its leadership position in financing the Mahindra range of vehicles and tractors in addition to extending its lending to vehicles of other leading Auto Original Equipment Manufacturers (OEMs). Your Company has aggressively pursued financing of pre-owned vehicles and used tractors. The demand for both new and used automobiles for the second consecutive year saw a substantial dip due to subdued load factors, and supply side constraints leading to poor sentiments and thus a much lower demand. The overall business volumes continued to be low for the Company on the backdrop of certain segments like Taxi, school bus/ van, traders, tourist operators, contracting segments, sand & stone mining applications, etc., opting to refrain from purchasing new vehicles. This further led to overall lower disbursements by your Company. Simultaneously, the earnings of the customers covered in the above mentioned segments were severely impacted due to slowdown of the economy. Hence, the collections were also subdued during most parts of the year. The Regulator did provide timely moratorium which gave support to our customers by allowing them to defer the EMI's by a period of 6 months. A significant majority of our customers availed the benefit under this moratorium scheme. Your Company continued to partner with the customers during these difficult times and offered moratorium to all eligible customers. The agricultural sector was relatively less impacted as monsoons, water levels, yields, support prices were above average and hence resulted in decent farm based cashflows. The second half of the year witnessed some amount of normalcy returning to the market with unlocking of the country. This led to better collection efficiencies starting December 2020. The Government supported Emergency Credit Line Guarantee Scheme (ECLGS) was offered to all eligible customers in the second half of the fiscal to mitigate the difficulties of vehicle users in commercial applications. A few of your Company's

customers took benefit of this scheme to lubricate their working capital.

The Business model got stress-tested for an elongated period of extreme uncertainty on an all-India basis. The flexibility and the elasticity of the model is demonstrated by the return of near normal disbursements and high collection efficiencies in the fourth quarter, as the pandemic started easing out.

Building Blocks for Growth, Efficiency, Customer Experience

A.    Deeper Physical Reach

Your Company has an extensive pan-India distribution network with 1,388 offices spanning across 27 States and 7 Union Territories as of 31^st March, 2021. During the year under review, your Company enhanced its footprint into deeper rural pockets by adding another 156 new branches in its network towards the year-end. Your Company's widespread office network reduces its reliance on any one region in the country. The geographic diversification also mitigates some of the regional, climatic, and cyclical risks, such as heavy monsoons or droughts. In addition, the Company's extensive office network benefits from a decentralized approval system, which allows each office to grow its business organically as well as leverage its customer relationships by offering multiple financial products including distribution of insurance products and mutual funds. Your Company services multiple products through each of its offices, which reduces operating costs and improves total sales. Your Company believes that the challenges inherent in developing an effective office network in rural and semiurban areas have also created opportunities of catering to the diverse financial requirements of its customers by identifying and understanding the needs and aspirations of the people.

B.    Enhancing Digital Reach

Your Company has an enhanced on-line and in-mobile presence to provide a superior digital experience to its customers. Employees, customers and partners are being enabled digitally for all their needs and substantial progress has been made in this direction. Today, the entire lending process is digitally enabled, which has facilitated the EMI collections being received through Digital and on-line means. This year also saw that the challenge posed by the pandemic for collections was to an extent mitigated when customers extensively used our online and App based Digital Channels for making their monthly repayments. In the last quarter of the

fiscal, the total amount collected from the customers by digital means had gone up by 94% compared to the last quarter of the previous year. Your Company and its subsidiaries have embraced digital in performing different activities like customer acquisition, digitally enabled collections, offering Fixed Deposits, Mutual Funds and Insurance products.

C.    Leveraging Technology

Information Technology has enabled the automation and digitisation of processes across the organisation, empowering employees with the workflows and knowledge for efficiency and controls, and engendering newer business products, analytical models, and decision-making tools. The Company's digital channels of multi-lingual website, mobile app, and contact centre too are increasingly popular with the customers. Your Company has successfully leveraged enterprise technology platforms such as enterprise service bus, customer relationship management, mobile application management, data lake and business intelligence. It is at an advanced stage in upgrading its Loan Origination System and Loan Management System capabilities to meet the future growth requirements and to be able to seamlessly service its large customer base and partners in the rural and semi-urban geographies.

D.    Data as Competitive Advantage

Your Company's presence in the rural and semi-urban markets for more than 25 years, working with several profiles gives your Company a huge advantage, in applying Analytics and Artificial Intelligence (AI) on the data leading to customized personalized offerings that are designed and delivered with speed and lower risks. Your Company has launched its proprietary algorithms to offer faster loan approvals at dynamic interest rates to low risk customers which would help in gaining market share, improving portfolio quality and profitability. Customer acquisition, retention, cross selling, and collections will be substantially enhanced with the combined Integrated activation of Digital, Analytics and Technology.

E.    Growth Drivers for Future

Your Company is having several plans to expand its offerings to its customers for growth. Pre-owned Vehicles, used tractors and commercial vehicles have a large opportunity for growing within the vehicle segments while growing the market share for the Company's existing range of products.

Meeting the Non-vehicle Financial needs of customers in the rural and semi-urban regions is another area of opportunity. Products like Personal Loans, Consumer Loans, Farm Related Working Capital Loans, etc., will have a growth focus targeting our large existing customer bases as well as new customers. For this purpose, the Company has formed a strategic business unit (SBU) for its Fintech vertical which will focus on digital lending.

Leasing as a method of Specialized Financing of certain customer segments for both vehicle and beyond is also being set up. Leasing offers an emerging opportunity and will aid in expanding the Financing portfolio in the medium and long term.

SME Lending

The SME lending faced significant head winds during the year due to weak economic environment and slowdown in the auto segment. The COVID-19 pandemic resulted in disruptions across businesses and SMEs also underwent significant stress. As a matter of abundant caution, your Company curtailed disbursements in significantly stressed sectors and supported deserving clients with good track record. Consequently, the Assets Under Management as of March 2021 has de-grown by 34% in comparison to March 2020. Further, your Company focused on strengthening its systems to reduce risk and enhance customer centricity. Your Company also strengthened its product offerings and broadened its tie-ups with more OEMs. It is expected that with these measures your Company would be able to grow its book significantly once the economic activity picks up.

The total value of assets financed stood at Rs. 25,248.9 Crores as compared to Rs. 42,388.2 Crores in the previous year. Total Income grew by 2.7% at Rs. 10,516.8 Crores for the year ended 31^st March, 2021 as compared to Rs. 10,245.1 Crores for the previous year. Profit Before Tax (PBT) declined by 68.6% at Rs. 422.4 Crores as compared to Rs. 1,343.8 Crores for the previous year. Profit After Tax (PAT) declined by 63.0% at Rs. 335.2 Crores as compared to Rs. 906.4 Crores in the previous year. During the year under review, the Assets Under Management stood at Rs. 81,689 Crores as at 31^st March, 2021 as against Rs. 77,160 Crores as at 31^st March, 2020, a growth of 5.9%.

Despite the most difficult times the Gross Stage 3 loan assets stood at an absolute level of Rs. 5,786 Crores, almost the same as that on 31^st March, 2020 (Rs. 5,747 Crores). This was a resilient performance given the backdrop of tough macro conditions and severe logistical issues. However, as the disbursements slowed down in the aftermath of COVID-19 outbreak, the Gross Non-Performing Assets were at 9.0% of closing loan assets as on 31^st March,

2021, a tad higher against 8.4% as on 31^st March, 2020. The Company continued to reassess its credit exposures and made additional ECL overlay even during the year, which stood at Rs. 996 Crores as on 31^st March, 2021 as against Rs. 574 Crores as on 31^st March, 2020. Further, in accordance with the regulatory expectation of the Reserve Bank of India to bring down the Net Non-Performing Asset (NPA) ratio below 4%, the Company recorded an additional provision of Rs. 1,320 Crores during the fourth quarter on Stage 3 loans. Resultantly, the Net NPA ratio of the Company stood at 3.97% as at 31^st March, 2021 as against 5.98% as on 31^st March, 2020. The Stage 3 provisioning coverage ratio stood at 579% as compared to 31% in the previous year.

There has been no change in the nature of business of the Company during the year under review.

FINANCIAL PRODUCTS DISTRIBUTION

During the year under review, your Company has initiated activities to increase the sale of Third Party Products to its customers and increased the fee income of the Company. As a green initiative measure and for the convenience of its investors, your Company has recently launched an Investment portal to enable them to transact in Mutual Funds as well as Fixed Deposits of the Company. The portal is available on the website of the Company under the Investment tab. With the launch of this Investment Solutions portal, your Company aims to increase the sales of third party investment products via the digital route along with other channels such as its branch network and a dedicated team to sell these products to its clients.

The Company's Assets under Management for distribution of Mutual Fund Products (MFP) as on 31^st March, 2021 stood at Rs. 2,900 Crores, which grew 109% as compared to the AUM as on 31^st March, 2020. Further, sales of other Third Party Products such as mutual funds, insurance, bonds & debentures, etc., grew from Rs. 309 Crores in FY 2019-20 to Rs. 482 Crores in FY 2020-21, recording a growth of 56% over the corresponding period in the previous year. Your Company has also implemented a customer service process as well as a process for evaluation and recommendation of Mutual Fund schemes. All these initiatives will lead to an increase in fee based income in the coming years.

MORATORIUM OF LOANS

As mentioned in the previous Annual Report and in accordance with the Board approved Moratorium Policy read with the Reserve Bank of India ('RBI') guidelines dated 27^th March, 2020, 17^th April, 2020 and 23^rd May, 2020 relating to 'COVID-19 - Regulatory Package', your Company has granted moratorium up to six months on the payment of installments which became due between 1^st March,

2020 and 31^st August, 2020 to all eligible borrowers. This relaxation did not automatically trigger a significant increase in credit risk. During the year under review, 81% of the customers have availed of the moratorium facility offered by the Company.

The Government of India, Ministry of Finance, vide its notification dated 23^rd October, 2020, had announced COVID-19 Relief Scheme ('the Scheme') for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts as per the eligibility criteria and other aspects specified therein and irrespective of whether the RBI moratorium was availed or not. Accordingly, your Company has credited an ex-gratia amount of Rs. 110.27 Crores in the accounts of the eligible borrowers. The Company filed a claim with the State Bank of India for reimbursement of the said ex-gratia amount as specified in the notification and has received an amount of Rs. 109.28 Crores towards the same on 31^st March, 2021.

Further, in connection with the judgment of the Hon'ble Supreme Court of India in the matter of Small Scale Industrial Manufacturers Association vs LIOI & Ors. and other connected matters dated 23^rd March, 2021 and as advised by RBI vide its Circular No. RBI/2021-22/17 DOR. STR.REC.4/21.04.048/2021-22 dated 7^th April, 2021, and the Indian Banks' Association ('IBA') advisory letter dated 19^th April, 2021, your Company has put in place a Board approved Policy to refund/ adjust the 'interest on interest' charged to the borrowers, not covered under the Ex-gratia Scheme, for the moratorium period i.e. 1^st March, 2020 to 31^st August, 2020. The Company has made an estimated provision of Rs. 31.75 Crores as on 31^st March, 2021 towards this.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with the applicable provisions of the Master Direction issued by the Reserve Bank of India and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a detailed analysis of the Company's performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

CORPORATE GOVERNANCE

Your Company practices a culture that is built on core values and ethical governance practices. Your Company is committed to transparency in all its dealings and places high emphasis on business ethics.

In accordance with the applicable provisions of the Master Direction issued by the Reserve Bank of India and the

Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance along with a Certificate from Messrs. KSR & Co., Company Secretaries LLP regarding compliance with the conditions of Corporate Governance as stipulated in Regulations 17 to 27, clauses (b) to (i) of sub-regulation (2) of Regulation 46 and paragraphs C, D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of the Annual Report.

SHARE CAPITAL

The Members at their Extraordinary General Meeting held on 30^th June, 2020, have approved the increase in the Authorised Share Capital of the Company from Rs. 190,00,00,000 (Rupees One Hundred Ninety Crores) divided into 70,00,00,000 (Seventy Crores) Equity Shares of Rs. 2 (Rupees Two) each of the Company and 50,00,000 (Fifty Lakhs) Redeemable Preference Shares of Rs. 100 (Rupees Hundred) each of the Company to Rs. 550,00,00,000 (Rupees Five Hundred Fifty Crores) divided into 250,00,00,000 (Two Hundred Fifty Crores) Equity Shares of Rs. 2 (Rupees Two) each of the Company and 50,00,000 (Fifty Lakhs) Redeemable Preference Shares of Rs. 100 (Rupees Hundred) each of the Company by creation of additional 180,00,00,000 (One Hundred Eighty Crores) Equity Shares of Rs. 2 (Rupees Two) each.

Rights Issue of Equity Shares

During the year under review, your Company has allotted

61.77.64.960    Equity Shares of the face value of Rs. 2 each for cash at a price of Rs. 50 per Equity Share (including premium of Rs. 48 per Share) in the ratio of 1 (one) Rights Equity Share for every 1 (one) fully paid-up Equity Share of the Company, held by the eligible Equity Shareholders on the Record Date i.e. 23^rd July, 2020. The Issue opened on 28^th July, 2020, and closed on 11^th August, 2020. The Rights offering by your Company received a very satisfactory response, as seen by the high levels of subscription and strong participation from Shareholders and investors, and was over-subscribed approximately by 1.3 times of the Issue Size. The Company received the approval from Stock Exchanges for listing on 19^th August, 2020 and trading of Rights Equity Shares on 20^th August, 2020.

The proceeds from the Rights Issue have been fully utilised for the objects of the Rights Issue as mentioned in the Letter of Offer filed with the Securities and Exchange Board of India.

Consequently, pursuant to the allotment of Rights Shares on 17^th August, 2020, the issued, subscribed and paid-up Equity Share Capital of the Company stands increased from

61.77.64.960    Equity Shares to 123,55,29,920 Equity Shares of the face value of Rs.2 each, fully paid-up.

 

2020, an improvement of 1.1 percent over the previous prediction in October 2020. The silver lining remains the development and growing coverage of the vaccines which is lifting the sentiment.

The progress of the virus has been slowed with the help of social distancing, increase in availability of vaccines and treatment protocols. However, the health infrastructure of many countries is reeling under the pressure of second and third wave. New restrictions are introduced in countries facing such challenges indicating the recovery to be uneven and still in some distance.

Outlook

The global growth projected is at 6.0 percent in 2021, which thereafter moderates to 4.4 percent in 2022. A lot of this shall depend upon the path of health crisis and the coordinated policy actions taken to limit economic damage. The growth for advanced economies is projected at 5.1 percent in 2021 [vis-a-vis de-growth of -4.7% in 2020] compared to a growth of 6.7 percent in 2021 for emerging and developing economies [vis-a-vis de-growth of -2.2% in 2020].

With varied outlook for different countries, the macro policy objectives still remain as the need to overcome the existing health crisis and returning employment to normal levels. The expectation based on availability of vaccines suggest local transmission to reduce everywhere by end of 2022.

Domestic Economy

The scenario in the Indian economy is much like many other countries where a gradual improvement in macro indicators has been seen. The positives include the resilience demonstrated in rural demand which remained buoyant and had record agriculture production in FY 2020-21. Urban demand has gained strength on the backdrop of normalization of business activity.

The anticipated improvement in economic activity is however held back with new mutations resulting in renewed jump in COVID-19 cases. Associated local lockdowns, which are now prevalent in many States, shall dampen demand for contact intensive services, restrain growth and prolong the return to normalcy. The silver lining remains the expectation of normal monsoon in the current year.

RBI projects the real GDP growth for FY 2021-22 to be at 10.5 percent. These growth expectations may undergo a change as the decisions on lockdowns have increased across States with the number of cases in the second wave now surpassing the numbers during those seen in the previous peak.

[Source: IMF, RBI]

 

The issued, subscribed and paid-up Equity Share Capital as on 31^st March, 2021 was Rs. 247.11 Crores, comprising 123,55,29,920 Equity Shares of the face value of Rs. 2 each, fully paid-up.

During the year, the Company has not issued any sweat equity shares or equity shares with differential voting rights.

As on 31^st March, 2021, none of the Directors of the Company holds instruments convertible into Equity Shares of the Company.

STOCK OPTIONS

During the year under review, no Options were granted to Eligible Employees under the Mahindra & Mahindra Financial Services Limited Employees' Stock Option Scheme-2010 [“2010 Scheme”]. The Company does not have any scheme to fund its employees to purchase the shares of the Company. No employee has been issued stock options during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant.

The 2010 Scheme of the Company is in compliance with the Securities and Exchange Board of India [Share Based Employee Benefits] Regulations, 2014 [“SBEB Regulations”] and there were no material changes made to the said Scheme. A Certificate from Messrs. B S R & Co. LLP, Chartered Accountants, Statutory Auditors of the Company, pursuant to Regulation 13 of the SBEB Regulations would be available for inspection by the Members through electronic mode.

Voting rights on the Shares issued to employees under the aforesaid Scheme are either exercised by them directly or through their appointed proxy.

The details of the Employees' Stock Options and the Company's Employees' Stock Option Trust as required under the SBEB Regulations read with SEBI Circular CIR/CFD/ POLICY CELL/2/2015 dated 16^th June, 2015 have been uploaded on the Company's website and can be accessed at the web-link: https://mahindrafinance.com/investor-zone/financial-information.

ECONOMY

Global and Domestic Growth

With completion of one year of the pandemic, the work lying before administrations to provide health care and vaccines continues to remain daunting. The human toll and loss of economic activity caused by the pandemic is unprecedented which could have been much worse, but for the timely intervention and policy support provided across administrations. The global economic activity is estimated to have contracted by -3.3 percent in Calendar Year [CY]

Finance

During the first eight months of the year under review (Apr-Nov 2020), Retail price inflation continued to be higher than the RBI's upper margin of 6%. It fell sharply in November 2020 with food inflation coming down and has since moved up again but within the RBI's upper margin. Having reduced policy repo rate in the first quarter of FY 2021 from 4.40% to 4.00%, the RBI since then, has maintained status quo in the key policy rates, along with continuing an accommodative stance until necessary to sustain growth on a durable basis.

The Government of India and the Reserve Bank of India have taken a series of actions during the year which has assisted the financial sector including the NBFC industry to wither the pandemic storm. These included, amongst others, reducing the benchmark rates, announcing moratorium for six months, restructuring scheme for a set of eligible borrowers and long-term repo operations to make easier access to liquidity. These actions led to stabilization of the financial sector with significant liquidity buffers being maintained across companies.

At the start of the fiscal year [April 2020), 10-year G-Sec benchmark yields (6.45% GS 2029), was trading at 6.14% levels. The new benchmark (5.85% GS 2030) closed the year at 6.18%. The yields during the year remained range bound as policy actions aimed at ensuring steady supply of funds. During the year, the INR appreciated by 2.5 percent from INR 75.39 to INR 73.50 per USD after a sharp depreciation of 9.0 percent during the previous year.

Your Company has been identified as a “Large Corporate” under the framework provided by the Securities and Exchange Board of India and accordingly, has ensured that more than 25% of its incremental borrowings during the year was by way of issuance of Debt securities.

During the year under review, your Company continued with its diverse methods of sourcing funds in addition to regular borrowings like Secured and Unsecured Debentures, Term Loans, Fixed Deposits, Commercial Papers, etc., and maintained prudential Asset Liability match throughout the year. Your Company sourced long-term debentures and loans from banks and other institutions at attractive rates. Your Company continues to expand its borrowing profile by tapping into new lenders and geographies.

During the year, your Company has successfully completed 3 securitisation transactions aggregating to Rs.5,120.30 Crores and raised JPY 15 billion (Rs. 1,063.50 Crores) through External Commercial Borrowings.

Private Placement Issues of Non-Convertible Debentures

During the year under review, your Company issued Secured/Unsecured Redeemable Non-Convertible Debentures including Secured Redeemable Principal Protected Non-Convertible Market Linked Debentures (“NCDs”) and raised an amount aggregating to Rs. 4,815.90 Crores on a private placement basis, in various tranches. The NCDs are listed on the debt market segment of the BSE Limited.

Details of all the above-mentioned issues were provided to the Board on a periodic basis.

As specified in the respective offer documents, the funds raised from NCDs were utilised for various financing activities, onward lending, to repay existing indebtedness, working capital and general corporate purposes of the Company. Details of the end-use of funds were furnished to the Audit Committee on a quarterly basis.

The Company is in compliance with the applicable guidelines issued by the Reserve Bank of India, as amended from time to time.

The Company has been regular in making payments of principal and interest on all the NCDs issued by the Company on a private placement basis and through public issue. There are no NCDs which have not been claimed by investors or not paid by the Company after the date on which the NCDs became due for redemption.

Commercial Paper

As at 31^st March, 2021, the Company had Commercial Paper (CPs) with an outstanding amount (face value) of Rs. 500 Crores. CPs constituted 0.8% of the outstanding borrowings as at 31^st March, 2021. The CPs of the Company are listed on the debt market segment of the National Stock Exchange of India Limited.

Rupee Denominated Medium Term Note

Under the Company's Medium Term Note Programme, the Company has not raised any funds through Rupee denominated bonds during the year.

INVESTOR RELATIONS

Your Company has done multiple interactions with Domestic and International investors/analysts during the current year. Given the ongoing pandemic, all such meetings were

done through use of technology i.e. conference calls, videoconferencing. Your Company attended multiple investor meets organised by reputed Global and Domestic Broking Houses during the year, to communicate details of its performance, important regulatory and market developments and exchange of information. Roadshows were held during the year with Domestic and International investors on the backdrop of the Rights Issue undertaken to strengthen the Capital Adequacy. Quarterly and annual earnings calls were scheduled through structured conference calls to keep various stakeholders informed about the past performance and future outlook of the industry, especially those having a bearing on the Company. These interactions with institutional shareholders, fund managers and analysts are based on generally available information that is accessible to the public on a non-discriminatory basis. Your Company uploads the transcript of the quarterly earnings calls on its website which can be accessed by existing and potential investors and lenders. Your Company shall continue to make effective

Your Company believes in transparent communication and building a relationship of mutual understanding and trust. Your Company further ensures that critical information about the Company is available to all the investors by hosting such information on the Company's website.

CAPITAL ADEQUACY

As on 31^st March, 2021, the Capital to Risk Assets Ratio (CRAR) of your Company was 26.0% which is well above the minimum requirement of 15% CRAR prescribed by the Reserve Bank of India.

Out of the above, Tier I capital adequacy ratio stood at 22.2% and Tier II capital adequacy ratio stood at 3.8% respectively.

RBI GUIDELINES

The Company continues to comply with all the applicable regulations prescribed by the Reserve Bank of India (“RBI”), from time to time.

CREDIT RATING

Your Company believes that its credit rating and strong brand equity enables it to borrow funds at competitive rates. The credit rating details of the Company as on 31^st March, 2021 were as follows:

Rating Agency	Type of Instrument	Credit Rating*	Remarks
India Ratings & Research Private Limited	Commercial Paper Programme and Bank Facilities (Fund/Non-Fund Based Working Capital Limit)	IND A1 +	The 'A1'+ rating indicates the Highest Level of Rating. Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
Â	Long-term (incl. MLD) Debt instruments, Subordinated Debt Programme and Bank Facilities (Fund/Non-Fund Based Working Capital Limit)	IND AAA/Stable IND PP-MLD AAA emr/Stable	The 'AAA' ratings denote the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. 'PP-MLD' refers to Principal Protected Market Linked Debentures.
Â	Â	Â	Suffix "emr” denotes the exclusion of the embedded market risk from the rating.
CARE Ratings Limited	Long-term Debt Instruments and Subordinated Debt Programme	CARE AAA/Stable	The 'AAA' ratings denote the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk.
Brickwork Ratings India Private Limited	Long-term Subordinated Debt Programme	BWR AAA/Stable
CRISIL Ratings Limited	Fixed Deposit Programme	CRISIL FAAA/ Stable	Â
Â	Commercial Paper Programme and Bank Loan Facilities	CRISIL A1 +	The 'A1'+ rating indicates the Highest Level of Rating. Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
Â	Long-term Debt Instruments, Subordinated Debt Programme and Bank Loan Facilities	CRISIL AA+/ Stable	The 'AA+' rating indicates a high degree of safety with regard to timely payment of financial obligations. Such instruments carry very low credit risk.

ACHIEVEMENTS

Awards/Recognition received by your Company during the year are enumerated hereunder:

Marketing:

Won the Silver Award in the category of 'New on ground property of the year' at the Rural Marketing Association of India [Flame Awards] for the Gram Pravesh initiatives of the Company.

CSR & Sustainability:

Included in the renowned FTSE4Good Index Series for the second year.

Ranked 48^th amongst Top 100 Indian companies for Sustainability & CSR under Responsible Business Rankings 2020 by Futurescape.

Attained performance band: B in the Carbon Disclosure Project Assessment 2019-20.

Included in 'DJSI Sustainability Yearbook 2021'

Human Resources:

Recognized among “India's Best Workplaces in Career Management 2020” by Great Place to Work® Institute.

FIXED DEPOSITS AND LOANS/ ADVANCES

Your Company offers a wide range of Fixed Deposit schemes that cater to the investment needs of various classes of investors. These Deposits carry attractive interest rates with superior service enabled by robust processes and technology. In order to tap rural and semi-urban savings, your Company continues to expand its network and make its presence felt in the most remote areas of the country.

During the year, CRISIL has reaffirmed a rating of 'CRISIL FAAA/Stable' for your Company's Fixed Deposits. This rating represents the highest degree of safety regarding timely servicing of financial obligations and carries the lowest credit risk. Your Company's Deposits continue to be a preferred investment amongst the investors.

As on 31^st March, 2021, your Company has mobilised funds from Fixed Deposits to the tune of Rs. 9,481.16 Crores, with an investor base of over 1,96,278 investors.

Your Company continues to serve the investors by introducing several customer centric measures on an ongoing basis to further strengthen its processes in sync with the requirements of the Fixed Deposit holders. The

Company periodically communicates various intimations via SMS, e-mails, post, courier, etc., to its investors as well as sends reminder emails to Depositors whose TDS is likely to be deducted before any pay-out/accrual. Your Company also provides a digital platform for online application/renewal of deposits, online generation of TDS certificates from customer/broker portal and seamless investment process for employees.

During the year under review, your Company has rolled out several initiatives aimed at offering a superior customer experience. Some key ones are:

An integrated web portal has been developed to facilitate online application/online renewal of Fixed Deposits, Loan against FDs, profile updates, etc.

Online submission of Forms 15 G/15H by all eligible Depositors through the FD Customer portal is made available on the Company's website.

TDS certificate^] are made available in the Customer portal and Broker portal, in addition to the same being sent to the concerned Depositors, from time to time.

In order to offer various payment options to Depositors, more payment gateways have been added across various FD investment portals.

An advanced version of Customer Relationship Management [CRM] has been launched to record the queries, requests and complaints for future data analysis in order to enhance customer service.

An integrated service portal [E-Sarathi] has been introduced to address the queries of Depositors routed through the Channel Partners on real-time basis during working hours.

The process of recording Central Know Your Customer [CKYC] details of the Depositors has been strengthened by introducing various control measures.

As at 31^st March, 2021, 6,052 Deposits amounting to Rs. 5.41 Crores had matured for payment and remained unclaimed. The unclaimed Deposits have since reduced to 5,882 Deposits amounting to Rs. 5.17 Crores. There has been no default in repayment of Deposits or payment of interest during the year.

Your Company being a Non-Banking Financial Company, the disclosures required as per Rule 8 [5] [v] and [vi] of the Companies [Accounts] Rules, 2014 read with Sections 73 and 74 of the Companies Act, 2013, are not applicable to it.

The information pursuant to Clause 35[1] of Master Direction DNBR.PD.002/ 03.10.119/2016-17 dated 25^th

August, 2016 issued by the Reserve Bank of India on Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016, regarding unpaid/unclaimed public deposits as on 31^st March, 2021, is furnished below:

i.    total number of accounts of Public Deposits of the Company which have not been claimed by the depositors or not paid by the Company after the date on which the deposit became due for repayment: 6,052.

ii.    total amounts due under such accounts remaining unclaimed or unpaid beyond the dates referred to in clause (i) as aforesaid: Rs. 5,41,47,729.

Depositors were intimated regarding the maturity of deposits with a request to either renew or claim their Deposits. Your Company regularly sends letters/reminders via email to all those Fixed Deposit holders whose Deposits have matured as well as to those whose Deposits remain unclaimed. Where the Deposit remains unclaimed, followup action is also initiated through the concerned agent or branch.

Pursuant to Section 125(2) (i) of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('the IEPF Rules') as amended from time to time, matured Deposits remaining unclaimed for a period of seven years from the date they became due for payment are required to be transferred to the Investor Education and Protection Fund (IEPF) Authority established by the Central Government. Further, interest accrued on the matured deposits which remain unclaimed for a period of seven years from the date of payment will also be transferred to the IEPF under Section 125(2) (k). The concerned depositor can claim the Deposit and/or interest from the IEPF Authority by following the procedure laid down in the IEPF Rules.

During the year, an amount of Rs. 011 Crores has been transferred to the IEPF Authority.

During the year under review, the Company has not given any loans and advances in the nature of loans to its subsidiaries or associate(s) or loans and advances in the nature of loans to firms/companies in which Directors are interested.

Accordingly, the disclosure of particulars of loans/advances, etc., as required to be furnished in the Annual Accounts of the Company pursuant to Regulations 34 (3) and 53 (f) read with paragraph A of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable to the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS IN SECURITIES

Pursuant to Section 186(11) of the Companies Act, 2013 (“the Act”), the provisions of Section 186(4) of the Act requiring disclosure in the Financial Statements of the full particulars of the loans made and guarantees given or securities provided by a Non-Banking Financial Company in the ordinary course of its business and the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient of the loan or guarantee or security are exempted from disclosure in the Annual Report.

Further, pursuant to the provisions of Section 186(4) of the Act, the details of investments made by the Company are given in the Notes to the Financial Statements.

SUSTAINABILITY INITIATIVES

Sustainability has been deeply embedded in the Company's business model from the very beginning. At the heart of our organizational strategy is an inclusive business model which enables the residents of semi-urban and rural India to access formal channels of credit/finance, helping them create long-term value. In line with the Mahindra Group's motto: 'Rise for Good' your Company is also gearing up to be future ready by making sustainability and climate change an integral part of the business strategy and risk framework. Your Company has been enabling customers to meet their aspirations through a diversified portfolio of financial product offerings. It helps people build their homes through affordable housing finance solutions provided by Mahindra Rural Housing Finance Limited, secure their life and assets with insurance solutions facilitated by Mahindra Insurance Brokers Limited and offers investment options through its asset management subsidiary Mahindra Manulife Investment Management Private Limited. By providing the right set of opportunities and prospects in the remote areas, your Company has helped customers to forge ahead. The Company lays strong emphasis on customer centricity. Its customer base is spread across more than 3.80 lakh villages in India, with majority of them belonging to the 'Earn and Pay' segment.

Your Company commenced its journey towards reporting sustainability performance in 2008-09 through Mahindra Group's Sustainability Report and in the year 2012-13 the Company released its first standalone Sustainability Report. In FY 2019-20, the Company released its Eighth Sustainability Report with the theme “Positive & Promising”. The Report adheres to the Global Reporting Initiative's (GRI) Standards and is based on the Integrated Reporting framework. The Report is externally assured by KPMG.

The Content index has been checked by GRI and carries the GRI logo. FY 2019-20 was truly a year of building sustainable resilience for the Group Financial Services Sector. The “Positive & Promising” theme of the Report shows that despite a variety of challenges through the year, the Company collectively stayed true to its core purpose and values, helping its customers, teams and communities realize their true potential.

This Report is hosted on the Company's website and can be accessed at: https://mahindrafinance.com/ media/383687/mahindra-finance-sustainability-report-2019-20.pdf.

Your Company continued to focus on integrating Sustainability into the business practices and on building awareness for different stakeholders by taking various initiatives to engage them. In FY 2018-19, your Company became the 1^st Financial Company in India to be committed towards call to action for Science Based Targets.

The Science Based Targets initiative (SBTi) requires companies to publicly commit to setting carbon emission reduction targets that are in line with climate science.

Your Company was recognized for its Sustainability initiatives during the year under review, with the following accolades:

Included in the renowned FTSE4Good Emerging Markets Index series for ESG Performance for the 2^nd time. FTSE4Good is an equity index series that is designed to facilitate investment in companies that meet globally recognised corporate responsibility standards. It is designed to measure the performance of companies demonstrating strong Environmental, Social and Governance practices.

Ranked 48^th amongst Top 100 Indian companies for Sustainability & CSR under Responsible Business Rankings 2020 by Futurescape.

Included in the 'Dow Jones Sustainability Indices' Sustainability Yearbook 2021 (the only Indian Company among the Diversified Financial Services Companies to feature in the same).

Attained performance band “B” in the Carbon Disclosure Project (CDP) assessment 2020-21, greater than the Sector average and Asia Regional average.

Selected as the winner of the 'The Mahindra Group Sustainability Performance Award, 2020'.

Your Company's approach has been to make its environmental disclosure transparent, and accordingly,

 

it has been reporting disclosures and reports on its performance through the Carbon Disclosure Project (CDP) India since Financial Year 2011-12.

Sensitising the employees to a novel concept such as Sustainability has been one of the key initiatives of the Company during the year. Capacity building on Sustainability has been driven by Sustainability Courses on the learning platform. The Company launched a module on Human Rights in the reporting year and made it mandatory for all the employees. The Mahindra Group and the United Nations have partnered to offer a Course on Climate change for its employees.

During the year, your Company made proactive efforts to reduce CO2 emissions (carbon footprint) through Project “Mahindra Hariyali” by planting more than 30,000 saplings throughout the country.

Your Company is gearing up to be future ready by making sustainability and climate change an integral part of its risk framework and taking measures to mitigate and manage them. In the reporting year, the Company has enhanced its existing Risk Register by including applicable Climate change risks. Weather reports are assessed on a regular basis and aligned with business operations to protect the customers and minimize the risk impact. The outlook for the future has been positive and your Company is well equipped to enable its customers and communities to progress through its inclusive and sustainable business model.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report (“BRR”) of your Company for the year 2020-21 forms part of this Annual Report as required under Regulation 34(2)(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is appended as “Annexure II”.

Your Company is building an inclusive organisation by empowering all the stakeholders and facilitating their contribution towards growth that is both holistic and long term. Through the inclusive business model, your Company endeavours to cater to the bottom of the pyramid in the rural and semi-urban areas, enabling them to earn their livelihood through varied financial products and services. Your Company has always been conscious of its role as a responsible corporate citizen. Through its wide network of branches with locally-recruited employees, strong and lasting relationships with its stakeholders, large customer base, vast experience and market knowledge, your Company is providing financial resources to underserviced regions of the country.

The BRR can also be accessed on the Company's website at: https://mahindrafinance.com/discover-mahindra-finance/sustainability.

INTEGRATED REPORTING

Your Company is pleased to present its first Integrated Report, which encompasses both financial and non-financial information to enable Members to have a more holistic understanding of the Company's long-term perspective. This Integrated Report forms part of the Annual Report and is in consonance with the SEBI Circular dated 6^th February, 2017 An Integrated Report takes corporate reporting beyond just discussing the financial resources, since any value creation activity requires other resources like people, natural resources and business relationships.

The Integrated Annual Report for the year 2020-21 includes details such as the organisation's strategy, governance framework, performance and prospects of value creation based on the six (6) forms of capital viz. financial capital, manufactured capital, intellectual capital, human capital, social and relationship capital and natural capital.

The Integrated Annual Report for the year 2020-21 is hosted on the Company's website and can be accessed at the web-link: https://www.mahindrafinance.com/investor-zone/financial-information/

Since 2012-13, the Company has been annually publishing a Sustainability Report conforming to the guidelines of the Global Reporting Initiative ("GRI”). These Reports adhere to the GRI standards and are based on the Integrated Reporting framework and have been externally assured. This year the Sustainability Report has been combined with the Integrated Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

With a vision to transform rural and semi-urban India into a self-reliant, flourishing landscape, Mahindra Finance started its journey in 1991 and grew into a leading NBFC with an employee base of around 20,000 employees all over India. By supporting about 23 NGOs and implementing partners in the areas of Education & Livelihood, Healthcare and Environment, the Company strives to become an asset in the communities where it operates. Your Company's Corporate Social Responsibility ['CSR'] initiatives are aligned with the mission of transforming rural lives and hence focus on areas such as Education & Livelihood, Healthcare and Environment.

In FY 2021, to consolidate and further strengthen its endeavor to support drivers, your Company launched its flagship program-"SWABHIMAAN a holistic driver development program”.

This program is initiated to address the professional, financial, and familial challenges faced by the drivers and their families and further contribute to their overall wellbeing. This multi-year program aims to benefit over 75,000 beneficiaries through key interventions focusing on various aspects of a driver's life. Your Company will provide driver's training to freshers, road safety training to existing drivers, auto mechanic training to women, financial planning workshops, accidental and health insurance policy to drivers and award scholarships to driver's children.

Your Company continued its support to People with Disabilities [PwDs] by training them under 'Hunnar' program in various skills in BFSI, hospitality and ITES sectors to enhance their employability. 365 people with disabilities were trained and 274 were placed in jobs. The Company also conducted awareness campaigns about sanitation and hygiene under Healthcare and Swachh Bharat initiatives.

Reaffirming its commitment to the cause of education, your Company continued its support to the Nanhi Kali Program which has benefitted over 10,800 underprivileged girl children from socially and economically marginalized families living in urban, rural, and tribal parts of India. Your Company, to promote inclusive socio-economic growth of the marginalized youth, continued its support to Mahindra Pride School which skilled 1,822 youth and 100% have been placed. Further, Mahindra Pride Classrooms supported an additional 20 hours of online training to 30,627 final year students covering English Speaking, Life Skills, Aptitude, Interview, Group Discussion and Digital Literacy through Polytechnics and Arts & Science Colleges.

To continue with its commitment to increase the green cover, your Company's employees participated in the Mahindra Hariyali project. Employees from most of the branches, planted more than 30,000 saplings in selected locations.

Your Company provided ration kits to more than 5,000 drivers and their families affected by the COVID-19 pandemic across multiple States in India.

Apart from the key thrust areas, your Company contributed funds for other causes such as preservation and promotion of the fine arts and culture and supporting orphanage homes, differently abled homes and homes for the elderly to re-affirm its pledge to strive for a better society.

During the year under review, your Company has spent Rs. 32.54 Crores towards Corporate Social Responsibility on various CSR projects and programs. This includes the contribution of Rs. 517 Crores made to PM Cares Fund in the Financial Year 2019-20, which has been off-set against the CSR spend of the Financial Year 2020-21 as per the Notification D.O. No 05/1/2020-CSR-MCA dated 30^th March, 2020 issued by the Ministry of Corporate Affairs. Your Company is in compliance with the statutory requirements in this regard.

CSR COMMITTEE

The Company has duly constituted a CSR Committee in accordance with Section 135 of the Companies Act, 2013 to assist the Board and the Company in fulfilling the corporate social responsibility objectives of the Company.

Consequent upon the resignation of Dr. Anish Shah as a Member of the Committee with effect from 16^th May, 2020 and cessation of Mr. V. Ravi, Member, as Executive Director & Chief Financial Officer of the Company with effect from 25^th July, 2020, the Committee presently comprises of the following Directors:

 

Name	Category
Mr. Dhananjay Mungale	- Chairman of the Committee (Independent Director)
Ms. Rama Bijapurkar	- Independent Director
Mr. Ramesh Iyer	- Vice-Chairman & Managing Director

 

During the year under review, 4 (four) CSR Committee Meetings were held, details of which are provided in the Corporate Governance Report.

CSR POLICY

During the year under review, the Board based on the recommendation of the CSR Committee, amended the CSR Policy to align the same in accordance with the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 and Section 135 of the Companies Act, 2013, as amended, effective from 22^nd January, 2021.

The revised CSR Policy is hosted on the Company's website and can be accessed at the web-link: https:// www.mahindrafinance.com/investor-zone/corporate-governance. The detailed Annual Report on the CSR activities undertaken by your Company during the year, as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is set out in “Annexure III” of this Report.

ANNUAL RETURN

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return as on 31^st March, 2021 in Form No. MGT-7, is available on the Company's website and can be accessed at the web-link: https://www.mahindrafinance.com/investor-zone/financial-information.

BOARD MEETINGS, EXTRAORDINARY GENERAL MEETING AND ANNUAL GENERAL MEETING

The calendar of the Board/Committee Meetings and the Annual General Meeting is circulated to the Directors in advance to enable them to plan their schedule for effective participation at the respective meetings. Additional Board Meetings are convened by giving appropriate notice to address business exigencies. Apart from Meetings, at times, certain decisions are taken by the Board/Committee(s) through Circular Resolutions, after a discussion over a conference call between Board/Committee Members.

All the decisions and urgent matters approved by way of Circular Resolutions/Circular Note are placed and noted at the subsequent Board/Committee Meeting(s).

The Board of Directors met seven times during the year under review, on 15^th May, 2020, 1^st June, 2020, 18^th July, 2020, 18^th September, 2020, 26^th October, 2020, 28^th January, 2021 and 5^th March, 2021. The requisite quorum was present for all the Meetings. The maximum time gap between any two Meetings was not more than one hundred and twenty days. These Meetings were well attended. The 30^th Annual General Meeting ('AGM') of the Company was held on 10^th August, 2020.

During the year under review, an Extraordinary General Meeting ('EGM') of the Members was held on 30^th June, 2020 to approve the increase in the Authorised Share Capital of the Company and consequential amendment(s) to the Capital Clause of the Memorandum of Association of the Company.

Detailed information on the Meetings of the Board, its Committees, EGM and the AGM is included in the Report on Corporate Governance, which forms part of this Annual Report.

MEETINGS OF INDEPENDENT DIRECTORS

The Independent Directors met twice during the year under review, on 13^th August, 2020 and 4^th March, 2021. The Meetings were conducted in an informal manner without the presence of the Whole-time Director(s), the Non-Executive Non-Independent Directors, or any other Management Personnel.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company has various Committees which have been constituted as a part of good corporate governance practices and the same are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

Audit Committee

As on 31^st March, 2021, the Audit Committee comprised of four Independent Directors and one Non-Executive NonIndependent Director:

Name	Category
Mr. C. B. Bhave	Chairman of the Committee (Independent Director)
Mr. Dhananjay Mungale	Independent Director
Ms. Rama Bijapurkar	Independent Director
Mr. Milind Sarwate	Independent Director
Dr. Anish Shah	Non-Fxec.iit.ive Non-Independent Director

Changes in Committee Members during the year:

•    Mr. V. S. Parthasarathy ceased to be a Member of the Committee consequent upon his resignation as a NonExecutive Non-Independent Director of the Company with effect from 18^th September, 2020.

•    Mr. Amit Raje, Non-Executive Non-Independent Director of the Company was appointed as a Member of the Committee with effect from 28^th January, 2021.

Pursuant to his appointment as a Whole-time Director of the Company with effect from 1^st April, 2021, and in order to be consistent with the principles of good governance, Mr. Amit Raje resigned as a Member of the Audit Committee with effect from 5^th March, 2021.

•    Mr. Arvind V. Sonde ceased to be a Member of the Committee consequent to his resignation as an Independent Director of the Company with effect from 15^th March, 2021.

During the year, 7 (seven) Audit Committee Meetings were held, details of which are provided in the Corporate Governance Report.

The recommendations of the Audit Committee were duly approved and accepted by the Board during the year under review.

Other Board Committees

The other Committees of the Board are:

i)    Nomination and Remuneration Committee

ii)    Stakeholders Relationship Committee

iii)    Corporate Social Responsibility Committee

iv)    Risk Management Committee

v)    Asset Liability Committee

vi)    IT Strategy Committee

vii)    Committee for Strategic Investments

The details with respect to the composition, powers, roles, terms of reference, Meetings held and attendance of the Directors at such Meetings of the relevant Committees are given in detail in the Report on Corporate Governance of the Company which forms part of this Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Chairman of the Board of Directors

i)    Resignation of Mr. Dhananjay Mungale as Chairman of the Board with effect from close of business hours on 1^st April, 2021

Mr. Dhananjay Mungale (DIN: 00007563) stepped down as the Chairman of the Board of Directors with effect from the close of business hours on 1^st April, 2021.

The Board has placed on record its deep appreciation of the contribution and valuable services rendered by Mr. Mungale during his association as Chairman of the Board since 2016.

Mr. Dhananjay Mungale continues to be an Independent Director of the Company.

ii)    Appointment of Dr. Anish Shah as Chairman of the Board of Directors with effect from 2^nd April, 2021

In the light of Mr. Dhananjay Mungale relinquishing his office as Chairman of the Board of Directors of the Company and on the recommendation of the Nomination and Remuneration Committee, the Board at its Meeting held on 28^th January, 2021, appointed Dr. Anish Shah (DIN: 02719429) as Non-Executive Chairman of the Board with effect from 2^nd April, 2021.

?r. Anish Shah is currently the Managing Director and Chief Executive Officer of Mahindra & Mahindra Limited ['M&M'], the Holding Company, with responsibility for the Group Corporate Office and full oversight of all businesses other than the Auto and Farm sectors of M&M.

Appointment/Re-Appointment of Directors Mr. Ramesh Iyer

Re-appointment of Mr. Ramesh Iyer, Managing Director designated as Vice-Chairman & Managing Director

Mr. Ramesh Iyer has been the Managing Director of the Company since 30^th April, 2001 and has played a key role in building Mahindra Finance into one of India's leading rural finance companies, since 1995.

In March 2016, Mr. Iyer was elevated as the Vice-Chairman & Managing Director of the Company.

The term of office of Mr. Ramesh Iyer, Vice-Chairman & Managing Director of the Company, expires on 29^th April, 2021.

On the recommendation of the Nomination and Remuneration Committee ['NRC'], the Board of Directors at its Meeting held on 23^rd April, 2021, has re-appointed Mr. Ramesh Iyer [DIN: 00220759] as the Managing Director, liable to retire by rotation, designated as Vice-Chairman & Managing Director for a period of 3 [three] years with effect from 30^th April, 2021 to 29^th April, 2024 [both days inclusive], subject to the approval of Members at the ensuing Annual General Meeting.

Mr. Amit Raje

Appointment of Mr. Amit Raje as a Non-Executive NonIndependent Director

Pursuant to the recommendation of the NRC, the Board at its Meeting held on 18^th September, 2020, appointed Mr. Amit Raje [DIN: 06809197] as an Additional Non-Executive NonIndependent Director of the Company with effect from 18^th September, 2020, liable to retire by rotation.

The Members of the Company have by means of an Ordinary Resolution passed on 3^rd March, 2021 vide Postal Ballot conducted through Remote E-voting mode, approved the appointment of Mr. Amit Raje as a Non-Executive NonIndependent Director of the Company.

Appointment of Mr. Amit Raje as Whole-time Director of the Company designated as “Chief Operating Officer Digital Finance - Digital Business Unit”

 

The Board of Directors of the Company at its Meeting held on 5^th March, 2021, has on the recommendation of the NRC, appointed Mr. Amit Raje as a Whole-time Director of the Company liable to retire by rotation, designated as “Chief Operating Officer Digital Finance -Digital Business Unit” for a period of 5 [five] years, with effect from 1^st April, 2021 till 31^st March, 2026 [both days inclusive], subject to approval of the Members at the ensuing Annual General Meeting.

Dr. Rebecca Nugent

Appointment of Dr. Rebecca Nugent as an Independent Director of the Company

Based on the recommendation of the NRC and on the proposal of the Board of Directors, Dr. Rebecca Nugent [DIN: 09033085] was appointed as an Independent Director of the Company, to hold office for a term of 5 [five] consecutive years commencing from 5^th March, 2021 to 4^th March, 2026 [both days inclusive], vide an Ordinary Resolution passed by the Members by means of a Postal Ballot through remote e-voting mode on 3^rd March, 2021.

Mr. Amit Kumar Sinha

Appointment of Mr. Amit Kumar Sinha as a Non-Executive Non-Independent Director

Pursuant to the recommendation of the NRC, the Board at its Meeting held on 23^rd April, 2021, appointed Mr. Amit Kumar Sinha [DIN: 09127387] as an Additional Non-Executive NonIndependent Director with effect from 23^rd April, 2021, to hold office up to the date of the ensuing Annual General Meeting ['AGM'] of the Company and thereafter, subject to the approval of the Members at the said AGM, as a NonExecutive Non-Independent Director, liable to retire by rotation.

The Company has received the requisite Notice from a Member in writing proposing his appointment as a Director of the Company.

Cessation of Directors

Mr. V. Ravi

As mentioned in the previous Annual Report, Mr. V. Ravi [DIN: 00307328] ceased to be the Executive Director & Chief Financial Officer of the Company upon completion of his tenure with effect from 25^th July, 2020. The Board has placed on record its deep appreciation of Mr. V. Ravi's immense contribution and valuable services during his long association with the Company and acknowledged Mr. Ravi's outstanding experience and expertise in serving

the Company including the Group's Financial Services Sector companies.

Mr. V. S. Parthasarathy

Resignation of Mr. V. S. Parthasarathy as Non-Executive Non-Independent Director of the Company

Mr. V. S. Parthasarathy (DIN: 00125299) resigned as Non-Executive Non-Independent Director with effect from 18^th September, 2020.

Consequently, Mr. V. S. Parthasarathy also ceased to be a Member of the Audit Committee, Nomination and Remuneration Committee, Risk Management Committee, Asset Liability Committee and Committee for Strategic Investments of the Board effective 18^th September, 2020.

Mr. Parthasarathy joined the Board of Directors of your Company in July 2014. The Board acknowledged Mr. V. S. Parthasarathy's contribution to the Company and has placed on record its appreciation of the invaluable services rendered by Mr. Parthasarathy during his association with the Company.

Mr. Arvind V. Sonde

Resignation of Mr. Arvind V. Sonde as an Independent Director of the Company

Mr. Arvind V. Sonde (DIN: 00053834) was appointed as an Independent Director of the Company by the Members through a Postal Ballot, with effect from 9^th December, 2019 for a term of five years.

Mr. Arvind V. Sonde resigned as a Member of the Board with effect from 15^th March, 2021, due to other professional and family commitments. Mr. Sonde has confirmed that there are no material reasons for his resignation, other than those mentioned in his resignation letter.

Subsequently, Mr. Arvind V. Sonde also ceased to be a Member of the Audit Committee and Risk Management Committee of the Board effective 15^th March, 2021.

The Board has placed on record its sincere appreciation of the valuable services rendered by Mr. Sonde as an Independent Director of the Company.

RETIREMENT BY ROTATION

Mr. Ramesh Iyer retires by rotation and, being eligible, offers himself for re-appointment at the 31^st Annual General Meeting of the Company scheduled to be held on 26^th July, 2021.

Re-appointment of Independent Directors

None of the Independent Directors of the Company is due for re-appointment.

Resignation of Independent Director(s)

During the year under review, except for Mr. Arvind V. Sonde, none of the Independent Directors of the Company had resigned before the expiry of his/her respective tenure(s).

Declaration by Directors

All the Directors of the Company have confirmed that they satisfy the “fit and proper” criteria as prescribed under Chapter XI of RBI Master Direction No. DNBR. PD.008/03.10.119/2016-17 dated 1^st September, 2016, as amended, and that they are not disqualified from being appointed/continuing as Directors in terms of Section 164(2) of the Companies Act, 2013.

Declaration by Independent Directors

All the Independent Directors of the Company have given their respective declarations/disclosures under Section 149(7) of the Companies Act, 2013 ('Act') and Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations') and have confirmed that they fulfill the criteria of Independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations, and have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.

Further, the Board after taking these declarations/ disclosures on record and acknowledging the veracity of the same, concluded that the Independent Directors are persons of integrity and possess the relevant proficiency, expertise and experience to qualify as Independent Directors of the Company and are Independent of the Management of the Company.

In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by the Indian Institute of Corporate Affairs, Manesar ('IICA'). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of 2 (two) years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption.

The Independent Directors of the Company except Dr. Rebecca Nugent, are exempt from the requirement to undertake the online proficiency self-assessment test conducted by IICA. Dr. Rebecca Nugent will be undertaking the said test in due course.

Key Managerial Personnel

The following persons 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:

Mr. Ramesh Iyer, Vice-Chairman & Managing Director.

Mr. Amit Raje, Whole-time Director of the Company designated as “Chief Operating Officer Digital Finance -Digital Business Unit”.

Mr. Vivek Karve, Chief Financial Officer of the Company and Group Financial Services Sector.

Ms. Arnavaz M. Pardiwalla, Company Secretary.

Changes in Key Managerial Personnel Chief Financial Officer

Mr. V. Ravi ceased to be the Chief Financial Officer of the Company on completion of his tenure as Executive Director & Chief Financial Officer with effect from 25^th July, 2020.

Based on the recommendations of the Nomination and Remuneration Committee and the Audit Committee, the Board of Directors of the Company at its Meeting held on 18^th July, 2020 appointed Mr. Vivek Karve as the Chief Financial Officer designated as 'Chief Financial Officer of the Company and Group Financial Services Sector' with effect from 14^th September, 2020.

Directors’ Responsibility Statement

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, (“the Act”) your Directors, based on the representations received from the Operating Management and after due enquiry, confirm that:

i.    in the preparation of the annual accounts for financial year ended 31^st March, 2021, the applicable accounting standards have been followed and there are no material departures in adoption of these standards.

ii.    they have in consultation with the Statutory Auditors selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and

 

fair view of the state of affairs of the Company as at 31^st March, 2021 and of the profit of the Company for the year ended on that date.

iii.    they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv.    they have prepared the annual accounts for financial year ended 31^st March, 2021 on a going concern basis.

v.    they have laid down adequate internal financial controls to be followed by the Company and that such internal financial controls were operating effectively during the financial year ended 31^st March, 2021.

vi.    they have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively during the financial year ended 31^st March, 2021.

Performance Evaluation of the Board

The Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“the Listing Regulations”) stipulate the evaluation of the performance of the Board, its Committees, Individual Directors and the Chairperson.

The Company has formulated a Policy for performance evaluation of the Independent Directors, the Board, its Committees and other individual Directors which includes criteria for performance evaluation of the Non-Executive Directors and Executive Directors.

The evaluation framework for assessing the performance of Directors comprises various key areas such as attendance at Board and Committee Meetings, quality of contribution to Board discussions and decisions, strategic insights or inputs regarding future growth of the Company and its performance, ability to challenge views in a constructive manner, knowledge acquired with regard to the Company's business/activities, understanding of industry and global trends, etc.

The evaluation involves self-evaluation by the Board Member and subsequent assessment by the Board of Directors. A member of the Board will not participate in the discussion of his/her evaluation.

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of 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 the Directors individually [including Independent Directors). The evaluation process was based on the affirmation received from the Independent Directors that they met the independence criteria as required under the Companies Act, 2013, and the Listing Regulations.

Feedback was sought by way of well-defined and structured questionnaires covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, areas of responsibility, execution and performance of specific duties, obligations and governance, compliance, oversight of Company's subsidiaries, etc., and the evaluation was carried out based on responses received from the Directors. The aspects of succession planning were also considered.

A separate exercise was carried out by the Nomination and Remuneration Committee of the Board to evaluate the performance of individual Directors who were evaluated on several parameters such as level of engagement and contribution, independence of judgment safeguarding the interest of the Company and its minority shareholders and knowledge acquired with regard to the Company's business/activities.

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 Directors and Non-Executive Directors.

The performance evaluation of the Independent Directors was carried out by the entire Board excluding the Director being evaluated.

The outcome of the Board Evaluation for the Financial Year 2020-21 was discussed by the Nomination and Remuneration Committee and the Board at their respective meetings held in April 2021. Qualitative comments and suggestions of Directors were taken into consideration by Mr. Dhananjay Mungale, former Chairman of the Board and Mr. C. B. Bhave, former Chairman of the Nomination and Remuneration Committee. The Directors have expressed their satisfaction with the evaluation process.

Familiarisation Programme for Independent Directors

The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the

Company and related matters along with details of number of programmes and number of hours spent by each of the Independent Directors during the Financial Year 2020-21, in terms of the requirements of SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015 are available on the website of the Company and can be accessed at the web-link: https://www.mahindrafinance.com/ media/383820/familiarisation-programme-for-the-f-y-2020-21-website-uploading.pdf

Policies on Appointment of Directors and Senior Management and Remuneration of Directors, Key Managerial Personnel and Employees

i)    Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management

In accordance with the provisions of Section 134[3] [e] of the Companies Act, 2013 [“the Act”] read with Section 178[2] of the Act and Regulation 17 of the SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015, your Company has adopted a Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management, which inter alia, includes the criteria for determining qualifications, positive attributes and independence of Directors, identification of persons who are qualified to become Directors and who may be appointed in the Senior Management team, succession planning for Directors and Senior Management, and the Talent Management framework of the Company.

This Policy is available at the Company's website at the web-link: https://mahindrafinance.com/investor-zone/corporate-governance.

ii)    Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel and Employees of the Company

Your Company has also adopted the Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel and Employees of the Company in accordance with the provisions of sub-section [4] of Section 178 of the Act.

Dr. Anish Shah has been appointed as the Non-Executive Chairman of the Board of Directors with effect from 2^nd April, 2021. Dr. Shah is in the whole-time employment of Mahindra & Mahindra Limited ['M&M'], the Holding Company and draws remuneration from it. Dr. Anish Shah is not paid any sitting fees or remuneration by the Company.

In view of the above, the Policy on Remuneration of Directors has been amended effective 2^nd April, 2021, in line with the aforesaid requirements and administrative changes.

The Policy on Remuneration of Directors, as amended, and the Remuneration Policy for Key Managerial Personnel and Employees of the Company, are appended as “Annexure IV-A” and “Annexure IV-B”, respectively, and form part of this Report. These Polices are also available at the Company's website at the web-link: https://mahindrafinance.com/investor-zone/corporate-governance.

The criteria for determining qualifications, positive attributes and independence of a Director and the Remuneration Policies for Directors, Key Managerial Personnel and other employees have been discussed in detail in the Report on Corporate Governance.

AUDITORS

Statutory Auditors

Messrs. B S R & Co. LLP, Chartered Accountants, (ICAI Firm Registration No.101248W/W-100022), were appointed as Statutory Auditors of the Company at the Twenty-seventh Annual General Meeting ('AGM') to hold office for a period of five consecutive years, commencing from the conclusion of the 27^th AGM held on 24^th July, 2017 till the conclusion of the 32^nd AGM of the Company to be held in the year 2022.

The Statutory Auditors have given a confirmation to the effect that they are eligible to continue with their appointment and that they have not been disqualified in any manner from continuing as Statutory Auditors. The remuneration payable to the Statutory Auditors shall be determined by the Board of Directors based on the recommendation of the Audit Committee.

The Report given by the Auditors on the Financial Statements of the Company for the Financial Year 2020-21 is a part of the Annual Report. The Report is unmodified and does not contain any qualification, reservation, adverse remark or disclaimer.

The Statutory Auditors were present at the last AGM. Secretarial Auditor

The Board of Directors of the Company has appointed Messrs. KSR & Co., Company Secretaries LLP to conduct the Secretarial Audit of the Company pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. In accordance with the

 

f provisions of sub-section (1) of Section 204, the Secretarial Audit Report for the Financial Year 2020-21 is appended to j this Report as “Annexure V”.

The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

l The Secretarial Auditor was present at the last AGM.

', Secretarial Audit of Material Unlisted Indian 3 Subsidiary

k Mahindra Rural Housing Finance Limited ('MRHFL), a ^- material subsidiary of the Company undertakes Secretarial Audit every year under Section 204 of the Companies Act, 2013. The Secretarial Audit of MRHFL for the Financial Year 2020-21 was carried out pursuant to Section 204 of the ¹Â Companies Act, 2013 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, ¹Â Â Â Â 2015. The Secretarial Audit Report of MRHFL submitted

by Messrs. KSR & Co., Company Secretaries LLP, does not contain any qualification, reservation or adverse remark or disclaimer. The Secretarial Audit Report is appended as “Annexure VI” and forms part of this Report.

i Cost Records and Cost Audit

³Â Maintenance of cost records and requirement of cost audit ¹Â as prescribed under the provisions of Section 148(1) of the ^ Companies Act, 2013 are not applicable in respect of the

¹Â business activities carried out by the Company. f

Reporting of Frauds by Auditors

3 During the year under review, the Statutory Auditors and t the Secretarial Auditor have not reported any instances i of frauds committed in the Company by its Officers or 3 Employees, to the Audit Committee under Section 143(12) j of the Companies Act, 2013, details of which need to be t mentioned in this Report.

PARTICULARS OF CONTRACTS OR f ARRANGEMENTS WITH RELATED _t^f PARTIES

” All contracts/arrangements/transactions entered into by the Company during the Financial Year with Related Parties were in the ordinary course of business and on an arm's length basis. During the year under review, your Company had not entered into any contract/arrangement/ transaction with Related Parties which could be considered ^ material in accordance with the Policy on Related Party ^t Transactions. Pursuant to Section 134 (3) (h) read with Rule ³Â Â Â Â 8 (2) of the Companies (Accounts) Rules, 2014, there are

* no transactions to be reported under Section 188 (1) of the ^f Companies Act, 2013. Accordingly, the disclosure of Related

3

provisions. Furthermore, credit losses may increase due to exposure to vulnerable sectors of the economy such as retail, hospitality and commercial real estate. The impact of the pandemic on the long-term prospects of businesses in these sectors is uncertain and may lead to significant credit losses on specific exposures, which may not be fully captured in ECL estimates.

Further, in accordance with the regulatory expectation of the Reserve Bank of India to bring down the Net Non-Performing Asset [NPA] ratio below 4%, which the Management has agreed with, the Company recorded an additional provision of Rs. 1,300 Crores during fourth quarter on Stage 3 loans.

The final impact of this pandemic and the Company's impairment loss allowance estimates are inherently uncertain, and hence, the actual impact may be different than that estimated based on the conditions prevailing as at the date of approval of these financial results. The management will continue to closely monitor the material changes in the macro-economic factors impacting the operations of the Company.

The continuing rapid spread of COVID-19 pandemic, emergence of new variants of the virus and the subsequent restrictions/control measures announced by the respective State Governments are the events which have continued till the date of the announcement of financial results of the Company. These uncertainties may adversely impact the Company's business operations in the future period.

Other than the above mentioned situation affecting the Company, there is no material change and commitment that have occurred after the closure of the Financial Year 2020-21 till the date of this Report, which would affect the financial position of your Company.

RISK MANAGEMENT POLICY

Your Company has a comprehensive Risk Management Policy in place and has laid down a well-defined risk management framework to identify, assess and monitor risks and strengthen controls to mitigate risks. Your Company has established procedures to periodically place before the Risk Management Committee and the Board of Directors, the risk assessment and minimisation procedures being followed by the Company and steps taken by it to mitigate these risks.

The Risk Management Policy, inter alia, includes identification therein of elements of risk, including Cyber Security and related risks as well as those risks which in the opinion of the Board may threaten the existence of the Company. The Risk management process has been established across

 

Party Transactions, as required under Section 134 [3] (h) of the Companies Act, 2013 in Form AOC-2 is not applicable to the Company.

The Policy on Related Party Transactions as approved by the Board of Directors of the Company is uploaded on the website of the Company and same can be accessed on the web-link: https://www.mahindrafinance.com/investor-zone/corporate-governance/.

Further details on the transactions with Related Parties are provided in the accompanying Financial Statements.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

The ongoing COVID-19 pandemic and its effect on the overall economy has impacted consumer sentiments and collections thus affecting the Company's performance, and the future effects of the outbreak remain uncertain. The outbreak has necessitated the Government to respond at unprecedented levels to protect public health, local economies and livelihoods. There remains a risk of subsequent waves of infection, as evidenced by the recently emerged variants of the virus. All these have substantially increased the estimation uncertainty in the preparation of the Financial Statements for the year ended 31^st March, 2021.

Your Company has developed various accounting estimates in these Financial Statements based on forecasts of economic conditions which reflect expectations and assumptions as at 31^st March, 2021 about future events that the management believe are reasonable under these circumstances. There is a considerable degree of judgement involved in preparing forecasts. The underlying assumptions are also subject to uncertainties which are often outside the control of the Company. Accordingly, actual economic conditions are likely to be different from those forecast since anticipated events frequently do not occur as expected, and the effect of those differences may significantly impact accounting estimates included in these Financial Statements.

The significant accounting estimates impacted by these forecasts and associated uncertainties are predominantly related to expected credit losses, fair value measurement, and recoverable amount assessments of non-financial assets.

Across the geographies and segments in which the Company operates, the COVID-19 outbreak has led to a worsening of economic conditions and increased uncertainty, which has been reflected in higher Expected Credit Loss ['ECL]

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. Your Company has a robust organisational structure for managing and reporting on risks.

The development and implementation of Risk Management Policy adopted by the Company is discussed in detail in the Management Discussion and Analysis chapter, which forms part of this Annual Report.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company promotes ethical behaviour in all its business activities and has established a vigil mechanism for its Directors, Employees and Stakeholders associated with the Company to report their genuine concerns. The Vigil Mechanism as envisaged in the Companies Act, 2013 and the Rules prescribed thereunder and the Listing Regulations is implemented through the Whistle Blower 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.

The Board at its Meeting held on 23^rd April, 2021 has pursuant to the recommendations of the Audit Committee, and in keeping with the changing Corporate Governance landscape, adopted a Revised Whistle Blower Policy of the Company.

As per the Whistle Blower Policy implemented by the Company, the Employees, Directors, customers, dealers, vendors, suppliers, or any Stakeholders associated with the Company are free to report illegal or unethical behaviour, actual or suspected fraud or violation of the Company's Codes of Conduct or Corporate Governance Policies or any improper activity to the Ethics Helpline Provider or the Chairperson of the Audit Committee of the Company or the Code of Conduct Committee. The Whistle Blower Policy also provides for reporting of insider trading violations as well as reporting of instances of leak of Unpublished Price Sensitive Information by the employees.

The Whistle Blower Policy provides for protected disclosure and protection to the Whistle Blower. Under the Whistle Blower Policy, the confidentiality of those reporting violation(s) is protected and they are not subject to any discriminatory practices. Protected disclosures can also be made by sending an email at the designated email id:

[e-mail] or any other mechanism as prescribed in the Whistle Blower Policy.

The Chairperson of the Audit Committee can be reached by sending a letter to the below address:

Chairperson of the Audit Committee Mahindra & Mahindra Financial Services Limited Mahindra Towers, 4^th Floor,

Dr. G. M. Bhosale Marg,

P. K. Kurne Chowk, Worli,

Mumbai - 400 018.

The Whistle Blower Policy has been appropriately communicated within the Company and is available on the website of your Company at the web-link: https://mahindrafinance.com/media/384157/vigil-mechanism.pdf.

The Audit Committee is apprised on the vigil mechanism on a periodic basis. During the year, no personnel have been denied access to the Audit Committee.

SUBSIDIARIES, JOINT VENTURE(S) AND ASSOCIATE(S)

The Company's Subsidiaries, Joint Venture(s) and Associate(s) continue to contribute to the overall growth in revenues and overall performance of your Company. A Report on the performance and financial position of each of the subsidiaries, joint venture(s) and the associate companies included in the Consolidated Financial Statements and their contribution to the overall performance of the Company, is provided in Form AOC-1 as ‘Annexure A’ to the Consolidated Financial Statements and forms part of this Annual Report.

Your Company has formulated a Policy for determining 'Material' Subsidiaries as defined in Regulation 16 of the Listing Regulations. This Policy has been hosted on the website of the Company and can be accessed at the web-link: https://mahindrafinance.com/investor-zone/ corporate-governance.

SUBSIDIARIES

Mahindra Insurance Brokers Limited

During the year under review, Mahindra Insurance Brokers Limited ('MIBL), the subsidiary in the business of Direct and Re-insurance Broking, serviced approximately 1.43 million insurance cases, for both Life and Non-Life Retail business. There is de-growth of 14% in Gross Premium facilitated for the Corporate and Retail business lines, decreasing from Rs. 2,431.89 Crores in the Financial Year 2019-20 to Rs. 2,101.06 Crores in the Financial Year 2020-21. The Total Income decreased by 20% from Rs. 336.89 Crores

in the Financial Year 2019-20 to Rs. 268.56 Crores in the Financial Year 2020-21. The Profit before Tax decreased by 40% from Rs. 73.90 Crores to Rs. 43.98 Crores and the Profit after Tax decreased by 40% from Rs. 53.36 Crores to Rs. 32.03 Crores during the same period. MIBL has been able to reach the benefit of insurance to over 3 lakh villages across India.

During the year, MIBL focused on improving manpower productivity and efficiency through automation projects. There is also a sharper focus on diversifying the customer base through additional distribution channel including the Point of Sales Person channel and the direct online sales through paybima.com. Though some of the planned investments in some of the business divisions were delayed, there is no change in the long term strategy of MIBL.

Mahindra Rural Housing Finance Limited

Mahindra Rural Housing Finance Limited ('MRHFL), the Company's subsidiary in the business of providing loans for purchase, renovation, construction of houses to individuals in the rural and semi-urban areas of the country, registered a total income of Rs. 1,454.7 Crores as compared to Rs. 1,527.6 Crores for the previous year, registering a decline of 4.8%. Profit before tax was 5% lower at Rs. 195.3 Crores as compared to Rs. 205.6 Crores for the previous year. Profit after tax was 1.6% higher at Rs. 151.0 Crores as compared to Rs. 148.6 Crores for the previous year.

During the year under review, MRHFL disbursed loans aggregating to Rs. 796.6 Crores as against Rs. 1,876.4 Crores in the previous year.

MRHFL continued its focus on serving customers in rural India. Majority of the loans disbursed were to customers in villages with an average annual household income of less than Rs. 2.00 lakhs. During the year under consideration, MRHFL disbursed home loans to around 34,559 households (in addition to around 10,45,898 existing households as on 31^st March, 2020). MRHFL has been expanding its geographical presence to provide affordable services for rural households.

Mahindra Manulife Investment Management Private Limited and Mahindra Manulife Trustee Private Limited

Equity Infusion by Manulife Investment Management (Singapore) Pte. Limited

As mentioned in the previous Annual Report, Manulife Investment Management (Singapore) Pte. Limited has acquired 49% of the equity share capital of Mahindra

Manulife Investment Management Private Limited [formerly nown as Mahindra Asset Management Company Private Jmited ('MAMCPL)] and Mahindra Manulife Trustee Private Jmited [formerly known as Mahindra Trustee Company Private Limited ('MTCPL')], then wholly-owned subsidiaries, pursuant to the execution of the Share Subscription Agreement and Shareholders' Agreement by and amongst :he Company, MAMCPL, MTCPL and Manulife on 21^st June, 019.

Consequent to the above, the shareholding of the Company n MAMCPL and MTCPL stood reduced from 100% to 51% pf the share capital, respectively.

rhe erstwhile names of MAMCPL and MTCPL have been changed to Mahindra Manulife Investment Management Private Limited and Mahindra Manulife Trustee Private Jmited respectively, with effect from 19^th May, 2020.

Mahindra Manulife Investment Management Private Limited

Mahindra Manulife Investment Management Private Limited 'MMIMPL) acts as an Investment Manager for the schemes pf Mahindra Manulife Mutual Fund. As on 31^st March, 2021, MMIMPL was acting as the Investment Manager for sixteen chemes.

rhe Average Assets under Management in these sixteen schemes were Rs. 5,249 Crores in March 2021 as compared :o Rs. 4,771 Crores in March 2020. Of these assets, Rs. 2,591 Crores were in equity schemes in March 2021 as compared to Rs. 1,616 Crores in March 2020. MMIMPL aas empanelled more than 15,600 distributors and opened 2,13,610 investor accounts in these schemes, recording a Jse of more than 12%.

During the year under consideration, the total income of MMIMPL was Rs. 30.5 Crores as compared to Rs. 17 Crores ^:or the previous year. The operations for the year under consideration have resulted in a loss of Rs. 26.7 Crores as against a loss of Rs. 37.9 Crores during the previous year.

Mahindra Manulife Trustee Private Limited

Mahindra Manulife Trustee Private Limited ('MMTPL) acts as the Trustee to Mahindra Manulife Mutual Fund.

During the year, MMTPL earned trusteeship fees of Rs. 33 _akhs and other income of Rs. 2.7 Lakhs as compared to Rs. 20.9 Lakhs and Rs. 1 Lakh respectively, for the previous /ear. MMTPL recorded a loss of Rs. 0.97 Lakh for the year under review as against a loss of Rs. 1.8 Lakhs in the previous year.

Mahindra Finance CSR Foundation

Mahindra Finance CSR Foundation was incorporated on 2^nd April, 2019 as a wholly-owned subsidiary of the Company registered under Section 8 of the Companies Act, 2013, to promote and support CSR projects and activities. The CSR Foundation is focused on identifying need-based and long-term social impact interventions in cause areas such as health, education, employment & livelihood generation and environment.

In the current Financial Year, the Foundation has launched a flagship CSR program for one of the important stakeholders of your Company i.e. the Driver Community. It is aimed at providing a safety net to drivers and their family members from a holistic perspective and various interventions would be implemented in collaboration with local NGO partners in select States in India.

JOINT VENTURE/ASSOCIATE

Mahindra Finance USA LLC.

The joint venture company's disbursement registered a growth of 11.5% to USD 860.7 Million for the year ended 31^st March, 2021 as compared to USD 772.2 Million for the previous year.

Total Income declined by 10% to USD 61.9 Million for the year ended 31^st March, 2021 as compared to USD 68.8 Million for the previous year. Profit before tax was 77% higher at USD 23.4 Million as compared to USD 13.2 Million for the previous year. Profit after tax grew at a healthy rate of 82% to USD 175 Million as compared to USD 9.6 Million in the previous year.

Ideal Finance Limited (Sri Lanka)

In August, 2019, your Company entered into a Share Subscription, Share Purchase and Shareholders' Agreement with Ideal Finance Limited (Sri Lanka) ['Ideal Finance'] and its existing Shareholders to form and operate a Joint Venture in the financial services sector in Sri Lanka. The joint venture will capitalise on the Company's expertise of over 25 years in the financial services domain and Ideal Finance's domestic market knowledge to build a leading financial services business in Sri Lanka.

Till date your Company has acquired 38.20% stake in Ideal Finance for an amount equivalent to LKR 110 Crores (approximately Rs. 44 Crores). Your Company is committed to enhancing its equity stake in Ideal Finance up to 58.2% aggregating to an amount not exceeding LKR 200.3 Crores.

 

This joint venture will further strengthen your Company's presence in the financial services business. It will help your Company's growth in key emerging markets.

Names of Companies which have become or ceased to be Subsidiaries, Joint Ventures or Associate Companies during the year

During the year under review, no company has become or ceased to be a subsidiary, joint venture or associate of your Company.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company, its subsidiaries, associate(s) and joint ventures for the Financial Year 2020-21, prepared in accordance with the relevant provisions of the Companies Act, 2013 and applicable Indian Accounting Standards along with all relevant documents and the Auditors' Report form part of this Annual Report.

The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies, associate(s) and joint ventures.

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the Financial Statements of the Company, Consolidated Financial Statements along with relevant documents and separate annual accounts in respect of each of the subsidiaries are available on the website of the Company and can be accessed at the web-link: https:// www.mahindrafinance.com/investor-zone/financial-information.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY’S OPERATIONS IN FUTURE

There are no significant and material orders passed by the regulators or courts or tribunals that would impact the going concern status of the Company and its future operations.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Your Company has in place adequate internal financial controls with reference to the Financial Statements

commensurate with the size, scale and complexity of its operations.

Your Company uses various industry standard systems to enable, empower and engender businesses and also to maintain its Books of Account. The transactional controls built into these systems ensure appropriate segregation of duties, the appropriate level of approval mechanisms and maintenance of supporting records. The systems, Standard Operating Procedures and controls are reviewed by Management. These systems and controls are audited by Internal Auditors and their findings and recommendations are reviewed by the Audit Committee and the IT Strategy Committee of the Board of Directors which ensures the implementation.

Your Company's Internal Financial Controls were deployed through Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), that addresses material risks in your Company's operations and financial reporting objectives. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by The Institute of Chartered Accountants of India. The risk control matrices are reviewed on a yearly basis and control measures are tested and documented on a quarterly basis. The Company has during the year enhanced its IT systems making the ICFR process completely digital which has further enabled to strengthen its review and monitoring controls. Based on the results of such assessments carried out by Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.

Your Company recognises that Internal Financial Controls cannot provide absolute assurance of achieving financial, operational and compliance reporting objectives because of

 

its inherent limitations. Also, projections of any evaluation of the Internal Financial Controls to future periods are subject to the risk that the Internal Financial Control may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.

COMPLIANCE WITH THE PROVISIONS OF SECRETARIAL STANDARD - 1 AND SECRETARIAL STANDARD - 2

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

The applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to 'Meetings of the Board of Directors' and 'General Meetings', respectively, have been duly complied with, by your Company.

POLICIES

The details of the Key Policies adopted by the Company are mentioned at “Annexure VII” to the Board's Report.

GENERAL DISCLOSURE

During the year, the Company, in the capacity of a Financial Creditor, has filed two petitions before the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 for recovery of outstanding loans against its customers, being Corporate Debtors.

There was no instance of one-time settlement with any Bank or Financial Institution during the year under review.

PARTICULARS OF REMUNERATION AND RELATED DISCLOSURES

Disclosures with respect to the remuneration of Directors, Key Managerial Personnel and Employees as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are as under:

 

Sr. Disclosure Requirement	Â	Disclosure Details	Â	Â
No.	Name of Director/ KMP	Designation	Ratio of the remuneration of each Director to median remuneration of employees	% increase in Remuneration
1. Ratio of the remuneration of	Dr. Anish Shah*	Non-Executive Chairman (w.e.f. 2nd April, 2021)	N.A.	N.A.
each Director to the median remuneration of the employees of the Company for the Financial	Mr. Dhananjay Mungale** (Former Chairman)	Independent Director	15.96X	13.74
	Mr. C. B. Bhave	Independent Director	13.36X	21.04
	Ms. Rama Bijapurkar	Independent Director	12.39X	17.63
Year 2020-21 & Percentage increase in Remuneration of	Mr. Milind Sarwate	Independent Director	13.71X	25.08
	Mr. Arvind V. SondeA	Independent Director	11.25X	296.73
each Director, Chief	Dr. Rebecca Nugent#	Independent Director	1.02X	N.A.
Financial Officer and Company Secretary during the Financial Year 2020-21	Mr. V. S. Parthasarathy##	Non-Executive Non-Independent Director	N.A.	N.A.
	Mr. Ramesh Iyer	Vice-Chairman & Managing Director	254.06X	8.45
Â	Mr. Amit Raje$	Whole-time Director - Chief Operating Officer Digital Finance -Digital Business Unit	N.A.	N.A.
Â	Mr. V. Ravi$$	Former Executive Director & Chief Financial Officer	129.29X	7.26
Â	Mr. Vivek Karve@	Chief Financial Officer of the Company and Group Financial Services Sector	Â	N.A.
Â	Ms. Arnavaz M. Pardiwalla	Company Secretary & Compliance Officer	-	-13.47

 

* Dr. Anish Shah, Non-Executive Chairman, being in the whole-time employment of Mahindra & Mahindra Limited ('M&M’), the Holding Company, draws remuneration from it and does not receive any remuneration from the Company.

** Resigned as Chairman of the Board of Directors of the Company w.e.f. close of business hours on 1^st April, 2021. Mr. Mungale continues to be an Independent Director of the Company.

^A Resigned as an Independent Director of the Company with effect from 15^th March, 2021.

#    Appointed as an Independent Director of the Company with effect from 5^th March, 2021.

## Resigned as Non-Executive Non-Independent Director of the Company with effect from 18^th September, 2020. Mr. V. S. Parthasarathy being in the whole-time employment of M&M, did not receive any remuneration from the Company during the year.

$ Appointed as Non-Executive Non-Independent Director of the Company with effect from 18^th September, 2020. During F.Y. 202021, Mr. Amit Raje being in the whole-time employment of M&M, did not receive any remuneration from the Company.

Mr. Amit Raje has been appointed as a Whole-time Director of the Company, designated as Chief Operating Officer Digital Finance -Digital Business Unit with effect from 1^st April, 2021.

$$ Ceased to hold office as Executive Director & Chief Financial Officer of the Company with effect from 25^th July, 2020.

@ Appointed as Chief Financial Officer of the Company and Group Financial Services Sector with effect from 14^th September, 2020.

 

2. Percentage increase in the median Remuneration of employees in the Financial Year 2020-21:	There is no increase in the median remuneration of employees. There is a decrease of 16.09% in the median remuneration of employees, taking into consideration employees who were in employment for the whole of the Financial Year 2020-21 and Financial Year 2019-20.
3. Number of Permanent employees on the rolls of the Company as on 31st March, 2021:	19,952

 

4. Average percentile increase already made in the salaries of employees other than the Managerial Personnel in the last Financial Year i.e. 2020-21 and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:	For employees other than Managerial Personnel who were in employment for the whole of the Financial Year 2019-20 and Financial Year 2020-21, there is no increase in the average percentile. There is an average decrease of 15.86% for Financial Year 202021 for employees other than Managerial Personnel whereas the increase in the managerial remuneration for Financial Year 2020-21 is 8.45%.
Â	Justification:
Â	In view of the outbreak of COVID-19 pandemic, no increments were given to the employees and the Managerial Personnel during FY 2020-21.
Â	There is an increase in the remuneration of Managerial Personnel, mainly due to exercise of the ESOPs in FY 2020-21.
Â	The remuneration of the Vice-Chairman & Managing Director is decided based on the individual performance, inflation, prevailing industry trends and benchmarks.
Â	The remuneration of eligible Non-Executive Directors consists of commission and sitting fees. While deciding the remuneration, various factors such as Director's participation in Board and Committee Meetings during the year, other responsibilities undertaken, such as Membership or Chairmanship/ Chairpersonship of Committees, and such other factors as the Nomination and Remuneration Committee may deem fit etc., were taken into consideration.
5. Affirmation that the remuneration is as per the Remuneration Policy of the Company:	The remuneration paid/payable is as per the Policy on Remuneration of Directors and Remuneration Policy for Key Managerial Personnel and Employees of the Company.

Notes:

1]    The remuneration calculated is as per Section 2[78] of the Companies Act, 2013 and includes the perquisite value of Stock Options of the Company exercised during the year.

2]    The calculations are based on Employees who were on the rolls of the Company for the whole of the Financial Year 2019-20 and Financial Year 2020-21.

3]    On the recommendation of the Nomination and Remuneration Committee, the Board at its Meeting held on 28^th January, 2021 has increased the commission and sitting fees payable to the Independent Directors for attending the Board/Committee Meetings. This is commensurate with the increased responsibilities, contribution and time devoted by Independent Directors on various matters pertaining to the Company.

Mr. Ramesh Iyer, Vice-Chairman & Managing Director of the Company does not receive any remuneration or commission from its Holding Company.

Mr. Ramesh Iyer does not receive any commission from any of the subsidiaries of the Company. During the year under review, Mr. Ramesh Iyer has received remuneration from Mahindra Insurance Brokers Limited, the Company's Subsidiary in the form of Employees' Phantom Stock Options amounting to Rs. 88,51,570.

Mr. Ramesh Iyer has not exercised ESOPs of Mahindra Rural Housing Finance Limited, a subsidiary company, during the year, which were granted in the earlier year[s].

 

The Company had 23 employees who were in receipt of remuneration of not less than Rs. 1,02,00,000 during the year ended 31^st March, 2021 or not less than Rs. 8,50,000 per month during any part of the year.

Details of employee remuneration as required under provisions of Section 197 [12] of the Companies Act, 2013 read with Rule 5 [2] and 5 [3] of Companies [Appointment and Remuneration of Managerial Personnel] Rules, 2014 are available on your Company's website and can be accessed at the web-link: https://www.mahindrafinance. com/investor-zone/financial-information.

Any Member interested in obtaining a copy of the same may write to the Company Secretary at the investor Email Id: [e-mail].

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company is an equal opportunity employer and is committed to ensuring that the work environment at all its locations is conducive to fair, safe and harmonious relations between employees. It strongly believes in upholding the dignity of all its employees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictly prohibited.

The Company has in place a detailed Policy in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, ('POSH Act') and Rules made thereunder, to prevent sexual harassment of its employees.

All employees (permanent, contractual, temporary and trainees) are covered under this Policy. The Policy has been widely communicated internally and is placed on the Company's intranet portal. The Company ensures that no employee is disadvantaged by way of gender discrimination.

The POSH Policy is also available on the website of the Company and can be accessed at the web-link: https://www.mahindrafinance.com/investor-zone/ corporate-governance.

The Company has complied with the provisions relating to the constitution of the Internal Complaints Committee (ICC) under the POSH Act to redress complaints received regarding sexual harassment.

To ensure that all the employees are sensitised regarding issues of sexual harassment, the Company conducts an online Induction Training through the learning platform M-Drona covering topics on POSH awareness, reconciliation before filing POSH complaint(s) and consequences of filing false complaint(s).

The following is a summary of Sexual Harassment complaint(s) received and disposed off during the year 202021, pursuant to the POSH Act and Rules framed thereunder:

a)    Number of complaint(s) of Sexual Harassment received during the year: 2

b)    Number of complaint(s) disposed off during the year: 2

c)    Number of cases pending for more than 90 days: Nil

d)    Number of workshops/awareness programme against sexual harassment carried out:

•    Awareness program was conducted in which mailers and video on Prevention of Sexual Harassment at the work place along with the detailed POSH Policy was circulated to sensitise employees to uphold the dignity of their female colleagues at the workplace.

•    Online training program on “Sexual Harassment while Working from Home” and best practices at work for handling sexual harassment cases was organised for Members of the Internal Complaints Committee.

•    A program was conducted online for all women employees, to enhance awareness regarding the Company's POSH Policy.

•    Awareness program was conducted under the “Speak-up” campaign for the employees, in which awareness creating emails and wall papers on laptop/computer screens of all employees, were circulated, covering topics such as applicability of POSH Act to virtual office, raising a complaint under the POSH Act, etc.

e) Nature of action taken by the employer or District

Officer: Warning letter was issued to both the

respondents.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under sub-section (3) (m) of Section 134 of the Companies Act, 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014 are given as under :

(A) Conservation of Energy

(i) The steps taken or impact on conservation of energy:

The operations of your Company are not energy intensive. However, adequate measures have been initiated to reduce energy consumption.

Select few steps are listed:

a) Replacement of conventional lighting with Light Emitting Diode (LED) lighting:

The Company has installed LED lighting in Regional Offices of the Company during the

year under review and the same has been monitored in terms of electrical consumption and expenses. The Company extensively monitors its energy consumption and GHG emissions. Conservation of energy covers use of LED lights in new branches and retrofication to LED lights in Regional Offices.

b)    Replacement of old air-conditioning with updated version of machines with R-410A gas, which helps in reducing Ozone depletion. Your Company has taken the initiative to use environment friendly gas in Air Conditioners during the year.

c)    Reduction in water and energy consumption and recycling of waste paper generation at various locations.

During the year, the Company has sent 2,131 kgs. of waste generated at the Head Office for responsible disposal and recycling. In return it has received 11,195 Swachh Bharat Points which can be redeemed for environmentally friendly office stationary items from the vendor partner. Similarly, waste generation and recycling has been done at the Record Management Company for 2,896 boxes weighing total 16,500 kgs.

[ii]    The steps taken by the Company for utilising alternate sources of energy: Nil.

[iii]    The capital investment on energy conservation equipment: Nil.

(B) Technology Absorption

[i]    The efforts made towards technology absorption: Not Applicable.

(ii)    The benefits derived like product improvement, cost reduction, product development or import substitution: Not Applicable.

(iii)    In case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year): Not Applicable.

(a)    Details of Technology Imported;

(b)    Year of Import;

(c)    Whether the Technology has been fully absorbed;

(d)    if not fully absorbed, areas where absorption has not taken place, and the reasons thereof.

(iv)    Your Company has not incurred any expenditure on Research and Development during the year under review.

(C) Foreign Exchange Earnings and Outgo

Foreign Exchange earnings and outgo during the year under review are as follows:

Rs. in Crores

Total Foreign Exchange; Eam^ed and _For the Financial For the Financial ^Outgo    Year ended 31st Year ended 31st

March, 2021    March, 2020

Foreign Exchange Earnings    NIL    NIL

Foreign Exchange Outgo    16.14    20.14

For and    on behalf of the Board

Dr.    Anish Shah

Chairman

Place : Mumbai Date : 23^rd April, 2021

---

Mar 31, 2021

The Directors are pleased to present their Thirty-First Report together with the Audited Financial Statements of your Company for the Financial Year ended 31^st March, 2021.

The performance highlights and summarised financial results of the Company are given below:

PERFORMANCE HIGHLIGHTS

Consolidated income for the year increased by 1.5% to Rs. 12,170.5 Crores as compared to Rs. 11,996.5 Crores in 2019-20;

Consolidated income from operations for the year was Rs. 12,050.3 Crores as compared to Rs. 11,883.0 Crores in 2019-20, a growth of 1.4%;

Consolidated profit before tax for the year was Rs. 934.1 Crores as compared to Rs. 1,602.0 Crores in 2019-20;

Consolidated profit after tax and non-controlling interest for the year was Rs. 773.2 Crores as compared to Rs. 1,075.1 Crores in 2019-20.

FINANCIAL RESULTS

Â	CONSOLIDATED March 2021 March 2020		Rs. in Crores STANDALONE March 2021 March 2020
Total Income	12,170.5	11,996.5	10,516.8	10,245.1
Less: Finance Costs	5,307.6	5,390.6	4,733.2	4,828.8
Expenditure	6,046.4	4,902.9	5,241.4	3,954.3
Depreciation, Amortization and Impairment	150.5	146.9	125.9	118.3
Total Expenses	11,504.4	10,440.3	10,100.5	8,901.4
Profit before exceptional items and taxes	666.1	1,556.1	416.3	1,343.8
Share of Profit of Associates & Joint Ventures	39.5	45.9	-	-
Exceptional items	228.5	-	6.1	-
Profit Before Tax	934.1	1,602.0	422.4	1,343.8
Less: Provision for Tax
Current Tax	512.3	647.3	450.3	556.9
Deferred Tax	(340.9)	(129.9)	(347.5)	(119.6)
(Excess) / Short provision for Income Tax - earlier years	(17.6)	(1.2)	(15.5)	-
Profit After Tax for the Year	780.3	1,085.8	335.2	906.4
Less: Profit for the year attributable to Non-Controlling	7.1	10.7	Â	Â
interests	Â	Â	Â	Â
Profit for the year attributable to Owners of the Company	773.2	1,075.2	335.2	906.4
Balance of profit brought forward from earlier years	4,578.0	3,957.3	4,293.6	3,834.0
Add: Other Comprehensive Income/(Loss)	(18)	(14.7)	(2.4)	(11.3)
Add: Transfer from Debenture Redemption Reserve	-	223.7	-	223.7
Balance available for appropriation	5,349.4	5,241.4	4,626.4	4,952.8
Less: Appropriations
Dividend paid on Equity Shares (including tax thereon)	-	484.2	-	477.9
Transfer to Statutory Reserves	98.8	222.8	68.0	181.3
Add/Less: Other Adjustments:
Gross obligation at fair value to acquire non-controlling	35.4	43.6	Â	Â
interest	Â	Â	Â	Â
Changes in Group's Interest	(10)	-	-	-
Balance profit carried forward to balance sheet	5,285.0	4,578.0	4,558.4	4,293.6

TRANSFER TO RESERVES

The Company proposes to transfer an amount of Rs. 68.0 Crores to the Statutory Reserve. Further, the Board of your Company decided not to transfer any amount to the General Reserve for the year under review. An amount of Rs. 4,558.4 Crores is proposed to be retained in the Statement of Profit and Loss.

DIVIDEND

Your Directors are pleased to recommend a dividend of Re. 0.80 per Equity Share of the face value of Rs. 2 each, payable to those Members whose names appear in the Register of Members as on the Book Closure date. Dividend is subject to approval of Members at the ensuing Annual General Meeting and shall be subject to deduction of tax at source.

The Equity dividend outgo for the Financial Year 2020-21 would absorb a sum of Rs. 98.8 Crores.

The dividend pay-out is in accordance with the Company's Dividend Distribution Policy.

DIVIDEND DISTRIBUTION POLICY

The Dividend Distribution Policy, containing the requirements prescribed in Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is appended as “Annexure I” and forms part of this Annual Report.

The Dividend Distribution Policy can also be accessed on the Company's website at the web-link: https:// mahindrafinance.com/discover-mahindra-finance/ policies.

During the year, an amount of Rs. 7,13,234 being the unclaimed/unpaid dividend of the Company for the Financial Year ended 31^st March, 2013 was transferred in September, 2020 to the Investor Education and Protection Fund Authority.

OPERATIONS

The year under review has been one of the most challenging years both for your Company and its customers. The COVID-19 pandemic outbreak which began in the middle of March 2020 continued to impact the economy throughout the financial year 2020-21. The year was full of uncertainties with slowdown in activities on the ground. The world was introduced to the new normal of lockdowns, containment zones, work from home with restricted movements of people and goods. The nationwide transport system came to a grinding halt as Air, Train and Road travel got severely impacted. This was a never seen before situation which

brought the economic activities in the country to a virtual standstill. The impact of the pandemic led to closure of almost all the Company's offices, business and recovery touch points and completely stalled the field operations from the last week of March 2020. Operations gradually resumed in mid-May in offices pan-India. Your Company has been strictly adhering to lockdown announcements in accordance with the directives issued by the Central, State Government and Local Administration.

Your Company is primarily in the financing of Automobiles and Tractors and addresses customers who use these vehicles for earning their livelihood. Your Company remains a significant financier to its customers in semi-urban and rural geographies by providing a wide range of easy and affordable products and services designed to suit their cashflow cycles. Your Company expanded vide its channel connect with leading car dealers. Your Company has retained its leadership position in financing the Mahindra range of vehicles and tractors in addition to extending its lending to vehicles of other leading Auto Original Equipment Manufacturers (OEMs). Your Company has aggressively pursued financing of pre-owned vehicles and used tractors. The demand for both new and used automobiles for the second consecutive year saw a substantial dip due to subdued load factors, and supply side constraints leading to poor sentiments and thus a much lower demand. The overall business volumes continued to be low for the Company on the backdrop of certain segments like Taxi, school bus/ van, traders, tourist operators, contracting segments, sand & stone mining applications, etc., opting to refrain from purchasing new vehicles. This further led to overall lower disbursements by your Company. Simultaneously, the earnings of the customers covered in the above mentioned segments were severely impacted due to slowdown of the economy. Hence, the collections were also subdued during most parts of the year. The Regulator did provide timely moratorium which gave support to our customers by allowing them to defer the EMI's by a period of 6 months. A significant majority of our customers availed the benefit under this moratorium scheme. Your Company continued to partner with the customers during these difficult times and offered moratorium to all eligible customers. The agricultural sector was relatively less impacted as monsoons, water levels, yields, support prices were above average and hence resulted in decent farm based cashflows. The second half of the year witnessed some amount of normalcy returning to the market with unlocking of the country. This led to better collection efficiencies starting December 2020. The Government supported Emergency Credit Line Guarantee Scheme (ECLGS) was offered to all eligible customers in the second half of the fiscal to mitigate the difficulties of vehicle users in commercial applications. A few of your Company's

customers took benefit of this scheme to lubricate their working capital.

The Business model got stress-tested for an elongated period of extreme uncertainty on an all-India basis. The flexibility and the elasticity of the model is demonstrated by the return of near normal disbursements and high collection efficiencies in the fourth quarter, as the pandemic started easing out.

Building Blocks for Growth, Efficiency, Customer Experience

A.    Deeper Physical Reach

Your Company has an extensive pan-India distribution network with 1,388 offices spanning across 27 States and 7 Union Territories as of 31^st March, 2021. During the year under review, your Company enhanced its footprint into deeper rural pockets by adding another 156 new branches in its network towards the year-end. Your Company's widespread office network reduces its reliance on any one region in the country. The geographic diversification also mitigates some of the regional, climatic, and cyclical risks, such as heavy monsoons or droughts. In addition, the Company's extensive office network benefits from a decentralized approval system, which allows each office to grow its business organically as well as leverage its customer relationships by offering multiple financial products including distribution of insurance products and mutual funds. Your Company services multiple products through each of its offices, which reduces operating costs and improves total sales. Your Company believes that the challenges inherent in developing an effective office network in rural and semiurban areas have also created opportunities of catering to the diverse financial requirements of its customers by identifying and understanding the needs and aspirations of the people.

B.    Enhancing Digital Reach

Your Company has an enhanced on-line and in-mobile presence to provide a superior digital experience to its customers. Employees, customers and partners are being enabled digitally for all their needs and substantial progress has been made in this direction. Today, the entire lending process is digitally enabled, which has facilitated the EMI collections being received through Digital and on-line means. This year also saw that the challenge posed by the pandemic for collections was to an extent mitigated when customers extensively used our online and App based Digital Channels for making their monthly repayments. In the last quarter of the

fiscal, the total amount collected from the customers by digital means had gone up by 94% compared to the last quarter of the previous year. Your Company and its subsidiaries have embraced digital in performing different activities like customer acquisition, digitally enabled collections, offering Fixed Deposits, Mutual Funds and Insurance products.

C.    Leveraging Technology

Information Technology has enabled the automation and digitisation of processes across the organisation, empowering employees with the workflows and knowledge for efficiency and controls, and engendering newer business products, analytical models, and decision-making tools. The Company's digital channels of multi-lingual website, mobile app, and contact centre too are increasingly popular with the customers. Your Company has successfully leveraged enterprise technology platforms such as enterprise service bus, customer relationship management, mobile application management, data lake and business intelligence. It is at an advanced stage in upgrading its Loan Origination System and Loan Management System capabilities to meet the future growth requirements and to be able to seamlessly service its large customer base and partners in the rural and semi-urban geographies.

D.    Data as Competitive Advantage

Your Company's presence in the rural and semi-urban markets for more than 25 years, working with several profiles gives your Company a huge advantage, in applying Analytics and Artificial Intelligence (AI) on the data leading to customized personalized offerings that are designed and delivered with speed and lower risks. Your Company has launched its proprietary algorithms to offer faster loan approvals at dynamic interest rates to low risk customers which would help in gaining market share, improving portfolio quality and profitability. Customer acquisition, retention, cross selling, and collections will be substantially enhanced with the combined Integrated activation of Digital, Analytics and Technology.

E.    Growth Drivers for Future

Your Company is having several plans to expand its offerings to its customers for growth. Pre-owned Vehicles, used tractors and commercial vehicles have a large opportunity for growing within the vehicle segments while growing the market share for the Company's existing range of products.

Meeting the Non-vehicle Financial needs of customers in the rural and semi-urban regions is another area of opportunity. Products like Personal Loans, Consumer Loans, Farm Related Working Capital Loans, etc., will have a growth focus targeting our large existing customer bases as well as new customers. For this purpose, the Company has formed a strategic business unit (SBU) for its Fintech vertical which will focus on digital lending.

Leasing as a method of Specialized Financing of certain customer segments for both vehicle and beyond is also being set up. Leasing offers an emerging opportunity and will aid in expanding the Financing portfolio in the medium and long term.

SME Lending

The SME lending faced significant head winds during the year due to weak economic environment and slowdown in the auto segment. The COVID-19 pandemic resulted in disruptions across businesses and SMEs also underwent significant stress. As a matter of abundant caution, your Company curtailed disbursements in significantly stressed sectors and supported deserving clients with good track record. Consequently, the Assets Under Management as of March 2021 has de-grown by 34% in comparison to March 2020. Further, your Company focused on strengthening its systems to reduce risk and enhance customer centricity. Your Company also strengthened its product offerings and broadened its tie-ups with more OEMs. It is expected that with these measures your Company would be able to grow its book significantly once the economic activity picks up.

The total value of assets financed stood at Rs. 25,248.9 Crores as compared to Rs. 42,388.2 Crores in the previous year. Total Income grew by 2.7% at Rs. 10,516.8 Crores for the year ended 31^st March, 2021 as compared to Rs. 10,245.1 Crores for the previous year. Profit Before Tax (PBT) declined by 68.6% at Rs. 422.4 Crores as compared to Rs. 1,343.8 Crores for the previous year. Profit After Tax (PAT) declined by 63.0% at Rs. 335.2 Crores as compared to Rs. 906.4 Crores in the previous year. During the year under review, the Assets Under Management stood at Rs. 81,689 Crores as at 31^st March, 2021 as against Rs. 77,160 Crores as at 31^st March, 2020, a growth of 5.9%.

Despite the most difficult times the Gross Stage 3 loan assets stood at an absolute level of Rs. 5,786 Crores, almost the same as that on 31^st March, 2020 (Rs. 5,747 Crores). This was a resilient performance given the backdrop of tough macro conditions and severe logistical issues. However, as the disbursements slowed down in the aftermath of COVID-19 outbreak, the Gross Non-Performing Assets were at 9.0% of closing loan assets as on 31^st March,

2021, a tad higher against 8.4% as on 31^st March, 2020. The Company continued to reassess its credit exposures and made additional ECL overlay even during the year, which stood at Rs. 996 Crores as on 31^st March, 2021 as against Rs. 574 Crores as on 31^st March, 2020. Further, in accordance with the regulatory expectation of the Reserve Bank of India to bring down the Net Non-Performing Asset (NPA) ratio below 4%, the Company recorded an additional provision of Rs. 1,320 Crores during the fourth quarter on Stage 3 loans. Resultantly, the Net NPA ratio of the Company stood at 3.97% as at 31^st March, 2021 as against 5.98% as on 31^st March, 2020. The Stage 3 provisioning coverage ratio stood at 579% as compared to 31% in the previous year.

There has been no change in the nature of business of the Company during the year under review.

FINANCIAL PRODUCTS DISTRIBUTION

During the year under review, your Company has initiated activities to increase the sale of Third Party Products to its customers and increased the fee income of the Company. As a green initiative measure and for the convenience of its investors, your Company has recently launched an Investment portal to enable them to transact in Mutual Funds as well as Fixed Deposits of the Company. The portal is available on the website of the Company under the Investment tab. With the launch of this Investment Solutions portal, your Company aims to increase the sales of third party investment products via the digital route along with other channels such as its branch network and a dedicated team to sell these products to its clients.

The Company's Assets under Management for distribution of Mutual Fund Products (MFP) as on 31^st March, 2021 stood at Rs. 2,900 Crores, which grew 109% as compared to the AUM as on 31^st March, 2020. Further, sales of other Third Party Products such as mutual funds, insurance, bonds & debentures, etc., grew from Rs. 309 Crores in FY 2019-20 to Rs. 482 Crores in FY 2020-21, recording a growth of 56% over the corresponding period in the previous year. Your Company has also implemented a customer service process as well as a process for evaluation and recommendation of Mutual Fund schemes. All these initiatives will lead to an increase in fee based income in the coming years.

MORATORIUM OF LOANS

As mentioned in the previous Annual Report and in accordance with the Board approved Moratorium Policy read with the Reserve Bank of India ('RBI') guidelines dated 27^th March, 2020, 17^th April, 2020 and 23^rd May, 2020 relating to 'COVID-19 - Regulatory Package', your Company has granted moratorium up to six months on the payment of installments which became due between 1^st March,

2020 and 31^st August, 2020 to all eligible borrowers. This relaxation did not automatically trigger a significant increase in credit risk. During the year under review, 81% of the customers have availed of the moratorium facility offered by the Company.

The Government of India, Ministry of Finance, vide its notification dated 23^rd October, 2020, had announced COVID-19 Relief Scheme ('the Scheme') for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts as per the eligibility criteria and other aspects specified therein and irrespective of whether the RBI moratorium was availed or not. Accordingly, your Company has credited an ex-gratia amount of Rs. 110.27 Crores in the accounts of the eligible borrowers. The Company filed a claim with the State Bank of India for reimbursement of the said ex-gratia amount as specified in the notification and has received an amount of Rs. 109.28 Crores towards the same on 31^st March, 2021.

Further, in connection with the judgment of the Hon'ble Supreme Court of India in the matter of Small Scale Industrial Manufacturers Association vs LIOI & Ors. and other connected matters dated 23^rd March, 2021 and as advised by RBI vide its Circular No. RBI/2021-22/17 DOR. STR.REC.4/21.04.048/2021-22 dated 7^th April, 2021, and the Indian Banks' Association ('IBA') advisory letter dated 19^th April, 2021, your Company has put in place a Board approved Policy to refund/ adjust the 'interest on interest' charged to the borrowers, not covered under the Ex-gratia Scheme, for the moratorium period i.e. 1^st March, 2020 to 31^st August, 2020. The Company has made an estimated provision of Rs. 31.75 Crores as on 31^st March, 2021 towards this.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with the applicable provisions of the Master Direction issued by the Reserve Bank of India and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a detailed analysis of the Company's performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

CORPORATE GOVERNANCE

Your Company practices a culture that is built on core values and ethical governance practices. Your Company is committed to transparency in all its dealings and places high emphasis on business ethics.

In accordance with the applicable provisions of the Master Direction issued by the Reserve Bank of India and the

Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance along with a Certificate from Messrs. KSR & Co., Company Secretaries LLP regarding compliance with the conditions of Corporate Governance as stipulated in Regulations 17 to 27, clauses (b) to (i) of sub-regulation (2) of Regulation 46 and paragraphs C, D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of the Annual Report.

SHARE CAPITAL

The Members at their Extraordinary General Meeting held on 30^th June, 2020, have approved the increase in the Authorised Share Capital of the Company from Rs. 190,00,00,000 (Rupees One Hundred Ninety Crores) divided into 70,00,00,000 (Seventy Crores) Equity Shares of Rs. 2 (Rupees Two) each of the Company and 50,00,000 (Fifty Lakhs) Redeemable Preference Shares of Rs. 100 (Rupees Hundred) each of the Company to Rs. 550,00,00,000 (Rupees Five Hundred Fifty Crores) divided into 250,00,00,000 (Two Hundred Fifty Crores) Equity Shares of Rs. 2 (Rupees Two) each of the Company and 50,00,000 (Fifty Lakhs) Redeemable Preference Shares of Rs. 100 (Rupees Hundred) each of the Company by creation of additional 180,00,00,000 (One Hundred Eighty Crores) Equity Shares of Rs. 2 (Rupees Two) each.

Rights Issue of Equity Shares

During the year under review, your Company has allotted

61.77.64.960    Equity Shares of the face value of Rs. 2 each for cash at a price of Rs. 50 per Equity Share (including premium of Rs. 48 per Share) in the ratio of 1 (one) Rights Equity Share for every 1 (one) fully paid-up Equity Share of the Company, held by the eligible Equity Shareholders on the Record Date i.e. 23^rd July, 2020. The Issue opened on 28^th July, 2020, and closed on 11^th August, 2020. The Rights offering by your Company received a very satisfactory response, as seen by the high levels of subscription and strong participation from Shareholders and investors, and was over-subscribed approximately by 1.3 times of the Issue Size. The Company received the approval from Stock Exchanges for listing on 19^th August, 2020 and trading of Rights Equity Shares on 20^th August, 2020.

The proceeds from the Rights Issue have been fully utilised for the objects of the Rights Issue as mentioned in the Letter of Offer filed with the Securities and Exchange Board of India.

Consequently, pursuant to the allotment of Rights Shares on 17^th August, 2020, the issued, subscribed and paid-up Equity Share Capital of the Company stands increased from

61.77.64.960    Equity Shares to 123,55,29,920 Equity Shares of the face value of Rs.2 each, fully paid-up.

 

2020, an improvement of 1.1 percent over the previous prediction in October 2020. The silver lining remains the development and growing coverage of the vaccines which is lifting the sentiment.

The progress of the virus has been slowed with the help of social distancing, increase in availability of vaccines and treatment protocols. However, the health infrastructure of many countries is reeling under the pressure of second and third wave. New restrictions are introduced in countries facing such challenges indicating the recovery to be uneven and still in some distance.

Outlook

The global growth projected is at 6.0 percent in 2021, which thereafter moderates to 4.4 percent in 2022. A lot of this shall depend upon the path of health crisis and the coordinated policy actions taken to limit economic damage. The growth for advanced economies is projected at 5.1 percent in 2021 [vis-a-vis de-growth of -4.7% in 2020] compared to a growth of 6.7 percent in 2021 for emerging and developing economies [vis-a-vis de-growth of -2.2% in 2020].

With varied outlook for different countries, the macro policy objectives still remain as the need to overcome the existing health crisis and returning employment to normal levels. The expectation based on availability of vaccines suggest local transmission to reduce everywhere by end of 2022.

Domestic Economy

The scenario in the Indian economy is much like many other countries where a gradual improvement in macro indicators has been seen. The positives include the resilience demonstrated in rural demand which remained buoyant and had record agriculture production in FY 2020-21. Urban demand has gained strength on the backdrop of normalization of business activity.

The anticipated improvement in economic activity is however held back with new mutations resulting in renewed jump in COVID-19 cases. Associated local lockdowns, which are now prevalent in many States, shall dampen demand for contact intensive services, restrain growth and prolong the return to normalcy. The silver lining remains the expectation of normal monsoon in the current year.

RBI projects the real GDP growth for FY 2021-22 to be at 10.5 percent. These growth expectations may undergo a change as the decisions on lockdowns have increased across States with the number of cases in the second wave now surpassing the numbers during those seen in the previous peak.

[Source: IMF, RBI]

 

The issued, subscribed and paid-up Equity Share Capital as on 31^st March, 2021 was Rs. 247.11 Crores, comprising 123,55,29,920 Equity Shares of the face value of Rs. 2 each, fully paid-up.

During the year, the Company has not issued any sweat equity shares or equity shares with differential voting rights.

As on 31^st March, 2021, none of the Directors of the Company holds instruments convertible into Equity Shares of the Company.

STOCK OPTIONS

During the year under review, no Options were granted to Eligible Employees under the Mahindra & Mahindra Financial Services Limited Employees' Stock Option Scheme-2010 [“2010 Scheme”]. The Company does not have any scheme to fund its employees to purchase the shares of the Company. No employee has been issued stock options during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant.

The 2010 Scheme of the Company is in compliance with the Securities and Exchange Board of India [Share Based Employee Benefits] Regulations, 2014 [“SBEB Regulations”] and there were no material changes made to the said Scheme. A Certificate from Messrs. B S R & Co. LLP, Chartered Accountants, Statutory Auditors of the Company, pursuant to Regulation 13 of the SBEB Regulations would be available for inspection by the Members through electronic mode.

Voting rights on the Shares issued to employees under the aforesaid Scheme are either exercised by them directly or through their appointed proxy.

The details of the Employees' Stock Options and the Company's Employees' Stock Option Trust as required under the SBEB Regulations read with SEBI Circular CIR/CFD/ POLICY CELL/2/2015 dated 16^th June, 2015 have been uploaded on the Company's website and can be accessed at the web-link: https://mahindrafinance.com/investor-zone/financial-information.

ECONOMY

Global and Domestic Growth

With completion of one year of the pandemic, the work lying before administrations to provide health care and vaccines continues to remain daunting. The human toll and loss of economic activity caused by the pandemic is unprecedented which could have been much worse, but for the timely intervention and policy support provided across administrations. The global economic activity is estimated to have contracted by -3.3 percent in Calendar Year [CY]

Finance

During the first eight months of the year under review (Apr-Nov 2020), Retail price inflation continued to be higher than the RBI's upper margin of 6%. It fell sharply in November 2020 with food inflation coming down and has since moved up again but within the RBI's upper margin. Having reduced policy repo rate in the first quarter of FY 2021 from 4.40% to 4.00%, the RBI since then, has maintained status quo in the key policy rates, along with continuing an accommodative stance until necessary to sustain growth on a durable basis.

The Government of India and the Reserve Bank of India have taken a series of actions during the year which has assisted the financial sector including the NBFC industry to wither the pandemic storm. These included, amongst others, reducing the benchmark rates, announcing moratorium for six months, restructuring scheme for a set of eligible borrowers and long-term repo operations to make easier access to liquidity. These actions led to stabilization of the financial sector with significant liquidity buffers being maintained across companies.

At the start of the fiscal year [April 2020), 10-year G-Sec benchmark yields (6.45% GS 2029), was trading at 6.14% levels. The new benchmark (5.85% GS 2030) closed the year at 6.18%. The yields during the year remained range bound as policy actions aimed at ensuring steady supply of funds. During the year, the INR appreciated by 2.5 percent from INR 75.39 to INR 73.50 per USD after a sharp depreciation of 9.0 percent during the previous year.

Your Company has been identified as a “Large Corporate” under the framework provided by the Securities and Exchange Board of India and accordingly, has ensured that more than 25% of its incremental borrowings during the year was by way of issuance of Debt securities.

During the year under review, your Company continued with its diverse methods of sourcing funds in addition to regular borrowings like Secured and Unsecured Debentures, Term Loans, Fixed Deposits, Commercial Papers, etc., and maintained prudential Asset Liability match throughout the year. Your Company sourced long-term debentures and loans from banks and other institutions at attractive rates. Your Company continues to expand its borrowing profile by tapping into new lenders and geographies.

During the year, your Company has successfully completed 3 securitisation transactions aggregating to Rs.5,120.30 Crores and raised JPY 15 billion (Rs. 1,063.50 Crores) through External Commercial Borrowings.

Private Placement Issues of Non-Convertible Debentures

During the year under review, your Company issued Secured/Unsecured Redeemable Non-Convertible Debentures including Secured Redeemable Principal Protected Non-Convertible Market Linked Debentures (“NCDs”) and raised an amount aggregating to Rs. 4,815.90 Crores on a private placement basis, in various tranches. The NCDs are listed on the debt market segment of the BSE Limited.

Details of all the above-mentioned issues were provided to the Board on a periodic basis.

As specified in the respective offer documents, the funds raised from NCDs were utilised for various financing activities, onward lending, to repay existing indebtedness, working capital and general corporate purposes of the Company. Details of the end-use of funds were furnished to the Audit Committee on a quarterly basis.

The Company is in compliance with the applicable guidelines issued by the Reserve Bank of India, as amended from time to time.

The Company has been regular in making payments of principal and interest on all the NCDs issued by the Company on a private placement basis and through public issue. There are no NCDs which have not been claimed by investors or not paid by the Company after the date on which the NCDs became due for redemption.

Commercial Paper

As at 31^st March, 2021, the Company had Commercial Paper (CPs) with an outstanding amount (face value) of Rs. 500 Crores. CPs constituted 0.8% of the outstanding borrowings as at 31^st March, 2021. The CPs of the Company are listed on the debt market segment of the National Stock Exchange of India Limited.

Rupee Denominated Medium Term Note

Under the Company's Medium Term Note Programme, the Company has not raised any funds through Rupee denominated bonds during the year.

INVESTOR RELATIONS

Your Company has done multiple interactions with Domestic and International investors/analysts during the current year. Given the ongoing pandemic, all such meetings were

done through use of technology i.e. conference calls, videoconferencing. Your Company attended multiple investor meets organised by reputed Global and Domestic Broking Houses during the year, to communicate details of its performance, important regulatory and market developments and exchange of information. Roadshows were held during the year with Domestic and International investors on the backdrop of the Rights Issue undertaken to strengthen the Capital Adequacy. Quarterly and annual earnings calls were scheduled through structured conference calls to keep various stakeholders informed about the past performance and future outlook of the industry, especially those having a bearing on the Company. These interactions with institutional shareholders, fund managers and analysts are based on generally available information that is accessible to the public on a non-discriminatory basis. Your Company uploads the transcript of the quarterly earnings calls on its website which can be accessed by existing and potential investors and lenders. Your Company shall continue to make effective

Your Company believes in transparent communication and building a relationship of mutual understanding and trust. Your Company further ensures that critical information about the Company is available to all the investors by hosting such information on the Company's website.

CAPITAL ADEQUACY

As on 31^st March, 2021, the Capital to Risk Assets Ratio (CRAR) of your Company was 26.0% which is well above the minimum requirement of 15% CRAR prescribed by the Reserve Bank of India.

Out of the above, Tier I capital adequacy ratio stood at 22.2% and Tier II capital adequacy ratio stood at 3.8% respectively.

RBI GUIDELINES

The Company continues to comply with all the applicable regulations prescribed by the Reserve Bank of India (“RBI”), from time to time.

CREDIT RATING

Your Company believes that its credit rating and strong brand equity enables it to borrow funds at competitive rates. The credit rating details of the Company as on 31^st March, 2021 were as follows:

Rating Agency	Type of Instrument	Credit Rating*	Remarks
India Ratings & Research Private Limited	Commercial Paper Programme and Bank Facilities (Fund/Non-Fund Based Working Capital Limit)	IND A1 +	The 'A1'+ rating indicates the Highest Level of Rating. Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
Â	Long-term (incl. MLD) Debt instruments, Subordinated Debt Programme and Bank Facilities (Fund/Non-Fund Based Working Capital Limit)	IND AAA/Stable IND PP-MLD AAA emr/Stable	The 'AAA' ratings denote the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. 'PP-MLD' refers to Principal Protected Market Linked Debentures.
Â	Â	Â	Suffix "emr” denotes the exclusion of the embedded market risk from the rating.
CARE Ratings Limited	Long-term Debt Instruments and Subordinated Debt Programme	CARE AAA/Stable	The 'AAA' ratings denote the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk.
Brickwork Ratings India Private Limited	Long-term Subordinated Debt Programme	BWR AAA/Stable
CRISIL Ratings Limited	Fixed Deposit Programme	CRISIL FAAA/ Stable	Â
Â	Commercial Paper Programme and Bank Loan Facilities	CRISIL A1 +	The 'A1'+ rating indicates the Highest Level of Rating. Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
Â	Long-term Debt Instruments, Subordinated Debt Programme and Bank Loan Facilities	CRISIL AA+/ Stable	The 'AA+' rating indicates a high degree of safety with regard to timely payment of financial obligations. Such instruments carry very low credit risk.

ACHIEVEMENTS

Awards/Recognition received by your Company during the year are enumerated hereunder:

Marketing:

Won the Silver Award in the category of 'New on ground property of the year' at the Rural Marketing Association of India [Flame Awards] for the Gram Pravesh initiatives of the Company.

CSR & Sustainability:

Included in the renowned FTSE4Good Index Series for the second year.

Ranked 48^th amongst Top 100 Indian companies for Sustainability & CSR under Responsible Business Rankings 2020 by Futurescape.

Attained performance band: B in the Carbon Disclosure Project Assessment 2019-20.

Included in 'DJSI Sustainability Yearbook 2021'

Human Resources:

Recognized among “India's Best Workplaces in Career Management 2020” by Great Place to Work® Institute.

FIXED DEPOSITS AND LOANS/ ADVANCES

Your Company offers a wide range of Fixed Deposit schemes that cater to the investment needs of various classes of investors. These Deposits carry attractive interest rates with superior service enabled by robust processes and technology. In order to tap rural and semi-urban savings, your Company continues to expand its network and make its presence felt in the most remote areas of the country.

During the year, CRISIL has reaffirmed a rating of 'CRISIL FAAA/Stable' for your Company's Fixed Deposits. This rating represents the highest degree of safety regarding timely servicing of financial obligations and carries the lowest credit risk. Your Company's Deposits continue to be a preferred investment amongst the investors.

As on 31^st March, 2021, your Company has mobilised funds from Fixed Deposits to the tune of Rs. 9,481.16 Crores, with an investor base of over 1,96,278 investors.

Your Company continues to serve the investors by introducing several customer centric measures on an ongoing basis to further strengthen its processes in sync with the requirements of the Fixed Deposit holders. The

Company periodically communicates various intimations via SMS, e-mails, post, courier, etc., to its investors as well as sends reminder emails to Depositors whose TDS is likely to be deducted before any pay-out/accrual. Your Company also provides a digital platform for online application/renewal of deposits, online generation of TDS certificates from customer/broker portal and seamless investment process for employees.

During the year under review, your Company has rolled out several initiatives aimed at offering a superior customer experience. Some key ones are:

An integrated web portal has been developed to facilitate online application/online renewal of Fixed Deposits, Loan against FDs, profile updates, etc.

Online submission of Forms 15 G/15H by all eligible Depositors through the FD Customer portal is made available on the Company's website.

TDS certificate^] are made available in the Customer portal and Broker portal, in addition to the same being sent to the concerned Depositors, from time to time.

In order to offer various payment options to Depositors, more payment gateways have been added across various FD investment portals.

An advanced version of Customer Relationship Management [CRM] has been launched to record the queries, requests and complaints for future data analysis in order to enhance customer service.

An integrated service portal [E-Sarathi] has been introduced to address the queries of Depositors routed through the Channel Partners on real-time basis during working hours.

The process of recording Central Know Your Customer [CKYC] details of the Depositors has been strengthened by introducing various control measures.

As at 31^st March, 2021, 6,052 Deposits amounting to Rs. 5.41 Crores had matured for payment and remained unclaimed. The unclaimed Deposits have since reduced to 5,882 Deposits amounting to Rs. 5.17 Crores. There has been no default in repayment of Deposits or payment of interest during the year.

Your Company being a Non-Banking Financial Company, the disclosures required as per Rule 8 [5] [v] and [vi] of the Companies [Accounts] Rules, 2014 read with Sections 73 and 74 of the Companies Act, 2013, are not applicable to it.

The information pursuant to Clause 35[1] of Master Direction DNBR.PD.002/ 03.10.119/2016-17 dated 25^th

August, 2016 issued by the Reserve Bank of India on Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016, regarding unpaid/unclaimed public deposits as on 31^st March, 2021, is furnished below:

i.    total number of accounts of Public Deposits of the Company which have not been claimed by the depositors or not paid by the Company after the date on which the deposit became due for repayment: 6,052.

ii.    total amounts due under such accounts remaining unclaimed or unpaid beyond the dates referred to in clause (i) as aforesaid: Rs. 5,41,47,729.

Depositors were intimated regarding the maturity of deposits with a request to either renew or claim their Deposits. Your Company regularly sends letters/reminders via email to all those Fixed Deposit holders whose Deposits have matured as well as to those whose Deposits remain unclaimed. Where the Deposit remains unclaimed, followup action is also initiated through the concerned agent or branch.

Pursuant to Section 125(2) (i) of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('the IEPF Rules') as amended from time to time, matured Deposits remaining unclaimed for a period of seven years from the date they became due for payment are required to be transferred to the Investor Education and Protection Fund (IEPF) Authority established by the Central Government. Further, interest accrued on the matured deposits which remain unclaimed for a period of seven years from the date of payment will also be transferred to the IEPF under Section 125(2) (k). The concerned depositor can claim the Deposit and/or interest from the IEPF Authority by following the procedure laid down in the IEPF Rules.

During the year, an amount of Rs. 011 Crores has been transferred to the IEPF Authority.

During the year under review, the Company has not given any loans and advances in the nature of loans to its subsidiaries or associate(s) or loans and advances in the nature of loans to firms/companies in which Directors are interested.

Accordingly, the disclosure of particulars of loans/advances, etc., as required to be furnished in the Annual Accounts of the Company pursuant to Regulations 34 (3) and 53 (f) read with paragraph A of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable to the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS IN SECURITIES

Pursuant to Section 186(11) of the Companies Act, 2013 (“the Act”), the provisions of Section 186(4) of the Act requiring disclosure in the Financial Statements of the full particulars of the loans made and guarantees given or securities provided by a Non-Banking Financial Company in the ordinary course of its business and the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient of the loan or guarantee or security are exempted from disclosure in the Annual Report.

Further, pursuant to the provisions of Section 186(4) of the Act, the details of investments made by the Company are given in the Notes to the Financial Statements.

SUSTAINABILITY INITIATIVES

Sustainability has been deeply embedded in the Company's business model from the very beginning. At the heart of our organizational strategy is an inclusive business model which enables the residents of semi-urban and rural India to access formal channels of credit/finance, helping them create long-term value. In line with the Mahindra Group's motto: 'Rise for Good' your Company is also gearing up to be future ready by making sustainability and climate change an integral part of the business strategy and risk framework. Your Company has been enabling customers to meet their aspirations through a diversified portfolio of financial product offerings. It helps people build their homes through affordable housing finance solutions provided by Mahindra Rural Housing Finance Limited, secure their life and assets with insurance solutions facilitated by Mahindra Insurance Brokers Limited and offers investment options through its asset management subsidiary Mahindra Manulife Investment Management Private Limited. By providing the right set of opportunities and prospects in the remote areas, your Company has helped customers to forge ahead. The Company lays strong emphasis on customer centricity. Its customer base is spread across more than 3.80 lakh villages in India, with majority of them belonging to the 'Earn and Pay' segment.

Your Company commenced its journey towards reporting sustainability performance in 2008-09 through Mahindra Group's Sustainability Report and in the year 2012-13 the Company released its first standalone Sustainability Report. In FY 2019-20, the Company released its Eighth Sustainability Report with the theme “Positive & Promising”. The Report adheres to the Global Reporting Initiative's (GRI) Standards and is based on the Integrated Reporting framework. The Report is externally assured by KPMG.

The Content index has been checked by GRI and carries the GRI logo. FY 2019-20 was truly a year of building sustainable resilience for the Group Financial Services Sector. The “Positive & Promising” theme of the Report shows that despite a variety of challenges through the year, the Company collectively stayed true to its core purpose and values, helping its customers, teams and communities realize their true potential.

This Report is hosted on the Company's website and can be accessed at: https://mahindrafinance.com/ media/383687/mahindra-finance-sustainability-report-2019-20.pdf.

Your Company continued to focus on integrating Sustainability into the business practices and on building awareness for different stakeholders by taking various initiatives to engage them. In FY 2018-19, your Company became the 1^st Financial Company in India to be committed towards call to action for Science Based Targets.

The Science Based Targets initiative (SBTi) requires companies to publicly commit to setting carbon emission reduction targets that are in line with climate science.

Your Company was recognized for its Sustainability initiatives during the year under review, with the following accolades:

Included in the renowned FTSE4Good Emerging Markets Index series for ESG Performance for the 2^nd time. FTSE4Good is an equity index series that is designed to facilitate investment in companies that meet globally recognised corporate responsibility standards. It is designed to measure the performance of companies demonstrating strong Environmental, Social and Governance practices.

Ranked 48^th amongst Top 100 Indian companies for Sustainability & CSR under Responsible Business Rankings 2020 by Futurescape.

Included in the 'Dow Jones Sustainability Indices' Sustainability Yearbook 2021 (the only Indian Company among the Diversified Financial Services Companies to feature in the same).

Attained performance band “B” in the Carbon Disclosure Project (CDP) assessment 2020-21, greater than the Sector average and Asia Regional average.

Selected as the winner of the 'The Mahindra Group Sustainability Performance Award, 2020'.

Your Company's approach has been to make its environmental disclosure transparent, and accordingly,

 

it has been reporting disclosures and reports on its performance through the Carbon Disclosure Project (CDP) India since Financial Year 2011-12.

Sensitising the employees to a novel concept such as Sustainability has been one of the key initiatives of the Company during the year. Capacity building on Sustainability has been driven by Sustainability Courses on the learning platform. The Company launched a module on Human Rights in the reporting year and made it mandatory for all the employees. The Mahindra Group and the United Nations have partnered to offer a Course on Climate change for its employees.

During the year, your Company made proactive efforts to reduce CO2 emissions (carbon footprint) through Project “Mahindra Hariyali” by planting more than 30,000 saplings throughout the country.

Your Company is gearing up to be future ready by making sustainability and climate change an integral part of its risk framework and taking measures to mitigate and manage them. In the reporting year, the Company has enhanced its existing Risk Register by including applicable Climate change risks. Weather reports are assessed on a regular basis and aligned with business operations to protect the customers and minimize the risk impact. The outlook for the future has been positive and your Company is well equipped to enable its customers and communities to progress through its inclusive and sustainable business model.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report (“BRR”) of your Company for the year 2020-21 forms part of this Annual Report as required under Regulation 34(2)(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is appended as “Annexure II”.

Your Company is building an inclusive organisation by empowering all the stakeholders and facilitating their contribution towards growth that is both holistic and long term. Through the inclusive business model, your Company endeavours to cater to the bottom of the pyramid in the rural and semi-urban areas, enabling them to earn their livelihood through varied financial products and services. Your Company has always been conscious of its role as a responsible corporate citizen. Through its wide network of branches with locally-recruited employees, strong and lasting relationships with its stakeholders, large customer base, vast experience and market knowledge, your Company is providing financial resources to underserviced regions of the country.

The BRR can also be accessed on the Company's website at: https://mahindrafinance.com/discover-mahindra-finance/sustainability.

INTEGRATED REPORTING

Your Company is pleased to present its first Integrated Report, which encompasses both financial and non-financial information to enable Members to have a more holistic understanding of the Company's long-term perspective. This Integrated Report forms part of the Annual Report and is in consonance with the SEBI Circular dated 6^th February, 2017 An Integrated Report takes corporate reporting beyond just discussing the financial resources, since any value creation activity requires other resources like people, natural resources and business relationships.

The Integrated Annual Report for the year 2020-21 includes details such as the organisation's strategy, governance framework, performance and prospects of value creation based on the six (6) forms of capital viz. financial capital, manufactured capital, intellectual capital, human capital, social and relationship capital and natural capital.

The Integrated Annual Report for the year 2020-21 is hosted on the Company's website and can be accessed at the web-link: https://www.mahindrafinance.com/investor-zone/financial-information/

Since 2012-13, the Company has been annually publishing a Sustainability Report conforming to the guidelines of the Global Reporting Initiative ("GRI”). These Reports adhere to the GRI standards and are based on the Integrated Reporting framework and have been externally assured. This year the Sustainability Report has been combined with the Integrated Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

With a vision to transform rural and semi-urban India into a self-reliant, flourishing landscape, Mahindra Finance started its journey in 1991 and grew into a leading NBFC with an employee base of around 20,000 employees all over India. By supporting about 23 NGOs and implementing partners in the areas of Education & Livelihood, Healthcare and Environment, the Company strives to become an asset in the communities where it operates. Your Company's Corporate Social Responsibility ['CSR'] initiatives are aligned with the mission of transforming rural lives and hence focus on areas such as Education & Livelihood, Healthcare and Environment.

In FY 2021, to consolidate and further strengthen its endeavor to support drivers, your Company launched its flagship program-"SWABHIMAAN a holistic driver development program”.

This program is initiated to address the professional, financial, and familial challenges faced by the drivers and their families and further contribute to their overall wellbeing. This multi-year program aims to benefit over 75,000 beneficiaries through key interventions focusing on various aspects of a driver's life. Your Company will provide driver's training to freshers, road safety training to existing drivers, auto mechanic training to women, financial planning workshops, accidental and health insurance policy to drivers and award scholarships to driver's children.

Your Company continued its support to People with Disabilities [PwDs] by training them under 'Hunnar' program in various skills in BFSI, hospitality and ITES sectors to enhance their employability. 365 people with disabilities were trained and 274 were placed in jobs. The Company also conducted awareness campaigns about sanitation and hygiene under Healthcare and Swachh Bharat initiatives.

Reaffirming its commitment to the cause of education, your Company continued its support to the Nanhi Kali Program which has benefitted over 10,800 underprivileged girl children from socially and economically marginalized families living in urban, rural, and tribal parts of India. Your Company, to promote inclusive socio-economic growth of the marginalized youth, continued its support to Mahindra Pride School which skilled 1,822 youth and 100% have been placed. Further, Mahindra Pride Classrooms supported an additional 20 hours of online training to 30,627 final year students covering English Speaking, Life Skills, Aptitude, Interview, Group Discussion and Digital Literacy through Polytechnics and Arts & Science Colleges.

To continue with its commitment to increase the green cover, your Company's employees participated in the Mahindra Hariyali project. Employees from most of the branches, planted more than 30,000 saplings in selected locations.

Your Company provided ration kits to more than 5,000 drivers and their families affected by the COVID-19 pandemic across multiple States in India.

Apart from the key thrust areas, your Company contributed funds for other causes such as preservation and promotion of the fine arts and culture and supporting orphanage homes, differently abled homes and homes for the elderly to re-affirm its pledge to strive for a better society.

During the year under review, your Company has spent Rs. 32.54 Crores towards Corporate Social Responsibility on various CSR projects and programs. This includes the contribution of Rs. 517 Crores made to PM Cares Fund in the Financial Year 2019-20, which has been off-set against the CSR spend of the Financial Year 2020-21 as per the Notification D.O. No 05/1/2020-CSR-MCA dated 30^th March, 2020 issued by the Ministry of Corporate Affairs. Your Company is in compliance with the statutory requirements in this regard.

CSR COMMITTEE

The Company has duly constituted a CSR Committee in accordance with Section 135 of the Companies Act, 2013 to assist the Board and the Company in fulfilling the corporate social responsibility objectives of the Company.

Consequent upon the resignation of Dr. Anish Shah as a Member of the Committee with effect from 16^th May, 2020 and cessation of Mr. V. Ravi, Member, as Executive Director & Chief Financial Officer of the Company with effect from 25^th July, 2020, the Committee presently comprises of the following Directors:

 

Name	Category
Mr. Dhananjay Mungale	- Chairman of the Committee (Independent Director)
Ms. Rama Bijapurkar	- Independent Director
Mr. Ramesh Iyer	- Vice-Chairman & Managing Director

 

During the year under review, 4 (four) CSR Committee Meetings were held, details of which are provided in the Corporate Governance Report.

CSR POLICY

During the year under review, the Board based on the recommendation of the CSR Committee, amended the CSR Policy to align the same in accordance with the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 and Section 135 of the Companies Act, 2013, as amended, effective from 22^nd January, 2021.

The revised CSR Policy is hosted on the Company's website and can be accessed at the web-link: https:// www.mahindrafinance.com/investor-zone/corporate-governance. The detailed Annual Report on the CSR activities undertaken by your Company during the year, as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is set out in “Annexure III” of this Report.

ANNUAL RETURN

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return as on 31^st March, 2021 in Form No. MGT-7, is available on the Company's website and can be accessed at the web-link: https://www.mahindrafinance.com/investor-zone/financial-information.

BOARD MEETINGS, EXTRAORDINARY GENERAL MEETING AND ANNUAL GENERAL MEETING

The calendar of the Board/Committee Meetings and the Annual General Meeting is circulated to the Directors in advance to enable them to plan their schedule for effective participation at the respective meetings. Additional Board Meetings are convened by giving appropriate notice to address business exigencies. Apart from Meetings, at times, certain decisions are taken by the Board/Committee(s) through Circular Resolutions, after a discussion over a conference call between Board/Committee Members.

All the decisions and urgent matters approved by way of Circular Resolutions/Circular Note are placed and noted at the subsequent Board/Committee Meeting(s).

The Board of Directors met seven times during the year under review, on 15^th May, 2020, 1^st June, 2020, 18^th July, 2020, 18^th September, 2020, 26^th October, 2020, 28^th January, 2021 and 5^th March, 2021. The requisite quorum was present for all the Meetings. The maximum time gap between any two Meetings was not more than one hundred and twenty days. These Meetings were well attended. The 30^th Annual General Meeting ('AGM') of the Company was held on 10^th August, 2020.

During the year under review, an Extraordinary General Meeting ('EGM') of the Members was held on 30^th June, 2020 to approve the increase in the Authorised Share Capital of the Company and consequential amendment(s) to the Capital Clause of the Memorandum of Association of the Company.

Detailed information on the Meetings of the Board, its Committees, EGM and the AGM is included in the Report on Corporate Governance, which forms part of this Annual Report.

MEETINGS OF INDEPENDENT DIRECTORS

The Independent Directors met twice during the year under review, on 13^th August, 2020 and 4^th March, 2021. The Meetings were conducted in an informal manner without the presence of the Whole-time Director(s), the Non-Executive Non-Independent Directors, or any other Management Personnel.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company has various Committees which have been constituted as a part of good corporate governance practices and the same are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

Audit Committee

As on 31^st March, 2021, the Audit Committee comprised of four Independent Directors and one Non-Executive NonIndependent Director:

Name	Category
Mr. C. B. Bhave	Chairman of the Committee (Independent Director)
Mr. Dhananjay Mungale	Independent Director
Ms. Rama Bijapurkar	Independent Director
Mr. Milind Sarwate	Independent Director
Dr. Anish Shah	Non-Fxec.iit.ive Non-Independent Director

Changes in Committee Members during the year:

•    Mr. V. S. Parthasarathy ceased to be a Member of the Committee consequent upon his resignation as a NonExecutive Non-Independent Director of the Company with effect from 18^th September, 2020.

•    Mr. Amit Raje, Non-Executive Non-Independent Director of the Company was appointed as a Member of the Committee with effect from 28^th January, 2021.

Pursuant to his appointment as a Whole-time Director of the Company with effect from 1^st April, 2021, and in order to be consistent with the principles of good governance, Mr. Amit Raje resigned as a Member of the Audit Committee with effect from 5^th March, 2021.

•    Mr. Arvind V. Sonde ceased to be a Member of the Committee consequent to his resignation as an Independent Director of the Company with effect from 15^th March, 2021.

During the year, 7 (seven) Audit Committee Meetings were held, details of which are provided in the Corporate Governance Report.

The recommendations of the Audit Committee were duly approved and accepted by the Board during the year under review.

Other Board Committees

The other Committees of the Board are:

i)    Nomination and Remuneration Committee

ii)    Stakeholders Relationship Committee

iii)    Corporate Social Responsibility Committee

iv)    Risk Management Committee

v)    Asset Liability Committee

vi)    IT Strategy Committee

vii)    Committee for Strategic Investments

The details with respect to the composition, powers, roles, terms of reference, Meetings held and attendance of the Directors at such Meetings of the relevant Committees are given in detail in the Report on Corporate Governance of the Company which forms part of this Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Chairman of the Board of Directors

i)    Resignation of Mr. Dhananjay Mungale as Chairman of the Board with effect from close of business hours on 1^st April, 2021

Mr. Dhananjay Mungale (DIN: 00007563) stepped down as the Chairman of the Board of Directors with effect from the close of business hours on 1^st April, 2021.

The Board has placed on record its deep appreciation of the contribution and valuable services rendered by Mr. Mungale during his association as Chairman of the Board since 2016.

Mr. Dhananjay Mungale continues to be an Independent Director of the Company.

ii)    Appointment of Dr. Anish Shah as Chairman of the Board of Directors with effect from 2^nd April, 2021

In the light of Mr. Dhananjay Mungale relinquishing his office as Chairman of the Board of Directors of the Company and on the recommendation of the Nomination and Remuneration Committee, the Board at its Meeting held on 28^th January, 2021, appointed Dr. Anish Shah (DIN: 02719429) as Non-Executive Chairman of the Board with effect from 2^nd April, 2021.

?r. Anish Shah is currently the Managing Director and Chief Executive Officer of Mahindra & Mahindra Limited ['M&M'], the Holding Company, with responsibility for the Group Corporate Office and full oversight of all businesses other than the Auto and Farm sectors of M&M.

Appointment/Re-Appointment of Directors Mr. Ramesh Iyer

Re-appointment of Mr. Ramesh Iyer, Managing Director designated as Vice-Chairman & Managing Director

Mr. Ramesh Iyer has been the Managing Director of the Company since 30^th April, 2001 and has played a key role in building Mahindra Finance into one of India's leading rural finance companies, since 1995.

In March 2016, Mr. Iyer was elevated as the Vice-Chairman & Managing Director of the Company.

The term of office of Mr. Ramesh Iyer, Vice-Chairman & Managing Director of the Company, expires on 29^th April, 2021.

On the recommendation of the Nomination and Remuneration Committee ['NRC'], the Board of Directors at its Meeting held on 23^rd April, 2021, has re-appointed Mr. Ramesh Iyer [DIN: 00220759] as the Managing Director, liable to retire by rotation, designated as Vice-Chairman & Managing Director for a period of 3 [three] years with effect from 30^th April, 2021 to 29^th April, 2024 [both days inclusive], subject to the approval of Members at the ensuing Annual General Meeting.

Mr. Amit Raje

Appointment of Mr. Amit Raje as a Non-Executive NonIndependent Director

Pursuant to the recommendation of the NRC, the Board at its Meeting held on 18^th September, 2020, appointed Mr. Amit Raje [DIN: 06809197] as an Additional Non-Executive NonIndependent Director of the Company with effect from 18^th September, 2020, liable to retire by rotation.

The Members of the Company have by means of an Ordinary Resolution passed on 3^rd March, 2021 vide Postal Ballot conducted through Remote E-voting mode, approved the appointment of Mr. Amit Raje as a Non-Executive NonIndependent Director of the Company.

Appointment of Mr. Amit Raje as Whole-time Director of the Company designated as “Chief Operating Officer Digital Finance - Digital Business Unit”

 

The Board of Directors of the Company at its Meeting held on 5^th March, 2021, has on the recommendation of the NRC, appointed Mr. Amit Raje as a Whole-time Director of the Company liable to retire by rotation, designated as “Chief Operating Officer Digital Finance -Digital Business Unit” for a period of 5 [five] years, with effect from 1^st April, 2021 till 31^st March, 2026 [both days inclusive], subject to approval of the Members at the ensuing Annual General Meeting.

Dr. Rebecca Nugent

Appointment of Dr. Rebecca Nugent as an Independent Director of the Company

Based on the recommendation of the NRC and on the proposal of the Board of Directors, Dr. Rebecca Nugent [DIN: 09033085] was appointed as an Independent Director of the Company, to hold office for a term of 5 [five] consecutive years commencing from 5^th March, 2021 to 4^th March, 2026 [both days inclusive], vide an Ordinary Resolution passed by the Members by means of a Postal Ballot through remote e-voting mode on 3^rd March, 2021.

Mr. Amit Kumar Sinha

Appointment of Mr. Amit Kumar Sinha as a Non-Executive Non-Independent Director

Pursuant to the recommendation of the NRC, the Board at its Meeting held on 23^rd April, 2021, appointed Mr. Amit Kumar Sinha [DIN: 09127387] as an Additional Non-Executive NonIndependent Director with effect from 23^rd April, 2021, to hold office up to the date of the ensuing Annual General Meeting ['AGM'] of the Company and thereafter, subject to the approval of the Members at the said AGM, as a NonExecutive Non-Independent Director, liable to retire by rotation.

The Company has received the requisite Notice from a Member in writing proposing his appointment as a Director of the Company.

Cessation of Directors

Mr. V. Ravi

As mentioned in the previous Annual Report, Mr. V. Ravi [DIN: 00307328] ceased to be the Executive Director & Chief Financial Officer of the Company upon completion of his tenure with effect from 25^th July, 2020. The Board has placed on record its deep appreciation of Mr. V. Ravi's immense contribution and valuable services during his long association with the Company and acknowledged Mr. Ravi's outstanding experience and expertise in serving

the Company including the Group's Financial Services Sector companies.

Mr. V. S. Parthasarathy

Resignation of Mr. V. S. Parthasarathy as Non-Executive Non-Independent Director of the Company

Mr. V. S. Parthasarathy (DIN: 00125299) resigned as Non-Executive Non-Independent Director with effect from 18^th September, 2020.

Consequently, Mr. V. S. Parthasarathy also ceased to be a Member of the Audit Committee, Nomination and Remuneration Committee, Risk Management Committee, Asset Liability Committee and Committee for Strategic Investments of the Board effective 18^th September, 2020.

Mr. Parthasarathy joined the Board of Directors of your Company in July 2014. The Board acknowledged Mr. V. S. Parthasarathy's contribution to the Company and has placed on record its appreciation of the invaluable services rendered by Mr. Parthasarathy during his association with the Company.

Mr. Arvind V. Sonde

Resignation of Mr. Arvind V. Sonde as an Independent Director of the Company

Mr. Arvind V. Sonde (DIN: 00053834) was appointed as an Independent Director of the Company by the Members through a Postal Ballot, with effect from 9^th December, 2019 for a term of five years.

Mr. Arvind V. Sonde resigned as a Member of the Board with effect from 15^th March, 2021, due to other professional and family commitments. Mr. Sonde has confirmed that there are no material reasons for his resignation, other than those mentioned in his resignation letter.

Subsequently, Mr. Arvind V. Sonde also ceased to be a Member of the Audit Committee and Risk Management Committee of the Board effective 15^th March, 2021.

The Board has placed on record its sincere appreciation of the valuable services rendered by Mr. Sonde as an Independent Director of the Company.

RETIREMENT BY ROTATION

Mr. Ramesh Iyer retires by rotation and, being eligible, offers himself for re-appointment at the 31^st Annual General Meeting of the Company scheduled to be held on 26^th July, 2021.

Re-appointment of Independent Directors

None of the Independent Directors of the Company is due for re-appointment.

Resignation of Independent Director(s)

During the year under review, except for Mr. Arvind V. Sonde, none of the Independent Directors of the Company had resigned before the expiry of his/her respective tenure(s).

Declaration by Directors

All the Directors of the Company have confirmed that they satisfy the “fit and proper” criteria as prescribed under Chapter XI of RBI Master Direction No. DNBR. PD.008/03.10.119/2016-17 dated 1^st September, 2016, as amended, and that they are not disqualified from being appointed/continuing as Directors in terms of Section 164(2) of the Companies Act, 2013.

Declaration by Independent Directors

All the Independent Directors of the Company have given their respective declarations/disclosures under Section 149(7) of the Companies Act, 2013 ('Act') and Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations') and have confirmed that they fulfill the criteria of Independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations, and have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.

Further, the Board after taking these declarations/ disclosures on record and acknowledging the veracity of the same, concluded that the Independent Directors are persons of integrity and possess the relevant proficiency, expertise and experience to qualify as Independent Directors of the Company and are Independent of the Management of the Company.

In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by the Indian Institute of Corporate Affairs, Manesar ('IICA'). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of 2 (two) years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption.

The Independent Directors of the Company except Dr. Rebecca Nugent, are exempt from the requirement to undertake the online proficiency self-assessment test conducted by IICA. Dr. Rebecca Nugent will be undertaking the said test in due course.

Key Managerial Personnel

The following persons 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:

Mr. Ramesh Iyer, Vice-Chairman & Managing Director.

Mr. Amit Raje, Whole-time Director of the Company designated as “Chief Operating Officer Digital Finance -Digital Business Unit”.

Mr. Vivek Karve, Chief Financial Officer of the Company and Group Financial Services Sector.

Ms. Arnavaz M. Pardiwalla, Company Secretary.

Changes in Key Managerial Personnel Chief Financial Officer

Mr. V. Ravi ceased to be the Chief Financial Officer of the Company on completion of his tenure as Executive Director & Chief Financial Officer with effect from 25^th July, 2020.

Based on the recommendations of the Nomination and Remuneration Committee and the Audit Committee, the Board of Directors of the Company at its Meeting held on 18^th July, 2020 appointed Mr. Vivek Karve as the Chief Financial Officer designated as 'Chief Financial Officer of the Company and Group Financial Services Sector' with effect from 14^th September, 2020.

Directors’ Responsibility Statement

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, (“the Act”) your Directors, based on the representations received from the Operating Management and after due enquiry, confirm that:

i.    in the preparation of the annual accounts for financial year ended 31^st March, 2021, the applicable accounting standards have been followed and there are no material departures in adoption of these standards.

ii.    they have in consultation with the Statutory Auditors selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and

 

fair view of the state of affairs of the Company as at 31^st March, 2021 and of the profit of the Company for the year ended on that date.

iii.    they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv.    they have prepared the annual accounts for financial year ended 31^st March, 2021 on a going concern basis.

v.    they have laid down adequate internal financial controls to be followed by the Company and that such internal financial controls were operating effectively during the financial year ended 31^st March, 2021.

vi.    they have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively during the financial year ended 31^st March, 2021.

Performance Evaluation of the Board

The Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“the Listing Regulations”) stipulate the evaluation of the performance of the Board, its Committees, Individual Directors and the Chairperson.

The Company has formulated a Policy for performance evaluation of the Independent Directors, the Board, its Committees and other individual Directors which includes criteria for performance evaluation of the Non-Executive Directors and Executive Directors.

The evaluation framework for assessing the performance of Directors comprises various key areas such as attendance at Board and Committee Meetings, quality of contribution to Board discussions and decisions, strategic insights or inputs regarding future growth of the Company and its performance, ability to challenge views in a constructive manner, knowledge acquired with regard to the Company's business/activities, understanding of industry and global trends, etc.

The evaluation involves self-evaluation by the Board Member and subsequent assessment by the Board of Directors. A member of the Board will not participate in the discussion of his/her evaluation.

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of 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 the Directors individually [including Independent Directors). The evaluation process was based on the affirmation received from the Independent Directors that they met the independence criteria as required under the Companies Act, 2013, and the Listing Regulations.

Feedback was sought by way of well-defined and structured questionnaires covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, areas of responsibility, execution and performance of specific duties, obligations and governance, compliance, oversight of Company's subsidiaries, etc., and the evaluation was carried out based on responses received from the Directors. The aspects of succession planning were also considered.

A separate exercise was carried out by the Nomination and Remuneration Committee of the Board to evaluate the performance of individual Directors who were evaluated on several parameters such as level of engagement and contribution, independence of judgment safeguarding the interest of the Company and its minority shareholders and knowledge acquired with regard to the Company's business/activities.

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 Directors and Non-Executive Directors.

The performance evaluation of the Independent Directors was carried out by the entire Board excluding the Director being evaluated.

The outcome of the Board Evaluation for the Financial Year 2020-21 was discussed by the Nomination and Remuneration Committee and the Board at their respective meetings held in April 2021. Qualitative comments and suggestions of Directors were taken into consideration by Mr. Dhananjay Mungale, former Chairman of the Board and Mr. C. B. Bhave, former Chairman of the Nomination and Remuneration Committee. The Directors have expressed their satisfaction with the evaluation process.

Familiarisation Programme for Independent Directors

The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the

Company and related matters along with details of number of programmes and number of hours spent by each of the Independent Directors during the Financial Year 2020-21, in terms of the requirements of SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015 are available on the website of the Company and can be accessed at the web-link: https://www.mahindrafinance.com/ media/383820/familiarisation-programme-for-the-f-y-2020-21-website-uploading.pdf

Policies on Appointment of Directors and Senior Management and Remuneration of Directors, Key Managerial Personnel and Employees

i)    Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management

In accordance with the provisions of Section 134[3] [e] of the Companies Act, 2013 [“the Act”] read with Section 178[2] of the Act and Regulation 17 of the SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015, your Company has adopted a Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management, which inter alia, includes the criteria for determining qualifications, positive attributes and independence of Directors, identification of persons who are qualified to become Directors and who may be appointed in the Senior Management team, succession planning for Directors and Senior Management, and the Talent Management framework of the Company.

This Policy is available at the Company's website at the web-link: https://mahindrafinance.com/investor-zone/corporate-governance.

ii)    Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel and Employees of the Company

Your Company has also adopted the Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel and Employees of the Company in accordance with the provisions of sub-section [4] of Section 178 of the Act.

Dr. Anish Shah has been appointed as the Non-Executive Chairman of the Board of Directors with effect from 2^nd April, 2021. Dr. Shah is in the whole-time employment of Mahindra & Mahindra Limited ['M&M'], the Holding Company and draws remuneration from it. Dr. Anish Shah is not paid any sitting fees or remuneration by the Company.

In view of the above, the Policy on Remuneration of Directors has been amended effective 2^nd April, 2021, in line with the aforesaid requirements and administrative changes.

The Policy on Remuneration of Directors, as amended, and the Remuneration Policy for Key Managerial Personnel and Employees of the Company, are appended as “Annexure IV-A” and “Annexure IV-B”, respectively, and form part of this Report. These Polices are also available at the Company's website at the web-link: https://mahindrafinance.com/investor-zone/corporate-governance.

The criteria for determining qualifications, positive attributes and independence of a Director and the Remuneration Policies for Directors, Key Managerial Personnel and other employees have been discussed in detail in the Report on Corporate Governance.

AUDITORS

Statutory Auditors

Messrs. B S R & Co. LLP, Chartered Accountants, (ICAI Firm Registration No.101248W/W-100022), were appointed as Statutory Auditors of the Company at the Twenty-seventh Annual General Meeting ('AGM') to hold office for a period of five consecutive years, commencing from the conclusion of the 27^th AGM held on 24^th July, 2017 till the conclusion of the 32^nd AGM of the Company to be held in the year 2022.

The Statutory Auditors have given a confirmation to the effect that they are eligible to continue with their appointment and that they have not been disqualified in any manner from continuing as Statutory Auditors. The remuneration payable to the Statutory Auditors shall be determined by the Board of Directors based on the recommendation of the Audit Committee.

The Report given by the Auditors on the Financial Statements of the Company for the Financial Year 2020-21 is a part of the Annual Report. The Report is unmodified and does not contain any qualification, reservation, adverse remark or disclaimer.

The Statutory Auditors were present at the last AGM. Secretarial Auditor

The Board of Directors of the Company has appointed Messrs. KSR & Co., Company Secretaries LLP to conduct the Secretarial Audit of the Company pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. In accordance with the

 

f provisions of sub-section (1) of Section 204, the Secretarial Audit Report for the Financial Year 2020-21 is appended to j this Report as “Annexure V”.

The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

l The Secretarial Auditor was present at the last AGM.

', Secretarial Audit of Material Unlisted Indian 3 Subsidiary

k Mahindra Rural Housing Finance Limited ('MRHFL), a ^- material subsidiary of the Company undertakes Secretarial Audit every year under Section 204 of the Companies Act, 2013. The Secretarial Audit of MRHFL for the Financial Year 2020-21 was carried out pursuant to Section 204 of the ¹Â Companies Act, 2013 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, ¹Â Â Â Â 2015. The Secretarial Audit Report of MRHFL submitted

by Messrs. KSR & Co., Company Secretaries LLP, does not contain any qualification, reservation or adverse remark or disclaimer. The Secretarial Audit Report is appended as “Annexure VI” and forms part of this Report.

i Cost Records and Cost Audit

³Â Maintenance of cost records and requirement of cost audit ¹Â as prescribed under the provisions of Section 148(1) of the ^ Companies Act, 2013 are not applicable in respect of the

¹Â business activities carried out by the Company. f

Reporting of Frauds by Auditors

3 During the year under review, the Statutory Auditors and t the Secretarial Auditor have not reported any instances i of frauds committed in the Company by its Officers or 3 Employees, to the Audit Committee under Section 143(12) j of the Companies Act, 2013, details of which need to be t mentioned in this Report.

PARTICULARS OF CONTRACTS OR f ARRANGEMENTS WITH RELATED _t^f PARTIES

” All contracts/arrangements/transactions entered into by the Company during the Financial Year with Related Parties were in the ordinary course of business and on an arm's length basis. During the year under review, your Company had not entered into any contract/arrangement/ transaction with Related Parties which could be considered ^ material in accordance with the Policy on Related Party ^t Transactions. Pursuant to Section 134 (3) (h) read with Rule ³Â Â Â Â 8 (2) of the Companies (Accounts) Rules, 2014, there are

* no transactions to be reported under Section 188 (1) of the ^f Companies Act, 2013. Accordingly, the disclosure of Related

3

provisions. Furthermore, credit losses may increase due to exposure to vulnerable sectors of the economy such as retail, hospitality and commercial real estate. The impact of the pandemic on the long-term prospects of businesses in these sectors is uncertain and may lead to significant credit losses on specific exposures, which may not be fully captured in ECL estimates.

Further, in accordance with the regulatory expectation of the Reserve Bank of India to bring down the Net Non-Performing Asset [NPA] ratio below 4%, which the Management has agreed with, the Company recorded an additional provision of Rs. 1,300 Crores during fourth quarter on Stage 3 loans.

The final impact of this pandemic and the Company's impairment loss allowance estimates are inherently uncertain, and hence, the actual impact may be different than that estimated based on the conditions prevailing as at the date of approval of these financial results. The management will continue to closely monitor the material changes in the macro-economic factors impacting the operations of the Company.

The continuing rapid spread of COVID-19 pandemic, emergence of new variants of the virus and the subsequent restrictions/control measures announced by the respective State Governments are the events which have continued till the date of the announcement of financial results of the Company. These uncertainties may adversely impact the Company's business operations in the future period.

Other than the above mentioned situation affecting the Company, there is no material change and commitment that have occurred after the closure of the Financial Year 2020-21 till the date of this Report, which would affect the financial position of your Company.

RISK MANAGEMENT POLICY

Your Company has a comprehensive Risk Management Policy in place and has laid down a well-defined risk management framework to identify, assess and monitor risks and strengthen controls to mitigate risks. Your Company has established procedures to periodically place before the Risk Management Committee and the Board of Directors, the risk assessment and minimisation procedures being followed by the Company and steps taken by it to mitigate these risks.

The Risk Management Policy, inter alia, includes identification therein of elements of risk, including Cyber Security and related risks as well as those risks which in the opinion of the Board may threaten the existence of the Company. The Risk management process has been established across

 

Party Transactions, as required under Section 134 [3] (h) of the Companies Act, 2013 in Form AOC-2 is not applicable to the Company.

The Policy on Related Party Transactions as approved by the Board of Directors of the Company is uploaded on the website of the Company and same can be accessed on the web-link: https://www.mahindrafinance.com/investor-zone/corporate-governance/.

Further details on the transactions with Related Parties are provided in the accompanying Financial Statements.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

The ongoing COVID-19 pandemic and its effect on the overall economy has impacted consumer sentiments and collections thus affecting the Company's performance, and the future effects of the outbreak remain uncertain. The outbreak has necessitated the Government to respond at unprecedented levels to protect public health, local economies and livelihoods. There remains a risk of subsequent waves of infection, as evidenced by the recently emerged variants of the virus. All these have substantially increased the estimation uncertainty in the preparation of the Financial Statements for the year ended 31^st March, 2021.

Your Company has developed various accounting estimates in these Financial Statements based on forecasts of economic conditions which reflect expectations and assumptions as at 31^st March, 2021 about future events that the management believe are reasonable under these circumstances. There is a considerable degree of judgement involved in preparing forecasts. The underlying assumptions are also subject to uncertainties which are often outside the control of the Company. Accordingly, actual economic conditions are likely to be different from those forecast since anticipated events frequently do not occur as expected, and the effect of those differences may significantly impact accounting estimates included in these Financial Statements.

The significant accounting estimates impacted by these forecasts and associated uncertainties are predominantly related to expected credit losses, fair value measurement, and recoverable amount assessments of non-financial assets.

Across the geographies and segments in which the Company operates, the COVID-19 outbreak has led to a worsening of economic conditions and increased uncertainty, which has been reflected in higher Expected Credit Loss ['ECL]

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. Your Company has a robust organisational structure for managing and reporting on risks.

The development and implementation of Risk Management Policy adopted by the Company is discussed in detail in the Management Discussion and Analysis chapter, which forms part of this Annual Report.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company promotes ethical behaviour in all its business activities and has established a vigil mechanism for its Directors, Employees and Stakeholders associated with the Company to report their genuine concerns. The Vigil Mechanism as envisaged in the Companies Act, 2013 and the Rules prescribed thereunder and the Listing Regulations is implemented through the Whistle Blower 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.

The Board at its Meeting held on 23^rd April, 2021 has pursuant to the recommendations of the Audit Committee, and in keeping with the changing Corporate Governance landscape, adopted a Revised Whistle Blower Policy of the Company.

As per the Whistle Blower Policy implemented by the Company, the Employees, Directors, customers, dealers, vendors, suppliers, or any Stakeholders associated with the Company are free to report illegal or unethical behaviour, actual or suspected fraud or violation of the Company's Codes of Conduct or Corporate Governance Policies or any improper activity to the Ethics Helpline Provider or the Chairperson of the Audit Committee of the Company or the Code of Conduct Committee. The Whistle Blower Policy also provides for reporting of insider trading violations as well as reporting of instances of leak of Unpublished Price Sensitive Information by the employees.

The Whistle Blower Policy provides for protected disclosure and protection to the Whistle Blower. Under the Whistle Blower Policy, the confidentiality of those reporting violation(s) is protected and they are not subject to any discriminatory practices. Protected disclosures can also be made by sending an email at the designated email id:

[e-mail] or any other mechanism as prescribed in the Whistle Blower Policy.

The Chairperson of the Audit Committee can be reached by sending a letter to the below address:

Chairperson of the Audit Committee Mahindra & Mahindra Financial Services Limited Mahindra Towers, 4^th Floor,

Dr. G. M. Bhosale Marg,

P. K. Kurne Chowk, Worli,

Mumbai - 400 018.

The Whistle Blower Policy has been appropriately communicated within the Company and is available on the website of your Company at the web-link: https://mahindrafinance.com/media/384157/vigil-mechanism.pdf.

The Audit Committee is apprised on the vigil mechanism on a periodic basis. During the year, no personnel have been denied access to the Audit Committee.

SUBSIDIARIES, JOINT VENTURE(S) AND ASSOCIATE(S)

The Company's Subsidiaries, Joint Venture(s) and Associate(s) continue to contribute to the overall growth in revenues and overall performance of your Company. A Report on the performance and financial position of each of the subsidiaries, joint venture(s) and the associate companies included in the Consolidated Financial Statements and their contribution to the overall performance of the Company, is provided in Form AOC-1 as ‘Annexure A’ to the Consolidated Financial Statements and forms part of this Annual Report.

Your Company has formulated a Policy for determining 'Material' Subsidiaries as defined in Regulation 16 of the Listing Regulations. This Policy has been hosted on the website of the Company and can be accessed at the web-link: https://mahindrafinance.com/investor-zone/ corporate-governance.

SUBSIDIARIES

Mahindra Insurance Brokers Limited

During the year under review, Mahindra Insurance Brokers Limited ('MIBL), the subsidiary in the business of Direct and Re-insurance Broking, serviced approximately 1.43 million insurance cases, for both Life and Non-Life Retail business. There is de-growth of 14% in Gross Premium facilitated for the Corporate and Retail business lines, decreasing from Rs. 2,431.89 Crores in the Financial Year 2019-20 to Rs. 2,101.06 Crores in the Financial Year 2020-21. The Total Income decreased by 20% from Rs. 336.89 Crores

in the Financial Year 2019-20 to Rs. 268.56 Crores in the Financial Year 2020-21. The Profit before Tax decreased by 40% from Rs. 73.90 Crores to Rs. 43.98 Crores and the Profit after Tax decreased by 40% from Rs. 53.36 Crores to Rs. 32.03 Crores during the same period. MIBL has been able to reach the benefit of insurance to over 3 lakh villages across India.

During the year, MIBL focused on improving manpower productivity and efficiency through automation projects. There is also a sharper focus on diversifying the customer base through additional distribution channel including the Point of Sales Person channel and the direct online sales through paybima.com. Though some of the planned investments in some of the business divisions were delayed, there is no change in the long term strategy of MIBL.

Mahindra Rural Housing Finance Limited

Mahindra Rural Housing Finance Limited ('MRHFL), the Company's subsidiary in the business of providing loans for purchase, renovation, construction of houses to individuals in the rural and semi-urban areas of the country, registered a total income of Rs. 1,454.7 Crores as compared to Rs. 1,527.6 Crores for the previous year, registering a decline of 4.8%. Profit before tax was 5% lower at Rs. 195.3 Crores as compared to Rs. 205.6 Crores for the previous year. Profit after tax was 1.6% higher at Rs. 151.0 Crores as compared to Rs. 148.6 Crores for the previous year.

During the year under review, MRHFL disbursed loans aggregating to Rs. 796.6 Crores as against Rs. 1,876.4 Crores in the previous year.

MRHFL continued its focus on serving customers in rural India. Majority of the loans disbursed were to customers in villages with an average annual household income of less than Rs. 2.00 lakhs. During the year under consideration, MRHFL disbursed home loans to around 34,559 households (in addition to around 10,45,898 existing households as on 31^st March, 2020). MRHFL has been expanding its geographical presence to provide affordable services for rural households.

Mahindra Manulife Investment Management Private Limited and Mahindra Manulife Trustee Private Limited

Equity Infusion by Manulife Investment Management (Singapore) Pte. Limited

As mentioned in the previous Annual Report, Manulife Investment Management (Singapore) Pte. Limited has acquired 49% of the equity share capital of Mahindra

Manulife Investment Management Private Limited [formerly nown as Mahindra Asset Management Company Private Jmited ('MAMCPL)] and Mahindra Manulife Trustee Private Jmited [formerly known as Mahindra Trustee Company Private Limited ('MTCPL')], then wholly-owned subsidiaries, pursuant to the execution of the Share Subscription Agreement and Shareholders' Agreement by and amongst :he Company, MAMCPL, MTCPL and Manulife on 21^st June, 019.

Consequent to the above, the shareholding of the Company n MAMCPL and MTCPL stood reduced from 100% to 51% pf the share capital, respectively.

rhe erstwhile names of MAMCPL and MTCPL have been changed to Mahindra Manulife Investment Management Private Limited and Mahindra Manulife Trustee Private Jmited respectively, with effect from 19^th May, 2020.

Mahindra Manulife Investment Management Private Limited

Mahindra Manulife Investment Management Private Limited 'MMIMPL) acts as an Investment Manager for the schemes pf Mahindra Manulife Mutual Fund. As on 31^st March, 2021, MMIMPL was acting as the Investment Manager for sixteen chemes.

rhe Average Assets under Management in these sixteen schemes were Rs. 5,249 Crores in March 2021 as compared :o Rs. 4,771 Crores in March 2020. Of these assets, Rs. 2,591 Crores were in equity schemes in March 2021 as compared to Rs. 1,616 Crores in March 2020. MMIMPL aas empanelled more than 15,600 distributors and opened 2,13,610 investor accounts in these schemes, recording a Jse of more than 12%.

During the year under consideration, the total income of MMIMPL was Rs. 30.5 Crores as compared to Rs. 17 Crores ^:or the previous year. The operations for the year under consideration have resulted in a loss of Rs. 26.7 Crores as against a loss of Rs. 37.9 Crores during the previous year.

Mahindra Manulife Trustee Private Limited

Mahindra Manulife Trustee Private Limited ('MMTPL) acts as the Trustee to Mahindra Manulife Mutual Fund.

During the year, MMTPL earned trusteeship fees of Rs. 33 _akhs and other income of Rs. 2.7 Lakhs as compared to Rs. 20.9 Lakhs and Rs. 1 Lakh respectively, for the previous /ear. MMTPL recorded a loss of Rs. 0.97 Lakh for the year under review as against a loss of Rs. 1.8 Lakhs in the previous year.

Mahindra Finance CSR Foundation

Mahindra Finance CSR Foundation was incorporated on 2^nd April, 2019 as a wholly-owned subsidiary of the Company registered under Section 8 of the Companies Act, 2013, to promote and support CSR projects and activities. The CSR Foundation is focused on identifying need-based and long-term social impact interventions in cause areas such as health, education, employment & livelihood generation and environment.

In the current Financial Year, the Foundation has launched a flagship CSR program for one of the important stakeholders of your Company i.e. the Driver Community. It is aimed at providing a safety net to drivers and their family members from a holistic perspective and various interventions would be implemented in collaboration with local NGO partners in select States in India.

JOINT VENTURE/ASSOCIATE

Mahindra Finance USA LLC.

The joint venture company's disbursement registered a growth of 11.5% to USD 860.7 Million for the year ended 31^st March, 2021 as compared to USD 772.2 Million for the previous year.

Total Income declined by 10% to USD 61.9 Million for the year ended 31^st March, 2021 as compared to USD 68.8 Million for the previous year. Profit before tax was 77% higher at USD 23.4 Million as compared to USD 13.2 Million for the previous year. Profit after tax grew at a healthy rate of 82% to USD 175 Million as compared to USD 9.6 Million in the previous year.

Ideal Finance Limited (Sri Lanka)

In August, 2019, your Company entered into a Share Subscription, Share Purchase and Shareholders' Agreement with Ideal Finance Limited (Sri Lanka) ['Ideal Finance'] and its existing Shareholders to form and operate a Joint Venture in the financial services sector in Sri Lanka. The joint venture will capitalise on the Company's expertise of over 25 years in the financial services domain and Ideal Finance's domestic market knowledge to build a leading financial services business in Sri Lanka.

Till date your Company has acquired 38.20% stake in Ideal Finance for an amount equivalent to LKR 110 Crores (approximately Rs. 44 Crores). Your Company is committed to enhancing its equity stake in Ideal Finance up to 58.2% aggregating to an amount not exceeding LKR 200.3 Crores.

 

This joint venture will further strengthen your Company's presence in the financial services business. It will help your Company's growth in key emerging markets.

Names of Companies which have become or ceased to be Subsidiaries, Joint Ventures or Associate Companies during the year

During the year under review, no company has become or ceased to be a subsidiary, joint venture or associate of your Company.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company, its subsidiaries, associate(s) and joint ventures for the Financial Year 2020-21, prepared in accordance with the relevant provisions of the Companies Act, 2013 and applicable Indian Accounting Standards along with all relevant documents and the Auditors' Report form part of this Annual Report.

The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies, associate(s) and joint ventures.

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the Financial Statements of the Company, Consolidated Financial Statements along with relevant documents and separate annual accounts in respect of each of the subsidiaries are available on the website of the Company and can be accessed at the web-link: https:// www.mahindrafinance.com/investor-zone/financial-information.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY’S OPERATIONS IN FUTURE

There are no significant and material orders passed by the regulators or courts or tribunals that would impact the going concern status of the Company and its future operations.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Your Company has in place adequate internal financial controls with reference to the Financial Statements

commensurate with the size, scale and complexity of its operations.

Your Company uses various industry standard systems to enable, empower and engender businesses and also to maintain its Books of Account. The transactional controls built into these systems ensure appropriate segregation of duties, the appropriate level of approval mechanisms and maintenance of supporting records. The systems, Standard Operating Procedures and controls are reviewed by Management. These systems and controls are audited by Internal Auditors and their findings and recommendations are reviewed by the Audit Committee and the IT Strategy Committee of the Board of Directors which ensures the implementation.

Your Company's Internal Financial Controls were deployed through Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), that addresses material risks in your Company's operations and financial reporting objectives. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by The Institute of Chartered Accountants of India. The risk control matrices are reviewed on a yearly basis and control measures are tested and documented on a quarterly basis. The Company has during the year enhanced its IT systems making the ICFR process completely digital which has further enabled to strengthen its review and monitoring controls. Based on the results of such assessments carried out by Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.

Your Company recognises that Internal Financial Controls cannot provide absolute assurance of achieving financial, operational and compliance reporting objectives because of

 

its inherent limitations. Also, projections of any evaluation of the Internal Financial Controls to future periods are subject to the risk that the Internal Financial Control may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.

COMPLIANCE WITH THE PROVISIONS OF SECRETARIAL STANDARD - 1 AND SECRETARIAL STANDARD - 2

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

The applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to 'Meetings of the Board of Directors' and 'General Meetings', respectively, have been duly complied with, by your Company.

POLICIES

The details of the Key Policies adopted by the Company are mentioned at “Annexure VII” to the Board's Report.

GENERAL DISCLOSURE

During the year, the Company, in the capacity of a Financial Creditor, has filed two petitions before the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 for recovery of outstanding loans against its customers, being Corporate Debtors.

There was no instance of one-time settlement with any Bank or Financial Institution during the year under review.

PARTICULARS OF REMUNERATION AND RELATED DISCLOSURES

Disclosures with respect to the remuneration of Directors, Key Managerial Personnel and Employees as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are as under:

 

Sr. Disclosure Requirement	Â	Disclosure Details	Â	Â
No.	Name of Director/ KMP	Designation	Ratio of the remuneration of each Director to median remuneration of employees	% increase in Remuneration
1. Ratio of the remuneration of	Dr. Anish Shah*	Non-Executive Chairman (w.e.f. 2nd April, 2021)	N.A.	N.A.
each Director to the median remuneration of the employees of the Company for the Financial	Mr. Dhananjay Mungale** (Former Chairman)	Independent Director	15.96X	13.74
	Mr. C. B. Bhave	Independent Director	13.36X	21.04
	Ms. Rama Bijapurkar	Independent Director	12.39X	17.63
Year 2020-21 & Percentage increase in Remuneration of	Mr. Milind Sarwate	Independent Director	13.71X	25.08
	Mr. Arvind V. SondeA	Independent Director	11.25X	296.73
each Director, Chief	Dr. Rebecca Nugent#	Independent Director	1.02X	N.A.
Financial Officer and Company Secretary during the Financial Year 2020-21	Mr. V. S. Parthasarathy##	Non-Executive Non-Independent Director	N.A.	N.A.
	Mr. Ramesh Iyer	Vice-Chairman & Managing Director	254.06X	8.45
Â	Mr. Amit Raje$	Whole-time Director - Chief Operating Officer Digital Finance -Digital Business Unit	N.A.	N.A.
Â	Mr. V. Ravi$$	Former Executive Director & Chief Financial Officer	129.29X	7.26
Â	Mr. Vivek Karve@	Chief Financial Officer of the Company and Group Financial Services Sector	Â	N.A.
Â	Ms. Arnavaz M. Pardiwalla	Company Secretary & Compliance Officer	-	-13.47

 

* Dr. Anish Shah, Non-Executive Chairman, being in the whole-time employment of Mahindra & Mahindra Limited ('M&M’), the Holding Company, draws remuneration from it and does not receive any remuneration from the Company.

** Resigned as Chairman of the Board of Directors of the Company w.e.f. close of business hours on 1^st April, 2021. Mr. Mungale continues to be an Independent Director of the Company.

^A Resigned as an Independent Director of the Company with effect from 15^th March, 2021.

#    Appointed as an Independent Director of the Company with effect from 5^th March, 2021.

## Resigned as Non-Executive Non-Independent Director of the Company with effect from 18^th September, 2020. Mr. V. S. Parthasarathy being in the whole-time employment of M&M, did not receive any remuneration from the Company during the year.

$ Appointed as Non-Executive Non-Independent Director of the Company with effect from 18^th September, 2020. During F.Y. 202021, Mr. Amit Raje being in the whole-time employment of M&M, did not receive any remuneration from the Company.

Mr. Amit Raje has been appointed as a Whole-time Director of the Company, designated as Chief Operating Officer Digital Finance -Digital Business Unit with effect from 1^st April, 2021.

$$ Ceased to hold office as Executive Director & Chief Financial Officer of the Company with effect from 25^th July, 2020.

@ Appointed as Chief Financial Officer of the Company and Group Financial Services Sector with effect from 14^th September, 2020.

 

2. Percentage increase in the median Remuneration of employees in the Financial Year 2020-21:	There is no increase in the median remuneration of employees. There is a decrease of 16.09% in the median remuneration of employees, taking into consideration employees who were in employment for the whole of the Financial Year 2020-21 and Financial Year 2019-20.
3. Number of Permanent employees on the rolls of the Company as on 31st March, 2021:	19,952

 

4. Average percentile increase already made in the salaries of employees other than the Managerial Personnel in the last Financial Year i.e. 2020-21 and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:	For employees other than Managerial Personnel who were in employment for the whole of the Financial Year 2019-20 and Financial Year 2020-21, there is no increase in the average percentile. There is an average decrease of 15.86% for Financial Year 202021 for employees other than Managerial Personnel whereas the increase in the managerial remuneration for Financial Year 2020-21 is 8.45%.
Â	Justification:
Â	In view of the outbreak of COVID-19 pandemic, no increments were given to the employees and the Managerial Personnel during FY 2020-21.
Â	There is an increase in the remuneration of Managerial Personnel, mainly due to exercise of the ESOPs in FY 2020-21.
Â	The remuneration of the Vice-Chairman & Managing Director is decided based on the individual performance, inflation, prevailing industry trends and benchmarks.
Â	The remuneration of eligible Non-Executive Directors consists of commission and sitting fees. While deciding the remuneration, various factors such as Director's participation in Board and Committee Meetings during the year, other responsibilities undertaken, such as Membership or Chairmanship/ Chairpersonship of Committees, and such other factors as the Nomination and Remuneration Committee may deem fit etc., were taken into consideration.
5. Affirmation that the remuneration is as per the Remuneration Policy of the Company:	The remuneration paid/payable is as per the Policy on Remuneration of Directors and Remuneration Policy for Key Managerial Personnel and Employees of the Company.

Notes:

1]    The remuneration calculated is as per Section 2[78] of the Companies Act, 2013 and includes the perquisite value of Stock Options of the Company exercised during the year.

2]    The calculations are based on Employees who were on the rolls of the Company for the whole of the Financial Year 2019-20 and Financial Year 2020-21.

3]    On the recommendation of the Nomination and Remuneration Committee, the Board at its Meeting held on 28^th January, 2021 has increased the commission and sitting fees payable to the Independent Directors for attending the Board/Committee Meetings. This is commensurate with the increased responsibilities, contribution and time devoted by Independent Directors on various matters pertaining to the Company.

Mr. Ramesh Iyer, Vice-Chairman & Managing Director of the Company does not receive any remuneration or commission from its Holding Company.

Mr. Ramesh Iyer does not receive any commission from any of the subsidiaries of the Company. During the year under review, Mr. Ramesh Iyer has received remuneration from Mahindra Insurance Brokers Limited, the Company's Subsidiary in the form of Employees' Phantom Stock Options amounting to Rs. 88,51,570.

Mr. Ramesh Iyer has not exercised ESOPs of Mahindra Rural Housing Finance Limited, a subsidiary company, during the year, which were granted in the earlier year[s].

 

The Company had 23 employees who were in receipt of remuneration of not less than Rs. 1,02,00,000 during the year ended 31^st March, 2021 or not less than Rs. 8,50,000 per month during any part of the year.

Details of employee remuneration as required under provisions of Section 197 [12] of the Companies Act, 2013 read with Rule 5 [2] and 5 [3] of Companies [Appointment and Remuneration of Managerial Personnel] Rules, 2014 are available on your Company's website and can be accessed at the web-link: https://www.mahindrafinance. com/investor-zone/financial-information.

Any Member interested in obtaining a copy of the same may write to the Company Secretary at the investor Email Id: [e-mail].

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company is an equal opportunity employer and is committed to ensuring that the work environment at all its locations is conducive to fair, safe and harmonious relations between employees. It strongly believes in upholding the dignity of all its employees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictly prohibited.

The Company has in place a detailed Policy in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, ('POSH Act') and Rules made thereunder, to prevent sexual harassment of its employees.

All employees (permanent, contractual, temporary and trainees) are covered under this Policy. The Policy has been widely communicated internally and is placed on the Company's intranet portal. The Company ensures that no employee is disadvantaged by way of gender discrimination.

The POSH Policy is also available on the website of the Company and can be accessed at the web-link: https://www.mahindrafinance.com/investor-zone/ corporate-governance.

The Company has complied with the provisions relating to the constitution of the Internal Complaints Committee (ICC) under the POSH Act to redress complaints received regarding sexual harassment.

To ensure that all the employees are sensitised regarding issues of sexual harassment, the Company conducts an online Induction Training through the learning platform M-Drona covering topics on POSH awareness, reconciliation before filing POSH complaint(s) and consequences of filing false complaint(s).

The following is a summary of Sexual Harassment complaint(s) received and disposed off during the year 202021, pursuant to the POSH Act and Rules framed thereunder:

a)    Number of complaint(s) of Sexual Harassment received during the year: 2

b)    Number of complaint(s) disposed off during the year: 2

c)    Number of cases pending for more than 90 days: Nil

d)    Number of workshops/awareness programme against sexual harassment carried out:

•    Awareness program was conducted in which mailers and video on Prevention of Sexual Harassment at the work place along with the detailed POSH Policy was circulated to sensitise employees to uphold the dignity of their female colleagues at the workplace.

•    Online training program on “Sexual Harassment while Working from Home” and best practices at work for handling sexual harassment cases was organised for Members of the Internal Complaints Committee.

•    A program was conducted online for all women employees, to enhance awareness regarding the Company's POSH Policy.

•    Awareness program was conducted under the “Speak-up” campaign for the employees, in which awareness creating emails and wall papers on laptop/computer screens of all employees, were circulated, covering topics such as applicability of POSH Act to virtual office, raising a complaint under the POSH Act, etc.

e) Nature of action taken by the employer or District

Officer: Warning letter was issued to both the

respondents.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under sub-section (3) (m) of Section 134 of the Companies Act, 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014 are given as under :

(A) Conservation of Energy

(i) The steps taken or impact on conservation of energy:

The operations of your Company are not energy intensive. However, adequate measures have been initiated to reduce energy consumption.

Select few steps are listed:

a) Replacement of conventional lighting with Light Emitting Diode (LED) lighting:

The Company has installed LED lighting in Regional Offices of the Company during the

year under review and the same has been monitored in terms of electrical consumption and expenses. The Company extensively monitors its energy consumption and GHG emissions. Conservation of energy covers use of LED lights in new branches and retrofication to LED lights in Regional Offices.

b)    Replacement of old air-conditioning with updated version of machines with R-410A gas, which helps in reducing Ozone depletion. Your Company has taken the initiative to use environment friendly gas in Air Conditioners during the year.

c)    Reduction in water and energy consumption and recycling of waste paper generation at various locations.

During the year, the Company has sent 2,131 kgs. of waste generated at the Head Office for responsible disposal and recycling. In return it has received 11,195 Swachh Bharat Points which can be redeemed for environmentally friendly office stationary items from the vendor partner. Similarly, waste generation and recycling has been done at the Record Management Company for 2,896 boxes weighing total 16,500 kgs.

[ii]    The steps taken by the Company for utilising alternate sources of energy: Nil.

[iii]    The capital investment on energy conservation equipment: Nil.

(B) Technology Absorption

[i]    The efforts made towards technology absorption: Not Applicable.

(ii)    The benefits derived like product improvement, cost reduction, product development or import substitution: Not Applicable.

(iii)    In case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year): Not Applicable.

(a)    Details of Technology Imported;

(b)    Year of Import;

(c)    Whether the Technology has been fully absorbed;

(d)    if not fully absorbed, areas where absorption has not taken place, and the reasons thereof.

(iv)    Your Company has not incurred any expenditure on Research and Development during the year under review.

(C) Foreign Exchange Earnings and Outgo

Foreign Exchange earnings and outgo during the year under review are as follows:

Rs. in Crores

Total Foreign Exchange; Eam^ed and _For the Financial For the Financial ^Outgo    Year ended 31st Year ended 31st

March, 2021    March, 2020

Foreign Exchange Earnings    NIL    NIL

Foreign Exchange Outgo    16.14    20.14

For and    on behalf of the Board

Dr.    Anish Shah

Chairman

Place : Mumbai Date : 23^rd April, 2021

---

Mar 31, 2021

The Directors present their Report together with the audited financial statements of your Company for the year ended 31^st March, 2021.

A. FINANCIAL AND OPERATIONAL HIGHLIGHTS
(Rs. in crores)
Particulars	2021	2020
Revenue from Operations..............................	45,041	45,488
Other Income..................................................	1,221	1,668
Profit before Depreciation, Finance Costs, Exceptional items and Taxation.....................	7,727	7,466
Less: Depreciation, Amortisation and Impairment Expenses ............................	2,233	2,223
Profit before Finance Costs, Exceptional items and Taxation .........................................	5,494	5,243
Less: Finance Costs..........................................	371	113
Profit before Exceptional items and Taxation...	5,123	5,130
Add: Exceptional items...................................	(3,663)	(2,014)
Profit before Taxation....................................	1,460	3,116
Less: Tax Expense............................................	1,191	1,785
Profit for the year...........................................	269	1,331
Balance of profit for earlier years.................	29,102	28,967
Less: Transfer to Debenture Redemption Reserve ....................................................	_	_
Profits available for appropriation................	29,371	30,298
Add: Other Comprehensive Income/(Loss)* ..	(60)	(8)
Less: Dividend paid on Equity Shares............	292	1,057
Less: Income-tax on Dividend paid................	_	131
Balance carried forward.................................	29,019	29,102

* Remeasurement of (loss)/gain (net) on defined benefit plans, recognised as part of retained earnings.

Financial Year 2021 was one of the worst years for the Indian economy since independence. As per the Second Advanced Estimates of National Income released by the CSO, real economic activity is expected to have contracted by 6.5% during the fiscal as the COVID-19 pandemic took a toll on economic activity. This was the first instance of a contraction since the Financial Year 1980. Nominal per capita income fell quite sharply during the year.

The pandemic hit all segments of the economy quite hard with the manufacturing, construction and services

segments reporting large contractions during the fiscal. Agriculture, however, was the lone bright spot in the economy, growing by 3.6% in the Financial Year 2021. Rural areas were not hit as hard by COVID-19 vis-a-vis urban India. Besides, the Government also proactively intervened and supported this segment by way of cash and kind transfers, record food grain procurement, frontloading rural-related Government spending, hiking MGNREGA spending sharply, initiating a temporary rural works program for returnee migrants and ensuring ample supply of credit. All these measures provided support to the segment. India''s food grain output is estimated to have touched 305.4 million tonnes in Financial Year 2021 which is the highest level ever. Likewise, horticulture output is also pegged at a record level of 326.6 million tonnes during the year.

On the demand side, all drivers of economic activity fared poorly in the Financial Year 2021. Private consumption spending declined sharply owing to a fall in Household incomes while capital formation contracted as the private sector delayed investments owing to weak demand and low capacity utilisation levels. Exports also fell sharply with a contraction in world trade volumes owing to weak demand across the globe.

The Profit for the year before Depreciation, Finance Costs, Exceptional items and Taxation recorded an increase of 3.5% at Rs. 7,727 crores as against Rs. 7,466 crores in the previous year. Profit after tax decreased by 79.8% at Rs. 269 crores as against Rs. 1,331 crores in the previous year.

Your Company continues with its rigorous cost restructuring exercises and efficiency improvements which have resulted in significant savings through continued focus on cost controls, process efficiencies and product innovations that exceed customer expectations in all areas thereby enabling the Company to maintain profitable growth in the current economic scenario.

Details of Material Changes from the end of the Financial Year till the date of this Report

The rampant spread of the Second Wave of COVID-19 and Lockdowns enforced in various States/Parts of the Country coupled with disruption in the supply of oxygen for industrial use, demand and supply for Vehicles and Tractors is expected to be impacted temporarily.

In addition, on the supply side, global shortage of microprocessors (semi-conductors) used in Electronic Control Unit (ECUs) fitted in different components/aggregates for Vehicles continues to pose challenges to the smooth Production Schedules.

The Company''s estimated Sales Volume for the Quarter ending June 2021 is expected to be lower by 15-20% as compared to the fourth quarter of Financial Year 2020-21.

The Revenue and profitability will be impacted in line with the fall in Volumes as mentioned above. However, the Company is taking various cost optimisation measures to limit the adverse impact.

The Company is also carefully reviewing the demand and supply situation and re-calibrating its operations accordingly while protecting the interest of its customers, dealers and suppliers. The endeavour is to ensure optimal level of inventory at plants and dealerships in order to be prepared for a rebound in demand once the situation returns to normalcy.

Performance Review

Automotive Sector

Your Company''s Automotive Sector posted total sales of 3,48,621 vehicles (3,31,384 Passenger vehicles, commercial vehicles and 17,237 three-wheelers) as against a total of 4,71,141 vehicles (4,11,345 four-wheelers and 59,796 three-wheelers) in the previous year, registering a de-growth of 26.0%.

In the domestic market, your Company sold a total of 3,30,271 vehicles as compared to 4,44,218 vehicles in the previous year, resulting in a de-growth of 25.7%.

In the Passenger Vehicle (PV) segment, your Company sold 1,57,215 vehicles [including 1,55,530 Utility Vehicles (UVs), 1,676 Vans and 9 Cars] registering a de-growth of 15.9%, as compared to the previous year''s volume of 1,86,942 vehicles [including 1,79,405 UVs, 6,679 Vans and 858 Cars].

In the Commercial Vehicle (CV) segment, your Company sold 1,56,159 vehicles [including 23,789 vehicles <2T GVW, 1,28,100 vehicles between 2-3.5T GVW, 1,160 Light Commercial Vehicles (LCVs) in the LCV > 3.5T segment, 684 vehicles in the 7.5-16.2T GVW segment and 2,426 Heavy Commercial Vehicles (HCVs)] registering a de-growth of 21.6% over the previous year''s volume of 1,99,131 vehicles [including 36,475 vehicles < 2T GVW, 1,51,384 vehicles between 2-3.5T GVW, 5,415 LCVs in the LCV > 3.5T segment, 760 vehicles in the 7.5-16.2T GVW segment and 5,097 HCVs].

In the three-wheeler segment, your Company sold 16,897 three-wheelers, registering a de-growth of 70.9% over the previous year''s volume of 58,145 three-wheelers.

For the year under review, the Indian automotive industry (except 2W) de-grew by 15.3%, with the PV industry de-growth of 2.2% and CV industry degrowth of 20.8%. The UV segment was the only segment to show growth in Financial Year 2021 with 12.1%. Within the CV industry, the LCV goods <3.5T segment de-grew by 11.0% while the HCV goods segment de-grew by 14.5%.

Your Company''s UV volumes stood at 1,55,530 units, a de-growth of 13.3%. The UV market share for your Company stood at 14.7%. For the year under review, your Company''s PV volume stood at 1,57,215 units with a market share of 5.8%. The stylish and off-roader New Thar launched in October 2020, performed well in the UV segment with a volume of 14,186 units for the Financial Year 2021. Scorpio, XUV500 and Bolero continued to be strong brands for your Company in the UV segment.

In the LCV<3.5T segment, your Company retained its No.1 position with a 41.5% market share. Your Company sold a total of 1,51,889 vehicles in this segment. Your Company has a market share of 56.8% in the LCV 2-3.5T segment, which is the Pik-UP segment.

In the Medium and Heavy Commercial Segment (MHCV) segment, your Company sold 3,110 trucks as against 5,857 in the previous year. This is a de-growth of 46.9%. Your Company''s market share in the HCV segment stands at 2.8%.

Your Company is the pioneer for Electric Vehicles (EVs) in India, and for the year under review, sold (along with its subsidiary Mahindra Electric Mobility Limited) 5,418 EVs (27 four wheelers and 5,391 three-wheelers) as against 14,602 EVs (966 four wheelers and 13,636 three-wheelers) in the previous year.

During the year under review, your Company posted an export volume of 18,350 vehicles as against the previous year''s exports of 26,923 vehicles. This is a de-growth of 31.8%.

The spare parts sales for the year stood at Rs. 2,165.3 crores (including exports of Rs. 133.5 crores) as compared to Rs. 2,494.5 crores (including exports of Rs. 230.8 crores) in the previous year, registering a de-growth of 13.2%.

Farm Equipment Sector

Your Company''s Farm Equipment Sector recorded total sales of 3,54,498 tractors (domestic export) as against 3,01,915 tractors sold in the previous year, registering a growth of 17.4%. This includes 3,067 tractors sold under the Trakstar brand, which is the third brand of your Company under the subsidiary Gromax Agri Equipment Limited.

For the year under review, the tractor industry in India recorded highest ever sales of 8,99,407 tractors, a growth of 26.9%. Tractor Industry recorded growth in Financial Year 2021 after a de-growth in Financial Year 2020.

In the domestic market, your Company sold 3,43,833 tractors (including Gromax Agri Equipment Limited), as compared to 2,91,901 tractors in the previous year, recording a growth of 17.8%. It is the highest ever volume sold for your Company. Given the COVID-19 situation, the Company faced constraints on supply chain and supplier capacity; hence market share is not a good performance indicator for Financial Year 2021. With the market share at 38.2%, the Company continues to be the market leader for the 38^th consecutive year. Your Company''s performance was supported by good performance of all products in the portfolio.

Your Company continues to focus on growing the farm mechanisation space, by offering affordable mechanisation solutions. The portfolio comprises of Rotavators, Cultivators, Harvesters, Rice transplanters, Balers and Sprayers.

For the year under review, your Company exported 10,665 tractors which is a growth of 6.5% over the previous year.

Spare parts net sales for the year stood at Rs. 758.2 crores (including exports of Rs. 48.8 crores) in Financial Year 2021 as compared to Rs. 718.2 crores (including exports of Rs. 42.4 crores) in the previous Financial year 2020, registering a growth of 5.6%.

Other Businesses Mahindra Powerol

Under the Powerol brand, your Company has been a leader in providing power back-up solutions to the telecom industry for over a decade. To cater to the

 

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changing customer needs, your Company continues to consolidate its presence in tele-infra management and in the energy management solutions space. In the overall genset business, your Company is No. 2 brand by volume, offering a wide range of solutions from Lower KVA range to mid to higher KVA range.

Your Company is also focusing on Gas Powered Gensets and presently offers solutions in 25 to 125 KVA range.

In addition to lowering emission, these gensets offer a significantly lower operating cost. This segment will be the future growth area.

With a focus on green energy solutions, your Company also offers Energy Storage Solutions powered with Lithium-ion batteries. These are for application in telecom towers and bank ATMs. With the evolving BS IV engine demands, your Company''s Industrial Equipment vertical has already taken the first mover advantage and introduced various nodes to its customers.

Despite the pandemic, Powerol was offering relentless service and support to emergency services like healthcare, telecom, etc.

Construction Equipment Business

For the year under review, your Company (under the Mahindra EarthMaster brand) sold 681 Backhoe Loaders (BHLs) as compared to 880 in the Financial Year 2020, which is a de-growth of 22.6%. The Construction Equipment industry recovered in the second quarter onwards. With the increasing focus and spend in infrastructure sector by the Government, the BHL market in India grew by 21% over the previous year.

Your Company also has presence in the road construction equipment business through motor graders (under the Mahindra RoadMaster brand). During the year under review, your Company sold 82 motor graders.

Two-Wheeler Business

In line with the strategy for the two-wheeler business, your Company through its subsidiary, Classic Legends Private Limited had reintroduced the iconic brand ''Jawa'' to the Indian market in the Financial Year 2019, with the launch of new range of JAWA motorcycles - Jawa and Jawa Forty-Two. A new addition to that range - JAWA Perak was launched in the Financial Year 2019-20 and the sale of the same started in the Financial Year 2020-21.

Current Year’s review

During the period 1^st April, 2021 to 27^th May, 2021, 43,414 vehicles were produced as against 2,656 vehicles and 38,959 vehicles were dispatched as against 2,700 vehicles during the corresponding period in the last year. During the same period 55,904 tractors were produced and 55,682 tractors dispatched as against 8,445 tractors produced and 9,307 tractors dispatched during the corresponding period in the previous year.

The world continues to recover from the biggest crisis it has faced in the modern times. Vaccination drives have been initiated across major economies since January 2021 and the pace of vaccination would be critical to support economic recovery in the medium term particularly as one country after another continue to reel under fresh waves of infections and newer strains of the virus. The IMF expects global economic activity to rebound with projections of a 6% growth in 2021 after a 3.3% contraction in 2020. The strength of the recovery varies across countries, depending upon the severity of the crisis, the extent of disruptions and the effectiveness of policy support.

The RBI expects India''s economic activity to rebound quite strongly, with a growth projection of 10.5% for the Financial Year 2022. Both, fiscal and monetary policy have lent support to India''s growth recovery in Financial Year 2021 and this support is expected to continue through Financial Year 2022. The Financial Year 2022 Union Budget clearly focused on growth, not just for now but also for the medium term with a laser focus on reviving investment demand. Government Capex has significantly higher multipliers than other forms of spending and would play an important role in substituting and even crowding in private investments in the economy at a time when private sector investment demand is likely to remain subdued. The RBI cut rates, infused significant liquidity and eased regulatory burden to support the economy and has guided that it would continue with the accommodative stance as long as necessary to sustain growth on a durable basis.

The ongoing second wave of infections since end-February 2021 with many States imposing localised lockdowns and restrictions and any future fresh waves of infections, like those seen in other major economies, impart downside risks and huge uncertainty to the growth trajectory. However, rapid mass vaccination and timely fiscal and monetary support could provide the necessary backstop to economic activity.

Finance

Financial Year 2020-21 was an unprecedented year by all means, as the outbreak of COVID-19 pandemic not only resulted in the loss of countless human lives, it also impacted the global trade and commerce severely. Most major economies entered recession during the year, as widespread lockdown measures to contain the spread of the pandemic brought business activities to a standstill. Leave aside interest rates, it was the year in which even ''oil'' treaded into the negative territory. The global output declined by 3.3% in the calendar year 2020, as per IMF estimates, and most of the major economies, except China, registered a negative growth.

In order to support the battered economies, Central Banks came to the forefront, announcing massive rate cuts and stimulus measures, doling out trillions of dollars to pump growth. Policy easing by the Central Banks was timely, swift, significant in scale and most importantly coordinated. Meanwhile, Central Governments juggled to maintain the right balance between containing the spread of the pandemic through strict lockdown measures and re-opening the economies to boost consumption.

Unfazed by the subdued business activity, the equity markets across the world roared back from the March 2020 lows and rose sharply during the later part of the year. The gains in the equity markets were driven by prospects of synchronous growth recovery in 2021-22, fuelled by sustained fiscal policy support and further aided by a global vaccination drive.

The year 2020 saw global bond yields plunge to record lows amidst large scale rate cuts and accommodative monetary policy stance of Central Banks to aid growth and counter the impact of COVID-19 pandemic. Yields have risen sharply since end-2020 across the globe, led by US, as inflation pressures are rising across. As Bond yields surge, markets are seen to be discounting the Central Banks'' assurances of continued accommodative monetary policy.

Commodity prices also witnessed an unabated rally during the year, with most of commodities touching record highs in the pandemic-stricken year. However, this was not before COVID-19 had caused widespread declines in commodity prices in the first half of Calendar Year 2020. The rally since then has been fuelled by a strong economic recovery in China, massive fiscal and monetary stimulus, stronger push towards renewable energy, supply side disruptions and the return of commodities as an asset class amidst economic uncertainty.

As the year 2020 drew to a close, the ramp up of global vaccination drive provided optimism about a strong vaccine-led growth recovery in 2021. However, this crisis will likely leave scars well into medium term as labour markets take time to heal, investment is held back by uncertainty and Balance Sheet problems. As per the latest IMF estimates, the global economy is expected to rebound by 6% in 2021 but would moderate to 4.4% in 2022 for the aforementioned reasons.

The global community still confronts extreme social and economic strain, with the rising human toll worldwide amidst the resurgence of COVID-19 wave. Moreover, burgeoning debt and deficits, rising inflation and impact of unwinding of quantitative easing are some key risks that persist.

On the domestic front, India also witnessed sharp slowdown during the year. The Central Government announced strict nationwide lockdown in March 2020, which was followed by several localized lockdowns across States during the course of the year.

Reserve Bank of India further cut repo rate by 40 bps in the Financial Year 2020-21, having already cut the rates by a cumulative of 160 bps in the preceding year. Moreover, RBI announced several liquidity boosting measures including targeted long-term repo operations, moratorium of loans, etc. The interest rates had fallen sharply in money market due to the liquidity glut, resulting in real lending rates to fall to decade lows.

Extraordinary, novel and out of box measures taken by Reserve Bank of India to mitigate the impact of pandemic have anchored financial stability and cushioned the damaging effects of COVID-19 on economic activity.

Indian economy experienced subdued 1^st half of Financial Year 2021, however it started seeing good recovery in 2^nd half of Financial Year 2021. Sensex reflected growth sentiments as it wrapped 2020 on a bullish note by gaining 16% from a record low of March 2020. However, after close to six months of a receding case count, India is witnessing a rise in the COVID-19 cases and the resultant partial/complete lockdowns by States, to counter the rising cases, is expected to dent the ongoing economic recovery.

The Financial Year 2020-21 has been a roller-coaster ride for the rupee due to COVID-19. The pandemic induced massive sell-off in the equity market led the rupee breach record low of 76.90. However, easing of lockdown restrictions, infusion of stimulus by Government and central banks all over the world, optimism over vaccine,

enthused investors resulting in sustained foreign fund inflows, helped rupee vault back to 72 zone.

In the Financial Year 2021, Foreign portfolio investment (FPI) in India was at a 6-year high with record inflows into the equity markets and marginal outflows from the debt markets. The total FPI inflows into the equity, debt and hybrid markets during the Financial Year 2021 was at $36.1 billion compared with the previous two years of outflows of $5.5 billion in the Financial Year 2019 and $3 billion in the Financial Year 2020.

Your Company continued to monitor the liquidity situation carefully. Given the unprecedented impact that COVID-19 had on the business, the Company borrowed funds to shore up liquidity as a precautionary measure. During the year, your Company raised long term borrowings of Rs. 5,536.59 crores by way of a mix of both, market instrument like Non-Convertible Debentures and Bank Loans. Additionally, short term borrowings of Rs. 2,376.90 crores were raised by issuance of Commercial Papers and availing of bank lines during the year. This ensured sufficient liquidity to manage the adverse effects of pandemic. Since the economic activity improved from June-July 2020, your Company saw robust operating cash flows. As the year drew close to an end, sufficient liquidity prompted pre/ repayment of some of the borrowings. During the year, your Company repaid Rs. 3,387.41 crores of the total borrowings (long term, short term borrowing and lease liabilities). As on 31^st March, 2021, Rs. 7,642.07 crores of Long-Term borrowing (including current maturities and lease liabilities) and Rs. 24.74 crores of Short Term borrowing was outstanding. With a high liquidity level of Rs. 10,743.89 crores as at 31^st March, 2021, your Company is better placed to tide over the impact of the re-surge in COVID-19 cases on the business, if any.

The Company''s Bankers continue to rate your Company as a prime customer and extend facilities/services at prime rates. Your Company follows a prudent financial policy and aims not to exceed an optimum financial gearing at any time. The Company''s total Debt to Equity Ratio is 0.22 as at 31^st March, 2021.

Your Company has been rated by CRISIL Limited ("CRISIL"), ICRA Limited ("ICRA"), India Ratings and Research Private Limited ("India Ratings") and CARE Ratings Limited ("CARE") for its Banking facilities. All have re-affirmed the highest credit rating for your Company''s Short Term facilities. For Long Term facilities and Non-Convertible Debenture ("NCD") programme, CRISIL, ICRA and India Ratings have re-affirmed their

credit ratings of CRISIL AAA/Stable, [ICRA]AAA (stable) and IND AAA/Stable for the respective facilities rated by them. With the above rating affirmations, your Company continues to enjoy the highest level of rating from all major rating agencies at the same time.

The AAA ratings indicate highest degree of safety regarding timely servicing of financial obligations and is also a vote of confidence reposed in your Company''s Management by the rating agencies. It is an acknowledgement of the strong credit profile of your Company over the years, resilience in earnings despite cyclical upturns/downturns, robust financial flexibility arising from the significant market value of its holdings and prudent management.

Your Company is a "Large Corporate" as per the criteria under SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/144 dated 26^th November, 2018.

Investor Relations (IR)

Your Company always believes in leading from the front with emerging best practices in IR and building a relationship of mutual understanding with domestic and foreign investors/analysts. In the Financial Year 2021, the year characterised by a lot of uncertainty amongst pandemic and lockdowns, your Company increased its interaction with investors through video and audio conference calls. The top management, including the Managing Director, Deputy Managing Director and Group CFO and Executive Director-Auto & Farm Sectors, spent significant time to interact with investors to communicate the strategic direction of the business, capital allocation policy and the way the Company was handling COVID-19 crisis. All the four quarterly earnings calls conducted during the year were also well attended by investors and analysts. Apart from the earning calls, the Company also had a special investor/analyst call to discuss the implications of strategic steps being taken by your Company.

During the year, your Company interacted with around 1,079 Indian and overseas investors and analysts (excluding quarterly earnings calls and specific event related calls). Your Company ensures that critical information about the Company is available to all the investors by uploading all such information on the Company''s website. Your Company also engages with investors on Environment, Social and Corporate Governance (ESG), which has received excellent feedback from investors and ESG analysts. Your Company was awarded The Institute of Chartered Accountants of India''s prestigious Gold Shield Award for its Integrated Annual Report of Financial Year 2020.

Dividend

As per the Dividend Distribution Policy, dividend payout would have to be determined based on available financial resources, investment requirements and taking into account optimal shareholder return. Within these parameters, the Company would endeavour to maintain a total dividend pay-out ratio in the range of 20% to 35% of the annual standalone Profits after Tax (PAT) of the Company.

Despite the pandemic, your Company was able to deliver a good operational performance during the period under review. While the performance has been good, the Profit After Tax was low on account of exceptional items.

Your Directors, considering the good performance, a strong cash flow and this being a milestone 75^th Year of your Company, decided to recommend a Dividend of Rs. 8.75 (175%) per Ordinary (Equity) Share of the face value of Rs. 5 each on the Share Capital out of the accumulated balance of retained earnings representing the accumulated surplus in the profit and loss account as at 31^st March, 2021.

The equity dividend outgo for the Financial Year 2020-21 would absorb a sum of Rs. 1,087.79 crores [as against Rs. 292.15 crores comprising the dividend of Rs. 2.35 per Ordinary (Equity) Share of the face value of Rs. 5 each for the previous year]. Dividend will be payable subject to approval of members at the ensuing Annual General Meeting and deduction of tax at source to those Shareholders whose names appear in the Register of Members as on the Book Closure Date. The Board of your Company decided not to transfer any amount to the General Reserve for the year under review.

Dividend Distribution Policy

The Dividend Distribution Policy containing the requirements mentioned in Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") is attached as Annexure I and forms part of this Annual Report.

The Consolidated Financial Statements of the Company, its subsidiaries, associates and joint ventures prepared in accordance with the Companies Act, 2013 and applicable Indian Accounting Standards along with all relevant

documents and the Auditors'' Report form part of this Annual Report. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies, associates and joint ventures.

The Financial Statements as stated above are also available on the website of the Company and can be accessed at the Web-link: https://www.mahindra.com/ resources/FY21/AnnualReport.zip

Subsidiary, Joint Venture and Associate Companies

The Mahindra Group Companies continue to contribute to the overall growth in revenues and overall performance of your Company.

Tech Mahindra Limited, Flagship Company in the IT Sector, has reported a consolidated operating revenue of Rs. 37,855 crores in the current year as compared to Rs. 36,868 crores in the previous year, an increase of 3%. Its consolidated profit after tax after non-controlling interests is Rs. 4,428 crores as compared to Rs. 4,033 crores in the previous year, registering an increase of 10%.

The Group''s finance company, Mahindra & Mahindra Financial Services Limited (Mahindra Finance), reported a consolidated operating income of Rs. 12,050 crores during the current year as compared to Rs. 11,883 crores in the previous year, registering a growth of 1%. The consolidated profit after tax after non-controlling interests for the year is Rs. 773 crores as compared to Rs. 1,075 crores in the previous year.

Mahindra Lifespace Developers Limited, the subsidiary in the business of real estate and infrastructure registered a consolidated operating income of Rs. 166 crores as compared to Rs. 611 crores in the previous year. The consolidated loss after tax after non-controlling interest for the year is Rs. 72 crores as compared to a loss of Rs. 193 crores in the previous year.

Mahindra Holidays & Resorts India Limited, the subsidiary in the business of timeshare registered a consolidated operating income of Rs. 1,730 crores as compared to Rs. 2,372 crores in the previous year. The consolidated loss after tax after non-controlling interests for the year is Rs. 13 crores as compared to a loss of Rs. 132 crores in the previous year.

Mahindra Logistics Limited, a listed subsidiary in the logistics business has registered a consolidated operating income of Rs. 3,264 crores as compared to Rs. 3,471 crores in the previous year. The consolidated profit after tax after non-controlling interests for the year is Rs. 30 crores as compared to Rs. 55 crores in the previous year.

Ssangyong Motor Company, the Korean subsidiary of the Company (under the Companies Act, 2013), treated as discontinued operation for the purpose of consolidation, has reported consolidated operating revenues of Rs. 18,763 crores in the current fiscal year (January 2020 to December 2020) as compared to Rs. 21,707 crores in the previous year. The consolidated loss after tax after non-controlling interests for the year is Rs. 3,208 crores as compared to a consolidated loss of Rs. 2,045 crores in the previous year.

The consolidated profit before exceptional item and tax for the year from continuing operations is Rs. 5,229 crores as against Rs. 4,832 crores in the previous year. The consolidated profit after tax after non-controlling interest and exceptional items for the year from

continuing operations is Rs. 3,347 crores as against Rs. 2,392 crores in the previous year.

The consolidated profit after tax after non-controlling interest and exceptional items for the year from

continuing and discontinued operations is Rs. 1,812 crores as against Rs. 127 crores in the previous year.

During the year under review, Sampo Rosenlew Oy ceased to be an Associate and became a Subsidiary of your Company.

Further, Martial Solren Private Limited, The Birmingham Small Arms Company Limited, BSA Corporation Limited and B.S.A. Motor Cycles Limited became Subsidiaries of your Company.

During the year under review, Graphic Research Design s.r.l., Divine Solren Private Limited, Mahindra Trucks and Buses Limited, Mahindra Automobile Distributor Private Limited, Mahindra First Choice Services Limited and Auto Digitech Private Limited ceased to be Subsidiaries of your Company.

During the year under review, Mahindra Asset Management Company Private Limited changed its name to Mahindra Manulife Investment Management Private Limited and Mahindra Trustee Company Private Limited changed its name to Mahindra Manulife Trustee Private Limited.

Further, Mahindra ''Electoral Trust'' Company, a Section 8 Company has converted itself into a Public Company and changed its name to Mahindra Publications Limited.

Subsequent to the year end, Mahindra Solarize Private Limited became a Subsidiary of your Company.

A Report on the performance and financial position of each of the subsidiaries, associates and joint venture companies included in the Consolidated Financial Statements and their contribution to the overall performance of the Company, is provided in Form AOC-1 and forms part of this Annual Report.

The Policy for determining material subsidiaries as approved by the Board is uploaded on the Company''s website and can be accessed in the Governance section at the Web-link https://www.mahindra.com/investors/ reports-and-filings

Merger of Mahindra Vehicle Manufacturers Limited into Mahindra & Mahindra Limited

As mentioned in the previous Annual Report, the Board of Directors of the Company at its Meeting held on 29^th May, 2019, subject to requisite approvals /consents, approved the Scheme of Merger by Absorption of Mahindra Vehicle Manufacturers Limited, a wholly owned subsidiary of the Company ("MVML") with the Company and their respective shareholders ("Scheme") under the provisions of sections 230 to 232 of the Companies Act, 2013. The Scheme is subject to receipt of approvals from Directorate of Industries, Maharashtra Industrial Development Corporation, National Company Law Tribunal, Mumbai Bench ("NCLT") and such other statutory / Government authorities as may be directed by the NCLT. The Appointed Date of the Scheme is 1^st April, 2019 and the entire assets and liabilities of MVML would be transferred to and recorded by the Company at book values. The entire share capital of MVML is held by the Company. Upon the Scheme being effective, all shares (''Preference and Equity'') held by the Company in MVML shall stand cancelled, without any further act or deed and no consideration shall be issued on merger. NCLT has approved the Scheme basis its Pronouncement of Order on 26^th April, 2021. However, the certified copy of the order is awaited.

Scheme of Merger by Absorption of Mahindra Trucks and Buses Limited and Mahindra Automobile Distributor Private Limited with Mahindra Two Wheelers Limited (“Scheme”)

The National Company Law Tribunal has approved the Scheme vide its order dated 30^th June, 2020. The Appointed Date of the Scheme is 1^st April, 2019 and the Scheme is effective from 31^st July, 2020. Pursuant to the Scheme becoming effective, Mahindra Trucks and Buses Limited and Mahindra Automobile Distributor Private Limited ceased to be subsidiaries of the Company.

Divestment of 100% stake in Mahindra First Choice Services Limited (“MFCS”) and Auto Digitech Private Limited (“ADPL”) by Mahindra Holdings Limited (“MHL”) to TVS Automobile Solutions Private Limited (“TASL”)

During the year, MHL, a 100% subsidiary of your Company agreed to divest its 100% stake in MFCS and ADPL to TASL for a consideration of Rs. 35 crores. Your Company invested the same amount in TASL for an upfront stake of around 2.76% and an earn-out right and potential. On 25^th February, 2021, your Company was allotted 3,32,195 Series IV Compulsorily Convertible Preference Shares ("CCPS") in TASL for Rs. 34.99 crores and consequently MHL divested 100% equity stake in MFCS and Optionally Convertible Redeemable Preference Shares held in ADPL to TASL. Accordingly, both MFCS and ADPL ceased to be subsidiaries of your Company. On 26^th February, 2021, the Company acquired additional 100 earn-out shares (i.e. Series V CCPS) for Rs. 0.01 crores.

Scheme of Merger by Absorption of Mahindra Electric Mobility Limited, a subsidiary of the Company with the Company and their respective Shareholders

The Board of Directors of the Company at its Meeting held on 26^th March, 2021, subject to requisite permissions/ approvals/consents, accorded its in-principle approval for consolidation of Mahindra Electric Mobility Limited ("MEML"), a subsidiary of the Company into the Company. This consolidation is part of the Company''s Electric Vehicle ("EV") strategy to simplify the structure and re-organise its EV operations into two focused verticals of Last Mile Mobility and EV Tech Centre. With the electric vehicle business at an inflection point and poised to grow exponentially, the realignment will help in providing resources and direction to realize targeted growth.

Subsequent to the year end, the Board of Directors of the Company at its Meeting held on 28^th May, 2021, subject to requisite approvals/consents, approved the Scheme of Merger by Absorption of MEML with the Company and their respective Shareholders ("Scheme") under sections 230 to 232 and other applicable provisions of the Companies Act, 2013. The Appointed Date of the Scheme is 1^st April, 2021 or such other date as may be directed or approved by the National Company Law Tribunal or any other appropriate authority. The entire assets and liabilities

of MEML would be transferred to and recorded by the Company as per applicable accounting standards. The Scheme provides for issue of Ordinary (Equity) Shares by the Company to the shareholders of MEML (other than the Company or subsidiary(ies) of the Company holding shares directly and jointly with its nominee shareholders).

The share exchange Ratio is 480 (Four Hundred and Eighty) Ordinary (Equity) Shares of Rs. 5 each fully paid-up of the Company for every 10,000 (Ten Thousand) Equity Shares of Rs. 10 each fully paid-up held in MEML as on Record Date. Fractional entitlements to be rounded off to the next higher whole number.

The shares held in MEML by the Company or its subsidiary(ies) directly and jointly with its nominee shareholders, shall be cancelled upon the Scheme becoming effective.

Additionally, the stock options held by the eligible ESOP holders of MEML as on the Record Date shall be substituted with ESOPs of the Company in accordance with the Scheme.

Scheme of Merger by Absorption of Mahindra Engineering and Chemical Products Limited, Retail Initiative Holdings Limited and Mahindra Retail Limited with the Company and their respective Shareholders

Subsequent to the year end, the Board of Directors of the Company at its Meeting held on 28^th May, 2021, subject to requisite approvals/consents, approved the Scheme of Merger by Absorption of Mahindra Engineering and Chemical Products Limited ("First Transferor Company" or "MECPL"), Retail Initiative Holdings Limited ("Second Transferor Company" or "RIHL") and Mahindra Retail Limited ("Third Transferor Company" or "MRL") (together referred to as ''Transferor Companies''), direct/indirect wholly owned subsidiaries of the Company, with the Company and their respective Shareholders ("Scheme") under sections 230 to 232 and other applicable provisions of the Companies Act, 2013. The Appointed Date of the Scheme would be 1^st April, 2021 or such other date as may be directed or approved by the National Company Law Tribunal or any other appropriate authority.

The entire assets and liabilities of MECPL, RIHL and MRL are to be transferred to and recorded by the Company at their carrying values. All inter-company balances and investments amongst MECPL, RIHL, MRL and the

Company will stand cancelled as a result of the proposed merger. The entire share capital of the Transferor Companies is held directly/indirectly by the Company. Upon the Scheme becoming effective, no shares of the Company shall be allotted in lieu or exchange of the holding of the Company in the First Transferor Company or one Transferor Company in another Transferor Company (held directly and jointly with its nominee shareholders) and accordingly, equity shares held in the Transferor Companies shall stand cancelled on the Effective Date without any further act, instrument or deed.

Investment in Carnot Technologies Private Limited

During the year, your Company increased its shareholding in Carnot Technologies Private Limited ("Carnot"), from 22.9% to 48.05% on a fully diluted basis, for an aggregate consideration of Rs. 12 crores comprising of primary infusion in the Company of Rs. 3 crores and secondary purchase from its shareholders of Rs. 9 crores. Carnot is an Indian Company engaged in the business of research and development, related to IOT based products and services. Carnot is expected to support the Company''s strategy by developing information technology solutions for its products, customers and businesses, especially for the Farm Equipment Sector.

Increase of stake in Sampo Rosenlew Oy, Finland (‘’Sampo”)

During the year, the Company''s voting rights in Sampo increased from 49.04% to 79.13%, through conversion of Compulsorily Convertible Preference Shares, acquisition of shares from other shareholders, and primary infusion of capital in Sampo, with a total incremental outlay of Euro 8.5 million (approximately Rs. 72.9 crores). On account of the increase in stake, Sampo ceased to be an Associate and became a Subsidiary of the Company. Harvesting machinery is the second largest category in the global farm equipment industry. The Company''s scale in tractors and Sampo''s expertise in combine harvesters allows both companies to offer a broader product portfolio to address the needs of farmers in various countries. In India, the combine harvester market is currently much smaller than tractors but is growing rapidly with the penetration of mechanisation. Your Company is building a strong position in this product line for India and other export markets.

Termination of Joint Venture discussions with Ford Motor Company

The Company and Ford Motor Company Inc., USA (''Ford'') mutually determined that they will not complete a previously announced Joint Venture between the companies. This followed the passing of the expiration date of the definitive agreements signed between the two companies. This outcome was driven by fundamental changes in global economic and business conditions since the agreement was first announced. Those changes influenced separate decisions by Ford and the Company to reassess their respective capital allocation priorities.

Ssangyong Motor Company (“Ssangyong”)

During the year, the Board of your Company decided not to make any further equity investment in Ssangyong Motor Company, a subsidiary in South Korea. Pursuant to the decision, Ssangyong management initiated a search for a potential investor to invest equity.

During the year under review, the Members of the Company have, by way of a Postal Ballot, approved the proposal of Transfer/Dilution of stake in Ssangyong and/or cessation of control of the Company over Ssangyong.

Following a global search, one North America based investor expressed an interest to invest and acquire a majority stake in Ssangyong. However, a term sheet could not be concluded due to regulatory constraints. Following Ssangyong''s inability to pay bank loans which were due in December, 2020, Ssangyong applied to Korean Courts for commencement of rehabilitation procedure. The Court allowed three months to Ssangyong to arrive at a private investment agreement with the said investor.

Since that could not be concluded within the stipulated time, the Court initiated rehabilitation process on 15^th April, 2021 and appointed a Court receiver who took over the day-to-day management of Ssangyong.

An examiner appointed by the Court will determine whether Ssangyong should be sold as a going concern or liquidated. If the examiner recommends a sale, the receiver will oversee the preparation of a rehabilitation plan which may include a combination of capital reduction, debt waiver, debt-to-equity conversion and other similar actions. The rehabilitation plan is expected to be submitted to the Court by July, 2021.

Pursuant to the admission in the Autonomous Restructuring Support (ARS) program and following the guidance under Ind AS 110 - Consolidated Financial

Statements, the Company has ceased consolidating Ssangyong as a subsidiary from 28^th December, 2020 and has classified the investment to be measured at fair value as per Ind AS 109 - Financial instruments. Accordingly, the losses from operations, resultant gain on deconsolidation of Ssangyong and impairments/ provisions for the exposures of the Company to Ssangyong have been recognised and presented under ''Profit/(loss) before tax from discontinued operation'' in the Consolidated Statement of Profit and Loss. However, Ssangyong continues to be a subsidiary of the Company under the Companies Act, 2013.

100% shareholding in Meru through primary infusion and secondary share purchase

In December 2019, your Company acquired 36.63% of the equity share capital along with control of Meru Travel Solutions Private Limited ("Meru"), holding company of the Meru Group.

In January 2021, your Company increased its stake in Meru to 43.20% by way of a primary investment of Rs. 15 crores in Meru. Further to this and with the intent of increasing the focus on Mobility Sector, in May 2021 your Company acquired the balance stake from the erstwhile shareholders of Meru for Rs. 97 crores. Meru also redeemed its preference shares held by its then shareholder through proceeds of fresh issue on rights basis which was subscribed by your Company for Rs. 3 lacs. Post the above transactions, Meru is now a wholly owned subsidiary of your Company.

The Corporate Governance Policies guide the conduct of affairs of your Company and clearly delineate 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.

Your Company''s Financial Statements are prepared on the basis of the Significant Accounting Policies that are carefully selected by Management and approved by the Audit Committee and the Board. These Accounting policies are reviewed and updated from time to time.

Your Company uses SAP ERP Systems as a business enabler and to maintain its Books of Account. The transactional controls built into the SAP ERP systems ensure appropriate segregation of duties, appropriate level of approval mechanisms and maintenance of supporting records. The Information Management Policy reinforces the control environment. The systems, Standard Operating Procedures and controls are reviewed by Management. These systems and controls are audited by Internal Audit and their findings and recommendations are reviewed by the Audit Committee which ensures the implementation.

Your Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations. Your Company''s Internal Financial Controls were deployed through Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), that addresses material risks in your Company''s operations and financial reporting objectives.

Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by The Institute of Chartered Accountants of India. Based on the results of such assessments carried out by the Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.

Your Company recognizes that the Internal Financial Controls cannot provide absolute assurance of achieving financial, operational and compliance reporting objectives because of its inherent limitations. Also, projections of any evaluation of the Internal Financial Controls to future periods are subject to the risk that the Internal Financial Controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.

A detailed analysis of your Company''s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

All Related Party Transactions entered during the year were in the ordinary course of business and on arm''s length basis. During the year under review, your Company had entered into Material Related Party Transactions i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, with Mahindra Vehicle Manufacturers Limited, a wholly owned subsidiary of your Company. These transactions too were in the ordinary course of business of your Company and were on arm''s length basis, details of which are disclosed in Form AOC-2 as Annexure II pursuant to the requirements of section 134(3)(h) of the Companies Act, 2013, which forms part of this Annual Report.

The Policy on Materiality of and Dealing with Related Party Transactions as approved by the Board is uploaded on the Company''s website and can be accessed in the Governance section at the Web-link https://www.mahindra.com/investors/reports-and-filings.

Statutory Auditors and Auditors’ Report

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 71^st Annual General Meeting (AGM) held on 4^th August, 2017 until the conclusion of the 76^th AGM of the Company to be held in the year 2022.

The Auditors'' Report is unmodified i.e. it does not contain any qualification, reservation or adverse remark or disclaimer.

Secretarial Auditor

Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Sachin Bhagwat, Practicing Company Secretary (Certificate of Practice Number: 6029) to undertake the Secretarial Audit of the Company.

The Company has annexed to this Board''s Report as Annexure III, a Secretarial Audit Report given by the Secretarial Auditor.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer.

Annual Secretarial Compliance Report

The Company has undertaken an audit for the Financial Year 2020-21 for all applicable compliances as per Securities and Exchange Board of India Regulations and Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report duly signed by Mr. Sachin Bhagwat has been submitted to the Stock Exchanges and is annexed as Annexure IV to this Board''s Report.

Secretarial Audit of Material Unlisted Indian Subsidiary

Mahindra Vehicle Manufacturers Limited ("MVML"), a material subsidiary of the Company carried out Secretarial Audit for the Financial Year 2020-21 pursuant to section 204 of the Companies Act, 2013 and Regulation 24A of the Listing Regulations. The Secretarial Audit Report of MVML submitted by Mr. Sachin Bhagwat, Practicing Company Secretary is attached as Annexure V to this Report and does not contain any qualification, reservation or adverse remark or disclaimer.

Cost Auditors

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 2020-21.

The Board of Directors on the recommendation of the Audit Committee, appointed Messrs D. C. Dave & Co., Cost Accountants (Firm Registration Number 000611), as the Cost Auditors of the Company for the Financial Year 2021-22 under section 148 of the Companies Act, 2013. Messrs D. C. Dave & Co. have confirmed that their appointment is within the limits of section 141 (3)(g) of the Companies Act, 2013 and have also certified that they are free from any disqualifications specified under section 141(3) and proviso to section 148(3) read with section 141(4) of the Companies Act, 2013.

The Audit Committee has also received a Certificate from the Cost Auditors certifying their independence and arm''s length relationship with the Company.

As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking Members'' ratification for the remuneration payable to Messrs D. C. Dave & Co., Cost Auditors is included in the Notice convening the Annual General Meeting.

Cost Records

As per Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014, your Company is required to maintain cost records and accordingly, such accounts and records are maintained.

Reporting of Frauds by Auditors

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.

Particulars of the loans given, investment made or guarantee given or security provided and the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient of the loan or guarantee or security are provided in Note Nos. 6 and 36 to the Financial Statements.

Your Company had discontinued acceptance of Fixed Deposits with effect from 1^st April, 2014.

All the deposits from public and shareholders had already matured as at 31^st March, 2017. All the 22 outstanding deposits aggregating Rs. 9.44 lakhs from the public and shareholders as at 31^st March, 2021 had matured and had not been claimed as at the end of the Financial Year. Since then no deposits 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.

The particulars of loans/advances/investments, etc., required to be disclosed pursuant to Para A of Schedule V of the Listing Regulations are furnished separately.

The transaction(s) of the Company with a company belonging to the promoter/promoter group which hold(s) more than 10% shareholding in the Company as required pursuant to para A of Schedule V of the Listing Regulations is disclosed separately in the Financial Statements of the Company.

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Key Managerial Personnel (KMP)

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

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

(b) Dr. Anish Shah - Managing Director and CEO (with effect from 2^nd April, 2021)

(c) Mr. Rajesh Jejurikar - Executive Director (Automotive and Farm Sectors)

(d) Mr. Manoj Bhat - Group Chief Financial Officer (appointed with effect from 2^nd April, 2021)

(e) Mr. Narayan Shankar - Company Secretary

Dr. Pawan Goenka ceased to be the Managing Director and CEO of the Company with effect from 2^nd April, 2021. Dr. Anish Shah was re-designated as Managing Director and CEO of the Company and ceased to be the Group Chief Financial Officer of the Company, with effect from 2^nd April, 2021.

Employees’ Stock Option Scheme

During the year under review, on the recommendation of the Governance, Nomination and Remuneration Committee ("GNRC") of your Company, the Trustees of Mahindra & Mahindra Employees'' Stock Option Trust have granted Stock Options to employees under the Mahindra & Mahindra Limited Employees Stock Option Scheme 2010. No Stock Options have been granted to employees under the Mahindra & Mahindra Limited Employees Stock Option Scheme 2000.

The Company has in force the following Schemes which get covered under the provisions of SEBI (Share Based Employee Benefits) Regulations, 2014 ("SBEB Regulations"):

1. Mahindra & Mahindra Limited Employees Stock Option Scheme - 2000 (2000 Scheme)

2. Mahindra & Mahindra Limited Employees Stock Option Scheme - 2010 (2010 Scheme)

3. M&M Employees Welfare Fund No. 1

4. M&M Employees Welfare Fund No. 2

5. M&M Employees Welfare Fund No. 3

There are no material changes made to the above Schemes and these Schemes are in compliance with the

SBEB Regulations. Your Company''s Auditors, Messrs B S R & Co. LLP, have certified that the Company''s above-mentioned Schemes have been implemented in accordance with the SBEB Regulations, and the Resolutions passed by the Members for the 2000 Scheme and the 2010 Scheme.

Information as required under the SBEB Regulations read with SEBI Circular CIR/CFD/POLICYCELL/2/2015 dated 16^th June, 2015 have been uploaded on the Company''s website and can be accessed at the Web-link: https:// www.mahindra.com/resources/FY21/AnnualReport.zip.

Particulars of Employees and related disclosures

The Company had 273 employees who were in receipt of remuneration of not less than Rs. 1,02,00,000 during the year ended 31^st March, 2021 or not less than Rs. 8,50,000 per month during any part of the year.

Details of employee remuneration as required under provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be made available during 21 days before the Annual General Meeting in electronic mode to any Shareholder upon request sent at [e-mail]. Such details are also available on your Company''s website and can be accessed at the Web-link: https://www.mahindra. com/resources/FY21/AnnualReport.zip.

Disclosures with respect to the remuneration of Directors, KMPs and employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure VI to this Report.

Industrial Relations

The year under review witnessed a very positive Industrial Relations Scenario across all manufacturing locations for the Automotive and Farm Equipment Sectors even during the toughest time of Pandemic.

Your Company''s focus continues towards propagating proactive and employee centric practices. The transformational work culture initiative that aims to create an engaged workforce with an innovative, productive and a competitive shop-floor ecosystem continues to grow in strength. Some examples of the programs put in place include ''Rise for Associates'', industrial relations skills for frontline officers,

transformational work culture projects, e-compliance, e-portal for reward and recognition of associates, and Code of Conduct for associates. The newly constituted Employee Relations Council is taking forward the work of Transformational Work Culture Committee (TWCC) and leads the design and implementation of these programs and reviews its progress.

With the objective of capability building, developing future ready workforce and fostering togetherness at the workplace, your Company implements multiple training and engagement programs on an ongoing basis. These include various behavioural and functional programs such as team effectiveness, individual effectiveness, safety and environment, quality tools, TPM, skill building programs, continuous improvement, result orientation, relationship management, decision making and programs on union leadership development. The Company launched the Success Factors Learning Management System for associates to enable self-paced learning on a digital space.

The Mahindra Skill Excellence initiative, a holistic approach to enhance the skill and capabilities of shop floor associates, is receiving good participation across manufacturing facilities. As a result of this effort, till previous year associates from your Company have participated at various international skill competitions which include China Arc Cup 2020, WorldSkills 2019 and Beijing Arc Cup.

One of the Company''s associates won the 1^st prize in 135 GMAW process (Welding) in the China Arc Cup 2020. The Company''s associate won the ''Medallion of Excellence'' at the WorldSkills 2019. At the Beijing Arc Cup, the Company''s associate won the bronze medal in finished product category and a female associate from your Company was awarded as ''Excellent Female Welder''. However, since Pandemic has grappled the entire globe and countries are struggling to fight back the COVID-19 effect, in Financial Year 2021, all international competitions were put on hold.

In an endeavour to improve quality, reduce cost, ensure safety and improve productivity, your Company''s shop floor associates managed to generate on an average 11.5 ideas per person in the Financial Year 2021 even during the time of uncertainties and even though the plant was non-operational for some time.

This year significant emphasis was also laid towards raising awareness on health and wellness of employees and their family members on protection from COVID-19 under the brand program on "2417 Swasth Raho Mast Raho" over Google Teams platform in addition to regular

annual medical check-ups, health awareness activities. Diet food has become a way of life over the past four years. Your Company maintains an ''Employee Health Index'' at an individual level and this has been a useful tool in identifying employees who require focused counselling and monitoring.

Proactive and employee-centric shop floor practices, a focus on transparent communication of business goals, an effective concern resolution mechanism, and a firm belief that employees are the most valuable assets of the Company, are the cornerstone of your Company''s employee relations approach. An ''open door policy'' with constant dialogue to create win-win situations, have helped your Company build trust and harmony.

The industrial relations scenario continued to be largely positive across all the manufacturing locations. Bonus settlements were amicably agreed upon at all locations. The sustained efforts towards building a transformational work culture resulted in zero production loss in the Financial Year 2020-21 and helped create a collaborative, healthy and productive work environment.

Safety, Occupational Health and Environment

During the year under review, your Company revised its Safety, Occupational Health & Environment (SOH&E) Policy and started its implementation as per the new standard, ISO: 45001: 2018. The management commitment towards SOH&E is demonstrated through adoption of new compliance and notifications during the pandemic period along with its voluntary commitments. The Company implemented various initiatives under the new normal guidelines with overall health and hygiene being merged with the SOH&E policy. The achievements were assessed through management reviews from time to time.

At each Plant location, annual events like Road Safety Week, National Safety Day/Month and Fire Service Week were organized virtually. As per new normal, various topics were deployed to train employees on Safety, Health and Environment. Similarly, virtual meetings and training programs were deployed for suppliers, with special focus on safety and fire safety. The training programs were leveraged by sharing small clips to enhance learning.

To strengthen the safety practices, the Company continues to focus on theme-based safety topics including Behavior Based Safety (BBS) Level 2. Additionally, your Company introduced chemical safety management and office fire prevention and protection new standards.

Overall, 16 safety standards for standardization in the M&M group companies are under implementation across all plants.

Your Company carried out statutory Safety audits, Fire Safety Audit, Electrical Safety Audit, Risk Assessment as per updated safety standards. For the year under review, your Company achieved substantial reduction in the fire incidences by reducing fire load. The initiatives in this space include installation of modern equipment and recyclable stores packaging material in critical areas by substituting the flammable material as appropriate.

To eliminate and minimize the overall environmental impact in line with the ''science-based targets'' philosophy, your Company is continuously adopting new techniques. Towards this objective, various projects have been implemented by your Company in air, water-waste water management, solid waste recycling management, plastic waste recycling management and E-waste recycling management. Carbon footprint reduction is achieved by deploying IE3 motors and increasing share of renewable energy. Many of the Company''s new initiatives have been shared by your Company with the supplier community.

During the year under review, your Company started reporting the status under Extended Producer Responsibility Organizations (EPRO) to Central Pollution Control Board. This activity covers integral plastic waste recycling management for all the Company''s plants, Suppliers and Dealers.

Your Company implemented Central Ground Water Authority regulations for ground water recharging and water recycling management. This has helped your Company reduce its freshwater requirement and move towards water neutrality.

Your Company continued its commitment to improve the well-being of employees and contract associates through various activities by screening at all gates and regular distribution of vitamin supplement. Further, strict adherence to usage of PPE, displaying posters of hand washing technique and precautions to be taken, formation of isolation room and hands-free sanitization stands were provided.

Additionally, the Company reduced the sitting capacity in canteen area and sitting capacity in buses by 50%, installed safety screens at each table of canteen, observed distancing at shop floor and promoted more of virtual communications. Exclusive tie-up with various tertiary care hospitals, special tie-up with ambulance services for transferring COVID-19 positive persons to the Quarantine Centre or Hospitals, special tie up with Nightingale for virtual consultation with Doctors,

Medicinal kit and Hygiene kit Development at Mahindra COVID Centers were the additional measures taken by the Company to combat COVID-19.

The Company has successfully treated employees from all Mahindra Group Companies. This includes activities like medical check-post vaccination drive, continuous consultation and counselling on pandemic illness, special advisory publishing for all employees and family members were also conducted. Robust implementation of compliance for Bio medical Waste disposal Management as per pandemic notifications were also carried out.

To create awareness among society at large, your Company has installed a LED display screen that displays consented real time readings for all air, water and hazardous as well as non-hazardous waste generation and disposal limits. This screen is installed just outside the manufacturing plant in Mumbai, which is located on the Western Express highway. In addition, environment protection awareness is generated virtually amongst all stakeholders on an annual basis for World Ozone Day, World Environment Day, World Earth Day, World Water Day and Energy Conservation Week and Water Conservation Week, etc.

Certifications/Recertifications

All Plants of your Company are certified for Standard ISO 45001: 2018 and re-certification of ISO 14001: 2015. Further, all plants have implemented Integrated Management System (IMS), along with updated standard ISO 45001:2018.

All plants of your Company are certified for Zero Waste to Landfill with 99% and above conversion rate which ensures the commitment of recycling of waste at maximum extent to protect the environment.

The Company revises its year on year targets under SOH&E, and the performances are reviewed periodically by the senior management. Focused initiatives involving all stakeholders coupled with management reviews have helped your Company to improve SOH&E performance.

Directors

As mentioned in the previous Annual Report, Dr. Pawan Goenka was re-designated as "Managing Director and Chief Executive Officer" with effect from 1^st April, 2020 and re-appointed as "Managing Director and Chief Executive Officer" of the Company from 12^th November, 2020 to 1^st April, 2021.

Dr. Anish Shah was appointed as Whole-time Director designated as "Deputy Managing Director and Group Chief Financial Officer" from 1^st April, 2020 to 1^st April, 2021 and as the Managing Director of the Company designated as "Managing Director and Chief Executive Officer" from 2^nd April, 2021 to 31^st March, 2025.

Mr. Rajesh Jejurikar was appointed as Whole-time Director designated as "Executive Director (Automotive and Farm Sectors)" for a period of 5 years from 1^st April, 2020 to 31^st March, 2025.

Mr. CP Gurnani was appointed as Non-Executive Non-Independent Director of the Company with effect from 1^st April, 2020.

Mr. M. M. Murugappan and Mr. Nadir B. Godrej ceased to hold office as Independent Directors of the Company from 8^th August, 2020, upon completion of their tenure as approved by the Shareholders at the 72^nd Annual General Meeting of the Company held on 7^th August, 2018.

Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and Listing Regulations.

The Board is of the opinion that the Independent Directors of the Company hold highest standards of integrity and possess requisite expertise and experience required to fulfill their duties as Independent Directors.

In terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by The Indian Institute of Corporate Affairs, Manesar ("IICA"). The Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of 2 (two) years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption.

The Independent Directors of the Company are exempt from the requirement to undertake online proficiency self-assessment test except Mr. Muthiah Murugappan who would be undertaking the said test in due course.

Lead Independent Director

Mr. Vikram Singh Mehta, Independent Director and Chairman of Governance, Nomination and Remuneration Committee has been appointed as the Lead Independent Director with effect from 1^st April, 2021. The role and responsibilities of the Lead Independent Director are provided in the Corporate Governance Report forming part of the Annual Report.

Re-appointment of Independent Director for a Second Term

The Governance, Nomination and Remuneration Committee, on the basis of performance evaluation of Mr. T. N. Manoharan and taking into account the external business environment, the business knowledge, acumen, experience and the substantial contribution made by him during his tenure, has recommended to the Board that the continued association of Mr. T. N. Manoharan as Independent Director would be beneficial to the Company. Based on the above and his performance evaluation, the Board recommends the re-appointment of Mr. T. N. Manoharan as an Independent Director for a further period of 5 consecutive years commencing from 11^th November, 2021 to 10^th November, 2026. The Company has received the requisite Notice from a Member in writing proposing his appointment as Independent Director.

Appointment of Independent Directors Ms. Nisaba Godrej

Pursuant to the recommendation of the Governance, Nomination and Remuneration Committee, the Board at its Meeting held on 7^th August, 2020 approved appointment of Ms. Nisaba Godrej, as an Additional Director (Independent and Non-Executive) on the Board of Directors of the Company, with effect from 8^th August, 2020 to hold office up to the date of the Annual General Meeting of the Company to be held thereafter and subject to the approval of the Members at the said Annual General Meeting, to hold office as an Independent Director for a term of 5 (five) consecutive years commencing from 8^th August, 2020 to 7^th August, 2025 (both days inclusive).

The Company has received the requisite Notice from a Member in writing proposing her appointment as an Independent Director of the Company.

Mr. Muthiah Murugappan

Pursuant to the recommendation of the Governance, Nomination and Remuneration Committee, the Board at its

Meeting held on 7^th August, 2020 approved appointment of Mr. Muthiah Murugappan, as an Additional Director (Independent and Non-Executive) on the Board of Directors of the Company, with effect from 8^th August, 2020 to hold office up to the date of the Annual General Meeting of the Company to be held thereafter and subject to the approval of the Members at the said Annual General Meeting, to hold office as an Independent Director for a term of 5 (five) consecutive years commencing from 8^th August, 2020 to 7^th August, 2025 (both days inclusive).

The Company has received the requisite Notice from a Member in writing proposing his appointment as an Independent Director of the Company.

Completion of tenure of Dr. Pawan Goenka

Dr. Pawan Goenka ceased to hold office as "Managing Director and CEO" of the Company with effect from 2^nd April, 2021 upon completion of his tenure as approved by the Shareholders at the 74^th Annual General Meeting of the Company. Dr. Goenka also ceased to be a Member of the Board of Directors of the Company with effect from 2^nd April, 2021.

Dr. Pawan Goenka joined the Company as General Manager (R&D) in the year 1993. During his R&D tenure he led the development of the Scorpio SUV. He was appointed COO (Automotive Sector) in April 2003, President (Automotive Sector) in September 2005, President (Automotive & Farm Equipment Sectors) in April 2010. Dr. Pawan Goenka was first appointed as an Executive Director and President (AFS) on the Board of the Company on 23^rd September, 2013, Executive Director and Group President (AFS) in April 2015, Managing Director of Mahindra & Mahindra Limited, in November 2016 and designated as Managing Director & CEO on 1^st April, 2020.

The Company has witnessed phenomenal growth under his leadership. The path through which the Company passed through and the valuable contribution made by him in guiding and shaping the business model and future of the Company and the Group is commendable. He was instrumental in translating the global vision of the Company into a reality.

He has been the Chairman of the Risk Management Committee and Member of the Corporate Social Responsibility Committee, Loans & Investment Committee, Stakeholders Relationship Committee, Research & Development Committee and Sale of Assets Committee of the Board.

The Board placed on record its deep appreciation of the invaluable services rendered by Dr. Pawan Goenka to the Company for over more than 27 illustrious years with the Company.

Quote from Executive Chairman

"Pawan joined your Company in 1993, fresh from a long stint in the USA, wanting to make a career in India but uncertain about how this would work out. From that day to this, he has spent 28 exciting years in the Company. He started as a General Manager reporting to the head of Automotive R&D at Nashik and rose to cap his career as the MD and CEO of your Company. That is an impressive trajectory.

Pawan''s unique combination of engineering skills and commercial acumen have added great value to your Company. Under his leadership, particularly in the area of R&D, your Company produced a stream of products that put us on the automotive map. When he shared the first Scorpio prototype with me, my spontaneous reaction was that I was witnessing the birth of a new era. The Scorpio changed the Company''s DNA, image and fortunes. From the Scorpio to the XUV 700, Pawan has been the driving force behind the quantum leap achieved by the R&D Function in M&M.

Pawan is a role model for many in your Company. His understanding of complex engineering processes along with the demands of the market has been instrumental in translating the Company''s global vision into a reality. His commitment to Quality focus and Customer first is now a part of the folklore of your Company. He has always possessed a natural inclination towards fairness and transparency and has great respect for his own time and the time of others. He believes he can learn from anyone, even the most junior of colleagues. Fostering a meritocracy at Mahindra has always been a priority for him. He is the living embodiment of our Core Values.

He has officially retired, but I know that our loss is going to be society''s gain. Amongst the many activities he has planned, giving back to the community in some form or the other is a large part of his agenda. And although he will devote much less time to our organisation, it is a comfort to know that we will always have access to his experience and wisdom.

I wish Pawan a very happy, productive and fulfilling next chapter in his life. Wherever his destiny takes him, he will always remain a valued part of our Mahindra Group family."

Transition of Mr. Anand G. Mahindra, Executive Chairman to the role of Non-Executive Chairman of the Company with effect from 12^th November, 2021

At the 71^st Annual General Meeting of the Company, based on the recommendations of the Governance, Nomination and Remuneration Committee of the Board ("GNRC") and the Board of Directors, the Company had appointed Mr. Anand G. Mahindra as Executive Chairman of the Company for a period of 5 (Five) years with effect from 12^th November, 2016 upto and including 11^th November, 2021.

In line with the requirement of Regulation 17(1 B) of the Listing Regulations, the Board of Directors pursuant to the recommendations of GNRC at its meeting held on 20^th December, 2019, had approved the transition of Mr. Anand G. Mahindra, Executive Chairman to the role of Non-Executive Chairman with effect from 1^st April, 2020.

Subsequently, pursuant to the Securities and Exchange Board of India ("SEBI") notification dated 10^th January, 2020 deferring the deadline for compliance with Regulation 17(1B) of the Listing Regulations from 1^st April, 2020 to 1^st April, 2022, the GNRC and the Board at their Meetings held on 7^th February, 2020 and 8^th February, 2020 respectively, unanimously requested Mr. Anand G. Mahindra to continue as the Executive Chairman till his original term of appointment as approved by the Shareholders of the Company i.e. upto 11^th November, 2021.

In deference to the wishes of the GNRC and Board, Mr. Anand G. Mahindra had acceded to the request to continue as the Executive Chairman till his original term of appointment i.e. upto 11^th November, 2021.

Upon completion of his tenure as Executive Chairman, Mr. Anand G. Mahindra will transit to the role of Non-Executive Chairman of the Company with effect from 12^th November, 2021, who shall be liable to retire by rotation. This will further enhance the independence of the Board.

As Non-Executive Chairman, he will serve as mentor and sounding board for the Managing Director and Senior Management especially in the areas of strategic planning, risk mitigation and external interface. He will continue to play an important role in epitomising and building Brand Mahindra. He will be available to provide feedback and counsel to the Managing Director and Senior Management on key issues facing the Company.

Retirement by rotation

Mr. Vijay Kumar Sharma and Mr. CP Gurnani retire by rotation and, being eligible, offer themselves for re-appointment at the 75^th Annual General Meeting of the Company scheduled to be held on 6^th August, 2021.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 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, including Independent Directors, Chairman of the Board, Managing Director, Deputy Managing Director and Group Chief Financial Officer and Executive Director (Auto and Farm Sectors).

I Feedback Mechanism

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.

Evaluation of Committees

The performance evaluation of Committees was based on criteria such as structure and composition of Committees, attendance and participation of member of the Committees, fulfilment of the functions assigned to Committees by the Board and applicable regulatory framework, frequency and adequacy of time allocated at the Committee Meetings to fulfil duties assigned to it, adequacy and timeliness of the Agenda and Minutes circulated, comprehensiveness of the discussions and constructive functioning of the Committees, effectiveness of the Committee''s recommendation for the decisions of the Board, etc.

Evaluation of Directors and Board

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 Executive Chairman of the Company was also carried out by the Independent Directors, taking into account the views of the Executive Directors and Non Executive Directors. The performance evaluation of the Managing Director of the Company was carried out by the Executive Chairman and other Directors.

Criteria for Independent Directors

The performance evaluation of Independent Directors was based on various criteria, inter-alia, including 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.

Criteria for Chairman

The performance evaluation of Chairman was based on various criteria, inter-alia, including style of Chairman''s leadership, effective engagement with other Board members during and outside the meetings, allocation of time provided to other Board members at the meetings, effective engagement with shareholders during general meetings, etc.

Criteria for Managing Director and Executive Directors

The performance evaluation of Managing Director and Executive Directors was based on various criteria, inter-alia, including leadership style, standards of integrity, fairness and transparency demonstrated, identification of strategic aim, future demands and opportunities, resource staffing to meet short term and long term goals, engagement with Board and Committee members, updating Board on significant issues, commitment to organisational values, vision and mission, adaptation to meet changing circumstances, knowledge and sensitivity of stakeholders'' needs within and outside the Company demonstrated and effective communication skills.

Results of Evaluation

The results of evaluation showed high level of commitment and engagement of Board, its various committees and senior leadership. The results of the evaluation were shared with the Board, Chairman of respective Committees and individual Directors. Based on the outcome of the evaluation, the Board and Committees have agreed on an action plan to further improve the effectiveness and functioning of the Board and Committees.

The Directors expressed their satisfaction with the evaluation process. During the year under review, the Committee ascertained and reconfirmed that the deployment of "questionnaire" as a methodology, is effective for evaluation of performance of Board and Committees and Individual Directors.

Policies

Your Company has adopted the following Policies which, inter alia, include criteria for determining qualifications,

positive attributes and independence of a Director:

(a) Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management;

(b) Policy for remuneration of the Directors, Key Managerial Personnel and other employees.

Policy (a) mentioned above includes the criteria for determining qualifications, positive attributes and independence of a Director, identification of persons who are qualified to become Directors and who may be appointed in the Senior Management Team in accordance with the criteria laid down in the said Policy, succession planning for Directors and Senior Management, and Policy statement for Talent Management framework of the Company.

Policy (b) mentioned above sets out the approach to Compensation of Directors, Key Managerial Personnel and other employees in the Company.

Policies mentioned at (a) and (b) above are available on the website and can be accessed in the Governance section at the Web-link https://www.mahindra.com/investors/reports-and-filings.

Familiarisation Programme for Independent Directors/Non-Executive Directors

The Members of the Board of the Company are afforded many opportunities to familiarise themselves with the Company, its Management and its operations. The Directors are provided with all the documents to enable them to have a better understanding of the Company, its various operations and the industry in which it operates.

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.

Executive Directors and Senior Management provide an overview of the operations and familiarize the new Non-Executive Directors on matters related to the Company''s values and commitments. They are also introduced to the organization structure, constitution of various committees, board procedures, risk management strategies, etc.

Strategic Presentations are made to the Board where Directors get an opportunity to interact with Senior Management. Directors are also informed of the various developments in the Company through Press Releases, emails, etc.

The Company has a web based portal i.e. Board portal, accessible to all the Directors which, inter alia, contains the following information:

• Roles, responsibilities and liabilities of Independent Directors under the Companies Act, 2013 and the Listing Regulations

• Board Minutes, Agenda and Presentations

• Annual Reports

• Code of Conduct for Directors

• Terms and conditions of appointment of Independent Directors

Pursuant to Regulation 25(7) of the Listing Regulations, the Company imparted various familiarization programmes for its Directors including review of Investments of the Company by Strategic Investment Committee, Industry Outlook at the Board Meetings, Regulatory updates at Board and Audit Committee Meetings covering changes with respect to the Companies Act, 2013, Listing Regulations, Taxation and other matters, Presentations on Internal Control over Financial Reporting, Operational Control over Financial Reporting, Prevention of Insider Trading Regulations, Framework for Related Party Transactions, Plant Visit, Meeting with Senior Executive(s) of your Company, etc. Pursuant to Regulation 46 of the Listing Regulations, the details required are available on the website of your Company at the web link: https://www.mahindra.com/resources/FY21/ AnnualReport.zip

Directors’ Responsibility Statement

Pursuant to section 134(5) of the Companies Act, 2013, your Directors, based on the representations received from the Operating Management, and after due enquiry, confirm that:

(a) i n the preparation of the annual accounts for the Financial Year ended 31^st March, 2021, the applicable accounting standards have been followed;

(b) they had in consultation with Statutory Auditors, selected accounting policies and applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2021 and of the profit of the Company for the year ended on that date;

(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in

accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and irregularities;

(d) they have prepared the annual accounts on a going concern basis;

(e) they have laid down adequate Internal Financial Controls to be followed by the Company and such Internal Financial Controls were operating effectively during the Financial Year ended 31^st March, 2021;

(f) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively throughout the Financial Year ended 31^st March, 2021.

Board Meetings and Annual General Meeting

A calendar of Meetings is prepared and circulated in advance to the Directors.

During the year 1^st April, 2020 to 31^st March, 2021, seven Board Meetings were held on: 3^rd April, 2020, 23^rd April, 2020, 12^th June, 2020, 7^th August, 2020, 10^th November, 2020, 5^th February, 2021 and 26^th March, 2021. The 74^th Annual General Meeting (AGM) of the Company was held on 7^th August, 2020 through Video Conferencing.

Meetings of Independent Directors

The Independent Directors of your Company meet before the Board Meetings without the presence of the Executive Chairman or the Managing Director or other Non-Independent Director or Chief Financial Officer or any other Management Personnel.

These Meetings are conducted in an informal and flexible manner to enable the Independent Directors to discuss matters pertaining to, inter alia, review of performance of Non-Independent Directors and the Board as a whole, review the performance of the Executive Chairman of the Company (taking into account the views of the Executive and Non-Executive Directors), review the performance of the Company, 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.

Audit Committee

The Board at its Meeting held on 7^th August, 2020 re-constituted the Audit Committee and appointed Mr. Vikram Singh Mehta and Mr. Haigreve Khaitan as the Members with effect from 8^th August, 2020. Mr. Nadir B. Godrej and Mr. M. M. Murugappan ceased to be the Members of the Committee upon the end of their term. The Committee comprises of four Directors viz. Mr. T. N. Manoharan (Chairman of the Committee), Ms. Shikha Sharma, Mr. Vikram Singh Mehta and Mr. Haigreve Khaitan. All the Members of the Committee are Independent Directors and possess strong accounting and financial management knowledge. The Company Secretary of the Company is the Secretary of the Committee.

All the recommendations of the Audit Committee were accepted by the Board.

Corporate Governance

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

A Report on Corporate Governance along with a Certificate from the Statutory Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Schedule V of the Listing Regulations forms part of the Annual Report.

Vigil Mechanism

The Vigil Mechanism as envisaged in the Companies Act, 2013, the Rules prescribed thereunder and the Listing Regulations is implemented through the Company''s Whistle Blower Policy to enable the Directors, employees and all stakeholders of the Company to report genuine concerns, to provide for adequate safeguards against victimisation of persons who use such mechanism and make provision for direct access to the Chairman of the Audit Committee.

Whistle Blower Policy of your Company is available on the Company''s website and can be accessed in the Governance section at the Web-link https://www.mahindra.com/investors/reports-and-filings.

Further details are available in the Report on Corporate Governance that forms part of this Annual Report.

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has a detailed policy in place in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("Act"). Internal Complaints Committees ("ICC") have been set up to redress complaints received regarding sexual harassment and the Company has complied with provisions relating to the constitution of ICC under the Act. All employees (permanent, contractual, temporary, trainees) are covered under this Policy.

During the year under review, 7 complaints with allegations of sexual harassment were filed and 5 were disposed off as per the provisions of the Act. 2 complaints are pending as of 31^st March, 2021.

Business Responsibility Report

The ''Business Responsibility Report'' (BRR) of your Company for the year 2020-21 forms part of this Annual Report as required under Regulation 34(2)(f) of the Listing Regulations.

Your Company strongly believes that sustainable and inclusive growth is possible by using the levers of environmental and social responsibility while setting aspirational targets and improving economic performance to ensure business continuity and rapid growth.

Your Company is committed to leverage ''Alternative Thinking'' to build competitive advantage in achieving high shareholder returns through customer centricity, innovation, good governance and inclusive human development while being sensitive to the environment.

Risk Management

Your Company has a well-defined risk management framework in place. The risk management framework works at various levels across the enterprise. These levels form the strategic defence cover of the Company''s risk management. The Company has a robust organizational structure for managing and reporting on risks.

Your Company has constituted a Risk Management Committee of the Board which is authorized 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 include review of risks and Risk Management Policy at periodic intervals.

Your Company has developed and implemented a Risk Management Policy which is approved by the Board. The Risk Management Policy, inter alia, includes identification of risks, including cyber security and related risks and also 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 organization.

Corporate Social Responsibility (CSR)

This year marks the 75^th year of inception of your Company. Over the past seven decades, your Company has built its reputation as a good corporate citizen by not only doing ''good business'', but also by driving positive change in society. The core purpose of the Company is to "challenge conventional thinking and innovatively use all our resources to drive positive change in the lives of our stakeholders and communities across the world, to enable them to RISE".

This year was a particularly challenging year for humanity, with the adverse impact of the COVID-19 pandemic felt by one and all but more so by the vulnerable and marginalized groups on whom the impact has been the hardest. Your Company has invested in a concerted manner to provide COVID-19 relief and rehabilitation with an aim of building resilient communities. Apart from contributing to the Prime Minister''s Citizen Assistance and Relief in Emergency Situations Fund towards the end of Financial Year 2020, the Mahindra Group swiftly responded to the pandemic by putting into action a series of relief initiatives.

Your factories were converted to produce face shields, face masks, sanitizers and aerosol boxes to support the frontline warriors in the fight against the

pandemic. Further, a COVID-19 Relief Fund under the aegis of Mahindra Foundation was set up to provide sustenance grants and in-kind support to those most severely affected by the pandemic e.g. small businesses and traders, daily wage labourers, frontline COVID warriors, etc. Till 31^st March, 2021, the Mahindra Group has distributed 4,06,700 face shields, 14,35,950 face masks and 624 aerosol boxes to hospitals and frontline workers including the police force. The Group has also distributed 5,25,068 cooked food packets, and ration and other essentials to 7,03,486 individuals including migrants and communities around its office and factory locations. Your Company also supported Ratna Nidhi Charitable Trust, with the provision of ICU beds for a COVID care centre set up at NESCO in Goregaon, Mumbai, by BMC.

With the objective of building resilient communities, your Company''s long-term focus has been towards supporting the livelihood of communities, particularly migrants, adversely affected by the pandemic. This was done through a partnership with Swades Foundation for providing livelihood (goat rearing and fishing) support to 679 COVID-19 impacted households in Raigad district of Maharashtra. Your Company also entered into a partnership with Naandi Foundation to support 6,000 individuals through an Agri-Entrepreneurship Skilling Programme.

You will be happy to know that your Company has in line with its CSR vision, continued to support the constituencies of girls, youth and farmers through projects in the domains of education, health, and the environment. By investing CSR efforts in these critical constituencies who contribute to nation building and the economy, the Company will enable our stakeholders and communities to RISE.

The impact of some of the CSR projects your Company invested in Financial Year 2021 are shown below:

- Project Nanhi Kali supported the education of over 1,71,950 underprivileged girls through 6,346 Academic Support Centres across 24 locations in 9 states of India. Of these 33,046 girls were supported by your Company, while the Mahindra Group as a whole, supported 73,699 girls.

- Through the support of the Mahindra Group, the Mahindra Pride Schools (MPS) trained 4,342 youth from socially and economically disadvantaged communities across 7 locations in Financial Year 2021. Of these, your Company supported the MPS in Chandigarh, Varanasi, and 2 schools in Chennai, which together skilled 2,520 youth. Further, the Mahindra Group supported training of 92,304 students through 1,816 Mahindra Pride Classrooms (MPC) set up in ITIs, Polytechnics, Arts and Science Colleges across 13 states. Of this, your Company supported the training of 61,677 MPC students. The delivery of instruction was through virtual training thereby complying with the Government regulations with respect to COVID-19.

- Over 12,500 students have benefited through a variety of Scholarship Programs. These ranged from providing opportunities to youth from low income group families to undergo diploma courses at vocational education institutes, to enabling meritorious students to pursue their post graduate studies at reputed universities overseas, to allowing deserving students to study at the Mahindra United World College in Pune.

- Through Mahindra Hariyali, the Mahindra Group planted 1.14 million trees, which contributed to building green cover and protecting the rich biodiversity of the country. Your Company contributed towards plantation of 1 million trees of which

0.90 million trees were planted in the Araku valley, which besides greening the environment also provided livelihood support to tribal farmers growing coffee and fruit bearing trees in this region. Till date, 19.08 million trees have been planted through Mahindra Hariyali, of which 11.68 million trees were planted in Araku to support the livelihood of 25,000 tribal farmer families.

- Your Company entered into a Public Private Partnership (PPP) for an Integrated Water Management Program (IWMP) with Government of Madhya Pradesh at Bhopal and with National Bank for Agriculture and Rural Development (NABARD) at Hatta. Your Company has also partnered with NABARD in Maharashtra for a watershed project in Igatpuri, in Nashik District covering 20 villages, over 13,500 hectares and benefiting a population of more than 23,020 individuals.

- Through the Wardha Farmer Family Project, Prerna and Krishi Mitra Project, your Company continued to support small and marginal farmers by training them in effective farming practices including soil health, resource efficient agriculture, creating model farms with bio-dynamic farming practices, and increasing agricultural income through increasing crop productivity.

- Rise for Safe Roads: Through this first of its kind ''Road Safety'' project in India, your Company aimed to make the Mumbai Pune Expressway a near ''Zero Fatality Corridor'' by 2021. The interventions have been guided by the "4E" principle i.e. Engineering, Enforcement, Education and Emergency Response. In addition, long haul truck drivers were trained through the Anticipatory Driving and Action Prevention Training (ADAPT™) program.

- Despite the challenges posed by the pandemic, our employees continued to drive a positive change by volunteering. The employee volunteering platform provided 31,503 employees across the Group a menu of volunteering opportunities, enabling them to invest 2,72,467 hours towards giving back to society. Of these, 10,184 M&M employees contributed 83,789 hours towards various social causes. Your Company also launched the MySeva initiative, which encouraged employees to extend the spirit of giving in their personal capacity by recognizing their individual acts of social responsibility. Of the total volunteering hours, 51,625 hours was contributed by employees across the Group through the MySeva initiative and the balance were contributed through the ESOPs (Employee Social Options).

During the last Financial Year, your Company''s efforts to drive positive change were acknowledged by various forums and your Company received the following awards:

• India CSR Summit 2020 award for Watershed Management at Zaheerabad Plant and for Project Prerna in Maharashtra, Karnataka.

• SIAM award in Category - Skills & Education for Project Prerna.

• Indo French Chamber of Commerce & Industry (IFCCI) - CSR Award for Project Hariyali in the category of Environment and Sustainability.

CSR Policy

The Corporate Social Responsibility Committee had formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) which was subsequently adopted by it and is being implemented by the Company. The CSR Policy including a brief overview of the projects or programs undertaken can be accessed in the Governance section at the Web-link https://www.mahindra.com/investors/reports-and-filings.

CSR Committee

The Board at its Meeting held on 26^th March, 2021 re-constituted the Corporate Social Responsibility Committee. Dr. Pawan Goenka ceased to be the Member of the Committee with effect from 2^nd April, 2021, upon cessation as a Director of the Company.

Further, the Board at its Meeting held on 28^th May, 2021 re-constituted the Corporate Social Responsibility Committee by inducting Mr. Muthiah Murugappan as a Member of the Committee. The CSR Committee comprises of Dr. Vishakha N. Desai (Chairperson), Mr. Anand G. Mahindra, Dr. Anish Shah, Mr. Vikram Singh Mehta and Mr. Muthiah Murugappan.

The Committee, inter alia, reviews and monitors the CSR as well as Sustainability activities.

During the year under review, your Company spent Rs. 112,78,17,286 (including a set off of Rs. 20 crores for contributions made by the Company to the PM CARES Fund) on CSR activities. The amount equal to 2% of the average net profit for the past three financial years required to be spent on CSR activities was Rs. 112,56,00,000. The detailed Annual Report on the CSR activities undertaken by your Company in the Financial Year 2021, is annexed herewith marked as Annexure VII.

The Company had contributed a sum of Rs. 20 crores to the PM CARES Fund on 31^st March, 2020 in pursuance of MCA''s appeal dated 30^th March, 2020 made to the MDs/CEOs of top 1000 companies in terms of market capitalization, to contribute generously to PM CARES Fund.

In terms of the MCA Circular No.CSR-01/4/2021-CSR-MCA dated 20^th May, 2021, Mr. Manoj Bhat, Group Chief Financial Officer and BSR & Co., the Statutory Auditors of the Company have certified that the contribution to "PM CARES Fund" was indeed made on 31^st March, 2020 in pursuance of the appeal and the same was over and above the mandatory CSR obligation under section 135(5) of the Companies Act, 2013 for Financial Year 2019-20.

The said contribution of a sum of Rs. 20 crores to PM CARES Fund was made by the Company over and above the mandatory CSR obligation under section 135(5) of the Companies Act, 2013 for Financial Year 2019-20, which has been offset against the mandatory CSR obligation for Financial Year 2020-21.

Sustainability

During the year under review, the 13^th Sustainability Report for the year 2019-20 was released. The report was externally assured by KPMG and prepared in accordance with the GRI Standards - Core option.

Your Company continued the focus on the Environmental, Social and Governance (ESG) parameters by implementing Mahindra Sustainability Framework. This framework defines sustainability as "Building enduring business by rejuvenating the environment and enabling stakeholders to rise". Various actions have been implemented across the Group based on three pillars of the framework, People, Planet and Profit. The ESG information is disclosed under Dow Jones Sustainability Index (DJSI) and Carbon Disclosure Project (CDP). In DJSI, your Company has retained its position in the Emerging Market Index. In CDP Carbon and CDP water, your Company has achieved level A.

Your Company has committed to Science Based Target, an initiative to restrict average global temperature rise in alignment of Paris Climate Change Agreement. During the year, 21 companies across the Group have committed to Science Based Target, while 16 companies have received approval for their targets. By actively working towards making the locations certified for Zero Waste to Landfill (ZWL), your Company is demonstrating its concern about the environment. During the year, 22 Group locations got certified for ZWL.

Mr. Anand G. Mahindra, Executive Chairman of your Company participated at panel of global CEO''s session at International Solar Alliance, ''First World Solar Technology Summit''. Being one of the Board Members, he attended the United Nations Global Compact Meeting.

The Sustainability performance for your Company for the Financial Year 2020-21 will be elaborated in detail in the GRI Report which is under preparation and will be ready for release shortly.

During the year under review, your Company was recognized for its leadership position on the ESG dimensions by way of:

• Recognition as a part of 2020 CDP Supplier Engagement Leader-board. The Company is among the top 7% assessed for supplier engagement on climate change, based on 2020 CDP disclosure.

• Receiving an India Corporate Governance & Sustainability Vision Award 2021, organised by The Indian Chamber of Commerce in the category of ''Sustainability Performance''.

• Recognition as part of ''100 Most Sustainably Managed Companies in the World'' by The Wall Street Journal. The Company ranked 17^th which is highest for an automobile company and highest for an Indian company.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure VIII and forms part of this Report.

Share Capital

The issued, subscribed and paid-up Share Capital of the Company stood at Rs. 621.60 crores as at 31^st March, 2021 comprising of 1,24,31,92,544 Ordinary (Equity) Shares of Rs. 5 each fully paid-up. There was no change in Share Capital during the year under review.

Compliance with the provisions of Secretarial Standard 1 and Secretarial Standard 2

The applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ''Meetings of the Board of Directors'' and ''General Meetings'' respectively, have been duly complied by your Company.

Annual Return

Pursuant to section 134(3)(a) and section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, a copy of the annual return is placed on the website of the Company and can be accessed at https:// www.mahindra.com/resources/FY21/AnnualReport.zip.

The details of the Key Policies adopted by the Company are mentioned at Annexure IX to the Board''s Report.

Neither the Executive Chairman nor the Managing Director of the Company received any remuneration or commission from any of the subsidiary of your Company.

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions/events on these items during the year under review:

1. I ssue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of Shares (Including Sweat Equity Shares) to employees of the Company under any Scheme save and except Employees Stock Option Schemes (ESOS) referred to in this Report.

3. Significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and the Company''s operation in future.

4. Voting rights which are not directly exercised by the employees in respect of shares for the subscription/ purchase of which loan was given by the Company (as there is no scheme pursuant to which such persons can beneficially hold shares as envisaged under section 67(3)(c) of the Companies Act, 2013).

5. There has been no change in the nature of business of your Company.

6. No application was made or any proceeding is pending under the Insolvency and Bankruptcy Code, 2016 during the year in respect of your Company.

7. There was no one time settlement of loan obtained from the Banks or Financial Institutions.

For and on behalf of the Board

ANAND G. MAHINDRA

Executive Chairman

Mumbai, 28^th May, 2021

---

Mar 31, 2019

Dear Shareholders

The Directors present their Report together with the audited financial statements of your Company for the year ended 31^st March, 2019.

A. FINANCIAL AND OPERATIONAL HIGHLIGHTS
(Rs. in crores)
Particulars	2019	2018
Revenue from Operations	53,614	49,445
Other Income	1,689	1,036
Profit before Depreciation, Finance Costs, Exceptional items and Taxation	8,328	7,259
Less: Depreciation and Amortisation Expenses...	1,860	1,479
Profit before Finance Costs, Exceptional items and Taxation	6,468	5,780
Less: Finance Costs	113	112
Profit before Exceptional items and Taxation	6,355	5,668
Add: Exceptional items	(30)	434
Profit before Taxation	6,325	6,102
Less: Tax Expense	1,529	1,746
Profit for the year	4,796	4,356
Balance of profit for earlier years	25,206	21,781
Less: Transfer to Debenture Redemption Reserve	14	14
Profits available for appropriation	29,988	26,123
Add: Other Comprehensive Income/(Loss)*	(9)	8
Less: Dividend paid on Equity Shares	932	807
Less: Income-tax on Dividend paid	80	118
Balance carried forward	28,967	25,206

* Remeasurement of (loss)/gain (net) on defined benefit plans, recognised as part of retained earnings.

Growth in global economic expansion and trade decelerated in the year gone by. Increased trade tensions and tariff hikes between the United States and China and the subsequent impact on other trading partners, took a toll on sentiment. Moreover, economic turmoil in Argentina and Turkey and the associated tightening in financial conditions across Emerging Markets, continued deceleration in China’s growth and geopolitical tensions led to a softening in global activity.

Domestic economic activity also slowed down through the year and weakened notably in the second half of Financial Year 2019. Monetary tightening during the first half of the Financial Year, sharp movements in the Rupee, tighter financial conditions, a deceleration in NBFC lending and a surge in borrowing costs affected NBFC lending post the IL&FS default and impacted growth.

However, even amidst this scenario, your Company recorded an increase of 8.4% in revenue from operations at Rs. 53,614 crores in the year under review as against Rs. 49,445 crores in the previous year.

The Profit for the year before Depreciation, Finance Costs, Exceptional items and Taxation recorded an increase of 14.7% at Rs. 8,328 crores as against Rs. 7,259 crores in the previous year. Profit after tax increased by 10.1% at Rs. 4,796 crores as against Rs. 4,356 crores in the previous year.

Your Company continues with its rigorous cost restructuring exercises and efficiency improvements which have resulted in significant savings through continued focus on cost controls, process efficiencies and product innovations that exceed customer expectations in all areas thereby enabling the Company to maintain profitable growth in the current economic scenario.

No material changes and commitments have occurred after the closure of the Financial Year 2018-19 till the date of this Report, which would affect the financial position of your Company. There has been no change in the nature of business of your Company.

Performance Review

Automotive Sector:

Your Company’s Automotive Sector, posted record total sales of 6,07,548 vehicles (5,37,639 four-wheelers and 69,909 three-wheelers) as against a total of 5,48,508 vehicles (4,90,870 four-wheelers and 57,638 three-wheelers) in the previous year, registering a growth of 10.8%.

In the domestic market, your Company sold a total of 5,69,092 vehicles as compared to 5,20,286 vehicles in the previous year resulting in a growth of 9.4%.

In the Passenger Vehicle (PV) segment, your Company sold 2,54,351 vehicles [including 2,35,362 Utility Vehicles (UVs), 17,451 Vans and 1,538 Cars] registering a growth of 2.2%, as compared to the previous year’s volume of 2,48,859 vehicles [including 2,33,915 UVs, 14,219 Vans and 725 Cars].

In the Commercial Vehicle (CV) segment, your Company sold 2,48,601 vehicles [including 53,149 vehicles <2T GVW, 1,76,203 vehicles between 2-3.5T GVW, 8,235 LCVs in the LCV > 3.5T segment, 176 vehicles in the 7.5-16.2T GVW segment and 10,838 Heavy Commercial Vehicles (HCVs)] registering a growth of 14.7% over the previous year’s volume of 2,16,802 commercial vehicles, [including 41,305 vehicles < 2T GVW, 1,58,269 vehicles between 2-3.5T GVW, 7,744 LCVs in the LCV > 3.5T segment and 9,484 HCVs].

In the three-wheeler segment, your Company sold 66,140 three wheelers, registering a growth of 21.1% over the previous year’s volume of 54,625 three wheelers.

For the year under review, the Indian automotive industry (except 2W) grew 6.4%, with the PV industry growth of 2.7% and CV industry growth of 17.6%. The UV segment of the PV industry had a very nominal growth of 2.1% as against a growth of 21% in Financial Year 2018. The LCV<3.5T segment grew 22.4% while the HCV goods segment grew 10.2%.

Your Company’s UV volume stood at 2,35,362 units, a growth of 0.6%. The UV market share for your Company stood at 25%. Your Company strengthened its UV portfolio with the launch of Marazzo in September, 2018, Premium SUV Alturas G4 in November, 2018 and the Stylish and Thrilling XUV300 in February, 2019. All three launches were well received by the market and media. As a result of the new launches, the UV market share for the Fourth Quarter of the Financial year 2019 stood at 27.9%. Scorpio, XUV500 and Bolero continued to be strong brands for your Company in the UV segment.

Your Company is the pioneer for Electric Vehicles (EVs) in India, and for the year under review, sold [along with its subsidiary Mahindra Electric Mobility Limited (MEML)] 10,276 EVs (1,811 four wheelers and 8,465 three wheelers) as against 4,026 EVs in the previous year. This growth is supported by the Governments’ thrust on adopting EVs, and sustained effort by your Company in working with various stakeholders, especially fleet operators.

In the LCV<3.5T segment, your Company retained its No.1 position with a 44.5% market share. Your Company sold a total of 2,29,352 vehicles in this segment, which is a growth of 14.9% over the previous year. The LCV<3.5T segment has two sub segments viz. LCV<2T and LCV 2-3.5T, which is the Pik-UP segment. Your Company has a market share of 22.6% and 62.9% in the two sub segments respectively.

In the HCV segment, your Company sold 10,838 trucks as against 9,484 in the previous year. This is a growth of 14.3%. The Blazo series of trucks which are backed by guarantees on mileage and service are instrumental in building the brand and growing sales. Your Company’s market share in the HCV segment stands at 4.6%.

During the year under review, your Company posted an export volume of 38,456 vehicles as against the previous year’s exports of 28,222 vehicles. This is a growth of 36.3%. This is the highest ever exports by your Company.

The spare parts sales for the year stood at Rs. 2,340.6 crores (including exports of Rs. 284 crores) as compared to Rs. 2,103 crores (including exports of Rs. 195.3 crores) in the previous year, registering a growth of 11.3%.

Farm Equipment Sector

Your Company’s Farm Equipment Sector recorded total sales of 3,30,436 tractors (domestic export) as against 3,19,623 tractors sold in the previous year thus recording a growth of 3.4%. This includes 3,403 tractors sold under the Trakstar brand, which is the third brand of your Company under the subsidiary Gromax Agri Equipment Limited.

For the year under review, the tractor industry in India recorded sales of 7,87,304 tractors, a growth of 8%. In the first half of the year, the industry had good growth on back of a third consecutive year of good monsoon, increase in MSPs and Governments’ thrust on Agriculture and rural development. In the second half of the year, there was a reversal of the sentiment at large, resulting in slowing down of the demand.

In the domestic market, your Company sold 3,16,742 tractors, as compared to 3,04,019 tractors in the previous year, recording a growth of 4.2%. In a very competitive industry, your Company continued its market leadership for the 36^th consecutive year, with a market share at 40.2%.

Your Company’s growth was driven by good performance of all products under the Mahindra and Swaraj Brands. The new product trio of Mahindra NOVO, YUVO and JIVO have helped build the ‘technology leadership’ image for the Company. For the year under review, your Company launched Mahindra NOVO 65 and 75 HP tractors in the higher HP segment.

For the year under review, your Company exported 13,555 tractors which is a degrowth of 12.3% over the previous year. This degrowth is due to one-time trade stock correction in key export markets.

Spare parts net sales for the year stood at Rs. 691.7 crores (including exports of Rs. 56.5 crores) as compared to Rs. 605.3 crores (including exports of Rs. 52.9 crores) in the previous year, registering a growth of 14.3%.

Other Businesses

Mahindra Powerol

Under the Mahindra Powerol Brand, your Company has been a leader in providing power back-up solutions to the telecom industry for the past 12 years. To cater to changing customer needs, your Company has expanded presence in tele infra management and in the energy management solutions space.

In the retail genset business, your Company is the No. 2 brand by volume, offering a wide range of solutions from Lower KVA range to mid to higher KVA range. With a focus to provide greener solutions, your Company became first in the country to launch Gas Powered Gensets.

Construction Equipment Business

For the year under review, your Company (under the Mahindra EarthMaster brand) sold 1,286 Backhoe Loaders (BHLs) against 1,229 in Financial Year 2018, which is a growth of 4.6%. With growth in the infrastructure sector, the BHL market in India grew 24.5% over the previous year. Your Company continues to be at 4^th position in the BHL industry.

Your Company has presence in the fast-growing road construction equipment business through motor graders (under the Mahindra RoadMaster brand). For the year under review, your Company sold 319 motor graders as against 164 in the Financial Year 2018.

Two-Wheeler Business

For the Financial Year 2018-19, your Company sold 10,496 two-wheelers (including 6,480 exports).

In line with the revised strategy for the two-wheeler business, your Company through its subsidiary, Classic Legends Private Limited (CLPL) reintroduced the iconic brand ‘Jawa’ to the Indian market with the launch of new range of JAWA motorcycles - Jawa and Jawa Forty Two.

Current Year’s review

During the period 1^st April, 2019 to 28^th May, 2019, 69,280 vehicles were produced as against 72,813 vehicles and 65,200 vehicles were dispatched as against 67,244 vehicles during the corresponding period in the last year. During the same period 53,715 tractors were produced and 52,016 tractors dispatched as against 56,961 tractors produced and 57,290 tractors dispatched during the corresponding period in the previous year.

Going forward, economic activity is likely to be supported by several favourable factors. The India Meteorological Department has forecast ‘a near normal monsoon’ for the coming season. Bank credit off-take has improved and is becoming increasingly broad-based and there has been an increase in financial flows to the commercial sector. Further, the Reserve Bank of India has cut policy rates by 50 basis points in early 2019 and is expected to remain accommodative as inflation is projected to remain below its target level of 4% during the year. Importantly, stability in crude oil and other commodity prices too may bode well for growth.

However, there could be headwinds from greater than expected moderation in global growth and global trade as well as unanticipated volatility in global financial markets.

Finance

Financial Year 2018-19 started on a strong note, however cracks began to appear towards the second half of the year as the global expansion - while persisting overall - became more divergent. Business activity softened on account of trade tensions between the United States and China, ambiguity on Brexit and tightening of financial conditions amidst policy uncertainty. Global GDP which grew at a multi-year high of 3.8% in 2017, dropped to 3.6% in 2018 and is expected to taper down to 3.3% in 2019 as per IMF estimates.

The growth momentum in US remained strong amid strong employment generation and consumption growth, however the global headwinds have made the Federal Reserve pause on its interest rate hike path. Euro area economy lost more momentum than expected as consumer and business confidence weakened across all major economies causing the European Central Bank to remain accommodative for longer than expected.

Crude oil prices saw huge volatility during the financial year reflecting supply influences, including US policy on Iranian oil exports and fears of softening global demand.

Emerging market economies had a turbulent year as they contended with rising US interest rates, strengthening dollar, trade tensions and volatile crude prices. Countries with weaker fundamentals and homegrown problems such as Argentina and Turkey were the hardest hit. China’s economic growth rate which has been in a secular decline was the most affected by trade uncertainties. To ease the pressure on the economy and prevent a dramatic slowdown, Chinese officials steadily increased stimulus and also sought to control its burgeoning debt levels.

On the domestic front, while India remained one of the global outperformers in terms of growth, the momentum showed moderation in the second half. Consumer Price inflation declined sharply since mid-2018 driven by the sustained fall in food inflation, with the full year inflation printing at 3.4% against RBI’s target of 4%. RBI which raised policy rates by 50 bps in the first half of the year in response to the impact of Fed rate hikes, felt confident to give a 25 bps cut towards the end of the year supported by benign inflation and slowing growth.

The Indian rupee too came under sustained pressure during the first half due to higher crude oil prices and foreign portfolio outflows touching an all-time high of 74.48 in October, 2018. However, in the later part of the financial year, moderation in international crude oil prices, a dovish US Fed policy stance, buoyed appetite for emerging market assets led to an appreciation bias with Rupee closing the year at 69.20. The financial markets went through a challenging year as nonbanking financial companies (NBFCs) suffered liquidity issues, raising concerns of systemic risk and liquidity across the entire financial system. Systemic Liquidity was under pressure throughout the year leading the RBI to inject a total liquidity of Rs. 2.98 lakh crore in the market in 2018-19. Due to credit concerns coupled with tight liquidity, the transmission of RBI rate cuts is yet to be seen.

Your Company continued to focus on managing cash efficiently and ensured that it had adequate liquidity and back up lines of credit. During the year, your Company availed short term trade finance, including factoring of receivables. As on 31^st March, 2019, Rs. 448.54 crores of short term trade finance, including receivables factored, was outstanding. During the year, your Company repaid Rs. 151.54 crores of long term borrowings from internal accruals.

The Company’s Bankers continue to rate your Company as a prime customer and extend facilities/services at prime rates. Your Company follows a prudent financial policy and aims not to exceed an optimum financial gearing at any time. The Company’s total Debt to Equity Ratio was 0.08 as at 31^st March, 2019.

Your Company has been rated by CRISIL Limited (“CRISIL”), ICRA Limited (“ICRA”), India Ratings and Research Private Limited (“India Ratings”) and CARE Ratings Limited (“CARE”) for its Banking facilities. All have re-affirmed the highest credit rating for your Company’s Short Term facilities. For Long Term facilities and Non-Convertible Debenture (“NCD”) programme, CRISIL, ICRA and India Ratings have re-affirmed their credit ratings of CRISIL AAA/Stable, [ICRA]AAA (stable) and IND AAA/Stable for the respective facilities rated by them. With the above rating affirmations, your Company continues to enjoy the highest level of rating from all major rating agencies at the same time.

The AAA ratings indicate highest degree of safety regarding timely servicing of financial obligations and is also a vote of confidence reposed in your Company’s Management by the rating agencies. It is an acknowledgement of the strong credit profile of your Company over the years, resilience in earnings despite cyclical upturns/downturns, robust financial flexibility arising from the significant market value of its holdings and prudent management.

Your Company has also been identified as a “Large Corporate” as per the criteria under SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/144 dated November 26, 2018.

Investor Relations (IR)

Your Company continuously strives for excellence in its IR engagement with International and Domestic investors and has set up feedback mechanism to measure IR effectiveness. Structured conference calls and periodic investor/analyst interactions including one-on-one meetings, participation in investor conferences, quarterly earnings calls, Video Conferencing across various key geographies and annual analyst meet with the Chairman, Managing Director and Business Heads were organised during the year. Your Company interacted with around 685 Indian and overseas investors and analysts (excluding quarterly earnings calls and specific event related calls) during the year. Your Company always believes in leading from the front with emerging best practices in IR and building a relationship of mutual understanding with investor/analysts. As a key milestone in this continuing endeavour, your Company created a digital interactive annual review of the Company’s performance on the Corporate website to provide an interactive experience beyond what is available in the Annual Report. The Company had created its first Integrated Annual Report (for Financial Year 2018). Your Company also continues to organise con-call on Environment, Social and Corporate Governance (ESG) for analysts and investors, which has received excellent feedback from investors and ESG analysts for this pioneering initiative. Your Company ensures that critical information about the Company is available to all the investors by uploading all such information at the Company’s website. Your Company has created a ‘Group Investor Relations Council’ to share best practices across all the listed Group Companies and learn from each other. Your Company has also been nominated for the IR Magazine Awards - India 2019 in 3 categories namely Best financial reporting (large cap), Best use of media and technology and Best investor meetings (large cap).

Dividend

Your Directors are pleased to recommend a dividend of Rs. 8.50 per Ordinary (Equity) Share of the face value of Rs. 5 each on the Share Capital, payable to those Shareholders whose names appear in the Register of Members as on the Book Closure Date. The equity dividend outgo for the Financial Year 2018-19, inclusive of tax on distributed profits (after reducing the tax on distributed profits of Rs. 86.58 crores on the dividends declared by subsidiaries as of the date of this report and receivable during the current Financial Year 2019-20) would absorb a sum of Rs. 1,187.35 crores [as against Rs. 1,054.53 crores comprising the dividend of Rs. 7.50 per Ordinary (Equity) Share of the face value of Rs. 5 each on the enhanced share capital and tax thereon paid for the previous year]. Further, the Board of your Company decided not to transfer any amount to the General Reserve for the year under review.

The dividend pay-out is in accordance with the Company’s Dividend Distribution Policy.

Dividend Distribution Policy

The Dividend Distribution Policy containing the requirements mentioned in Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached as Annexure I and forms part of this Annual Report.

B . CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company, its subsidiaries, associates and joint ventures prepared in accordance with the Companies Act, 2013 and applicable Indian Accounting Standards along with all relevant documents and the Auditors’ Report form part of this Annual Report. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies, associates and joint ventures.

The Financial Statements as stated above are also available on the website of the Company and can be accessed at the Web-link: http://www.mahindra.com/ resources/FY19/AnnualReport.zip

Subsidiary, Joint Venture and Associate Companies

The Mahindra Group Companies continue to contribute to the overall growth in revenues and overall performance of your Company.

Tech Mahindra Limited, Flagship Company in the IT Sector, has reported a consolidated operating revenue of Rs. 34,742 crores in the current year as compared to Rs. 30,773 crores in the previous year, an increase of 13%. Its consolidated profit after tax after noncontrolling interests is Rs. 4,298 crores as compared to Rs. 3,800 crores in the previous year, an increase of 13%.

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 as compared to Rs. 7,884 crores in the previous year, a growth of 32%. The consolidated profit after tax after non-controlling interests for the year is Rs. 1,827 crores as compared to Rs. 1,185 crores in the previous year, a growth of 54%.

Mahindra Lifespace Developers Limited, the subsidiary in the business of real estate and infrastructure registered a consolidated operating income of Rs. 593 crores as compared to Rs. 566 crores in the previous year. The consolidated profit after tax after non-controlling interests for the year is Rs. 120 crores as compared to Rs. 101 crores in the previous year.

Mahindra Holidays & Resorts India Limited, the subsidiary in the business of timeshare registered a consolidated operating income of Rs. 2,239 crores as compared to Rs. 2,317 crores in the previous year. The consolidated profit after tax after non-controlling interests for the year is Rs. 60 crores as compared to Rs. 132 crores in the previous year.

Mahindra Logistics Limited, a listed subsidiary in the logistics business has registered a consolidated operating income of Rs. 3,851 crores as compared to Rs. 3,416 crores in the previous year, an increase of 13%. The consolidated profit after tax after non-controlling interests for the year is Rs. 86 crores as compared to Rs. 64 crores in the previous year, an increase of 34%.

Ssyangyong Motor Company, the Korean subsidiary of the Company has reported revenues of Rs. 24,184 crores in the current fiscal year as compared to Rs. 20,410 crores in the previous year. The loss for the year is Rs. 345 crores as compared to loss of Rs. 498 crores in the previous year.

The consolidated group profit before exceptional item and tax for the year is Rs. 7,280 crores as against Rs. 6,590 crores in the previous year - a growth of 10.47%. The consolidated profit after tax after non-controlling interest and exceptional items for the year is Rs. 5,315 crores as against Rs. 7,510 crores in the previous year.

During the year under review, Mahindra Susten Bangladesh Private Limited, Mahindra Knowledge Park Mohali Limited, Blitz 18-371 GmbH, Ssangyong Australia Pty Limited, Mahindra Summit Agriscience Limited, Mahindra Automotive Mauritius Limited, Mahindra Top Greenhouses Private Limited, Passeport Sante SL, PT Mahindra Accelo Steel Indonesia, Harkey Acquisition, L.L.C., USA, MSPE Urja S.R.L. and Mahindra Armored Vehicles Jordan, LLC. became subsidiaries of your Company.

Subsequent to the year end, Mahindra Finance CSR Foundation (Section 8 company) became subsidiary of your Company.

During the year under review, Merakisan Private Limited, Gipp Aero Investments Pty Ltd, Aerostaff Australia Pty. Ltd, Mahindra Sanyo Special Steel Private Limited and Kiinteisto Oy Himoksen Tahti 2, Finland ceased to be subsidiaries of your Company.

Subsequent to the year end, Orizonte Business Solutions Limited ceased to be a subsidiary of your Company.

During the year under review, Mahindra Retail Private Limited was converted into a Public Limited Company and accordingly changed its name to Mahindra Retail Limited. Further, Blitz 18-371 GmbH changed its name to Automobili Pininfarina GmbH, Industrial Cluster Private Limited changed its name to Mahindra Industrial Park Private Limited, Mahindra Racing SpA changed its name to PMTC Engineering SpA, Mahindra Bebanco Developers Limited changed its name to Mahindra Bloomdale Developers Limited, Harkey Acquisition, L.L.C., USA changed its name to Automobili Pininfarina Americas Inc. and EPC Industrie Limited changed its name to Mahindra EPC Irrigation Limited.

Subsequent to the year end, Machinepulse Tech Private Limited changed its name to Mahindra Teqo Private Limited and Passeport Sante SL changed its name to Holiday Club Canarias Vacation Club SLU.

During the year under review, Mahindra Ideal Lanka (Private) Limited and Mahindra Sanyo Special Steel Private Limited became Associates of your Company.

A Report on the performance and financial position of each of the subsidiaries, associates and joint venture companies included in the Consolidated Financial Statement and their contribution to the overall performance of the Company, is provided in Form AOC-1 and forms part of this Annual Report.

The Policy for determining material subsidiaries as approved by the Board is uploaded on the Company’s website and can be accessed at the Web-link: http:// www.mahindra.com/resources/FY19/AnnualReport.zip

C. JOINT VENTURES, ACQUISITIONS AND OTHER MATTERS

Resson

Your Company acquired a 10% equity stake on a fully diluted basis in Resson Aerospace Corporation, a start-up based in Canada and focussed on precision agriculture solutions, by subscribing to 800,402 Series C Preferred Shares. Resson uses imagery analytics to develop artificial intelligence based solutions to assist farmers in predicting anomalies in crops and to take preventive action. This investment is a step in your Company’s aim to bring pioneering technology to Indian farming.

Sampo

During the year, your Company increased its shareholding in Sampo Rosenlew, OY, from 35% to 49%, by investing approximately Euro 4.66 million. Sampo Rosenlew, based in Finland, makes combine harvesters with markets in Europe, Africa and CIS.

Joint Venture between EPC Industrie Limited and Top Greenhouses Ltd

During the year, Mahindra EPC Irrigation Limited (formerly known as EPC Industrie Limited), a subsidiary of the Company, formed a Joint Venture with Top Greenhouses Ltd, an Israeli company, wherein Mahindra EPC Irrigation Limited holds a 60% equity stake. Top Greenhouses is a leading player in Israel for protected cultivation, and the Joint Venture is expected to bring world-class greenhouse technology to Indian farmers.

OFD sold 40% stake in its subsidiary ODA to Advantage Group

During the year, Origin Fruit Direct B.V. (“OFD”) based out of Netherlands, an indirectly owned subsidiary of your Company sold 40% stake in its subsidiary named Origin Direct Asia Ltd., Hong Kong (“ODA”) to Advantage Group Holdings Ltd. (“Advantage”). Advantage is an affiliate to Zest Fruit Pty Ltd. (“Zest”) based out of South Africa which is a large grower/distributor of fruits. Prior to the transaction, Zest was a supplier of fruits to OFD and intended to expand its operations in China through an investment in ODA. As part of the overall transaction, there is a long-term supply agreement that has been executed between ODA and Zest. By entering into this relationship it is envisaged that ODA’s market position would strengthen due to its “direct linkage” to Zest, a major grower resulting in security of stable fruit supply for ODA.

Mahindra Agri enters into Crop Care JV with Sumitomo Corporation

In October, 2018, Mahindra Agri Solutions Limited (“MASL”), a subsidiary of your Company entered into a definitive agreement with Sumitomo Corporation, Japan (“SC”) to form a joint venture company named Mahindra Summit Agriscience Limited (“MSAL”) to be held 60% by MASL and 40% by SC. As a first step MASL spun-off its existing Crop Care business into MSAL, pursuant to which in April, 2019, SC along with its affiliates purchased a 40% stake in MSAL from MASL. The combined strength of both the shareholders will leapfrog MSAL into the next orbit of growth. The partnership envisages a pipeline of specialty, new generation products with unique and latest molecules to effectively manage pest and insect related challenges faced by farmers. With this, MASL became the first Indian company to have a JV partner that has deep relationships with large Japanese R&D houses.

Automobili Pininfarina, the World’s Newest Sustainable Luxury Car Brand

During the year, your Company incorporated a new step down subsidiary named Automobili Pininfarina GmbH (“AP”) based out of Munich, Germany. Currently, AP is 100% owned by a newly incorporated Mauritian holding company named Mahindra Automotive Mauritius Ltd. AP will design, engineer and manufacture high technology, extreme performance and luxury electric vehicles. The intention is to launch an electric hypercar in 2020 offering extreme performance.

In May 2016, your Company’s Joint Venture entity (held 40% by the Company and 60% by Tech Mahindra) had acquired a majority stake in Pininfarina SpA. AP will leverage Pininfarina’s legendary automotive design expertise.

Capital Raising by Ssangyong Motor Company, a South Korean listed subsidiary of your Company through a Third Party Allotment Process

During the year under review, Ssangyong Motor Company (“SYMC”), a South Korean listed subsidiary of your Company, received approval of its Shareholders in October, 2018 for raising KRW 50 billion through equity issuance at a minimum price of KRW 4,200 per share, to meet future capex requirement for new product development and to strengthen its Balance Sheet.

Pursuant to this, and as approved by SYMC’s Board of Directors, in January, 2019, SYMC issued 1,18,90,606 shares at a price of KRW 4,205 per share, by way of Third Party Allotment process, in accordance with Korean Regulations. Your Company was the sole subscriber to this issuance and invested KRW 50 billion (approximately Rs. 316.5 crores). Consequently, your Company’s equity stake in SYMC increased from 72.46% to 74.65%.

Consolidation of Smartshift and Porter

Orizonte Business Solutions Limited (“Smartshift”) was a step down subsidiary of your Company which owned and operated a technology enabled load exchange marketplace platform for matching the needs of cargo owners with transporters. Resfeber Labs Private Limited (“Porter”) is in a similar business. As mentioned in the last Annual Report of your Company, in order to leverage synergies and obtain greater economies of scale for both businesses, your Company agreed to a Scheme to merge Smartshift and Porter and make additional investments into both these entities.

The National Company Law Tribunal approved the Scheme and the Scheme has been made effective from 25^th April, 2019. Pursuant to the merger being effective, Smartshift ceased to be a subsidiary of the Company. Post-merger, the shareholding of your Company and its subsidiaries in Porter (the combined entity) taken on a fully diluted basis is 30.8% for the Company, 2.5% for Mahindra & Mahindra Financial Services Limited and 6.9% for Mahindra Trucks and Buses Limited.

Mahindra and Ford strengthen ongoing strategic collaboration

In the Financial Year 2017-18, your Company had announced its intent to explore a strategic alliance with Ford Motor Company (“Ford”), to leverage Ford’s global reach and expertise and your Company’s scale in India and its successful operational model during a period of unprecedented transformation in the global automotive industry. To that end the Company had signed several MoUs with Ford which included specific areas of connected vehicle projects, battery electric vehicle, powertrains and product development of midsize and compact SUVs.

In pursuance of the above, your Company and Ford signed definitive agreements for:

- Powertrain sharing: As part of this arrangement, your Company would supply Bharat Stage VI (BS-VI) compliant gasoline engines to Ford for product programs in India.

- Connected car: As per this agreement, your Company and Ford would jointly develop connected vehicle solutions to be deployed across your Company’s and Ford products.

- Development and supply of SUVs: This arrangement entails development, manufacturing and supply of a new mid-size SUV on a Mahindra product platform by your Company for Ford.

The above agreements are significant steps towards strengthening the ongoing strategic collaboration between your Company and Ford.

Mahindra First Choice Services Limited acquires key assets of Carnation Auto (India) Private Limited

During this year, Mahindra First Choice Services Limited (“MFCS”), a subsidiary of your Company, had acquired key assets of Carnation Auto (India) Private Limited (“CAPL” or “Carnation”). This was an asset acquisition under IBC liquidation process (Insolvency & Bankruptcy Code) run by the Official Liquidator of CAPL appointed by an order of National Company Law Tribunal (“NCLT”). MFCS acquired key assets of Carnation’s car servicing business including the trademark ‘Carnation’, its website, software licenses and Carnation’s franchisee workshop network. The asset acquisition does not include the liabilities and past dues. This strategic move will strengthen the MFCS business and further consolidate its leadership position in the Indian Automotive Aftermarket Segment.

Divestment in Mahindra Sanyo Special Steel Private Limited

During this year, your Company has sold 26,36,401 Equity Shares (22% of the share capital) of Rs. 10 each in Mahindra Sanyo Special Steel Private Limited (“MSSSPL”), a subsidiary of your Company. Pursuant to this transaction, the shareholding of the Company in MSSSPL has come down from 51% to 29% of its share capital. Consequently, MSSSPL ceased to be a subsidiary of the Company. Consideration received from such sale was Rs. 146,32,02,555. Subsequently MSSSPL has further raised capital from its existing shareholders and due to non-subscription to the capital issue of MSSSPL by your Company, the stake of your Company in MSSSPL has further diluted to 22.81%.

Scheme of Merger by Absorption of Mahindra Vehicle Manufacturers Limited, a wholly owned subsidiary of the Company (“MVML”) with the Company

Subsequent to the year end, the Board of Directors of the Company at its Meeting held on 29^th May, 2019, subject to requisite approvals/consents, approved the Scheme of Merger by Absorption of Mahindra Vehicle Manufacturers Limited, a wholly owned subsidiary of the Company (“MVML”) with the Company and their respective Shareholders (“Scheme”) under the provisions of sections 230 to 232 of the Companies Act, 2013. The Appointed Date of the Scheme would be 1^st April, 2019 and the entire assets and liabilities of MVML would be transferred to and recorded by the Company at book values. The entire share capital of MVML is held by the Company. Upon the Scheme being effective, all shares (preference and equity) held by the Company in MVML as on the Effective Date shall stand cancelled, without any further act or deed.

D. INTERNAL FINANCIAL CONTROLS

The Corporate Governance Policies guide the conduct of affairs of your 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.

Your Company’s Financial Statements are prepared on the basis of the Significant Accounting Policies that are carefully selected by Management and approved by the Audit Committee and the Board. These Accounting policies are reviewed and updated from time to time.

Your Company uses SAP ERP Systems as a business enabler and to maintain its Books of Account. The transactional controls built into the SAP ERP systems ensure appropriate segregation of duties, appropriate level of approval mechanisms and maintenance of supporting records. The Information Management Policy reinforces the control environment. The systems, Standard Operating Procedures and controls are reviewed by Management. These systems and controls are audited by Internal Audit and their findings and recommendations are reviewed by the Audit Committee which ensures the implementation.

Your Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations. Your Company’s Internal Financial Controls were deployed through Internal Control -Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), that addresses material risks in your Company’s operations and financial reporting objectives.

Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by The Institute of Chartered Accountants of India. Based on the results of such assessments carried out by Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.

Your Company recognises Internal Financial Controls cannot provide absolute assurance of achieving financial, operational and compliance reporting objectives because of its inherent limitations. Also, projections of any evaluation of the Internal Financial Controls to future periods are subject to the risk that the Internal Financial Control may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.

E. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of your Company’s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

F. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All Related Party Transactions entered during the year were in the ordinary course of business and on arms length basis. During the year under review, your Company had entered into Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, with Mahindra Vehicle Manufacturers Limited, a wholly owned subsidiary of your Company. These transactions too were in the ordinary course of business of your Company and were on arms length basis, details of which, as required to be provided under section 134(3)(h) of the Companies Act, 2013 are disclosed in Form AOC-2 as Annexure II and forms part of this Annual Report.

The Policy on Materiality of and Dealing with Related Party Transactions as approved by the Board is uploaded on the Company’s website and can be accessed at the Web-link: http://www.mahindra.com/resources/FY19/ AnnualReport.zip

G. AUDITORS

Statutory Auditors and Auditors’ Report

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 71^st Annual General Meeting (AGM) held on 4^th August, 2017 until the conclusion of the 76^th AGM of the Company to be held in the year 2022.

The Auditors’ Report is unmodified i.e. it does not contain any qualification, reservation or adverse remark or disclaimer.

Secretarial Auditor

Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Sachin Bhagwat, Practicing Company Secretary (Certificate of Practice Number: 6029) to undertake the Secretarial Audit of the Company.

The Company has annexed to this Board’s Report as Annexure III, a Secretarial Audit Report given by the Secretarial Auditor.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer.

Secretarial Audit of Material Unlisted Indian Subsidiary

Mahindra Vehicle Manufacturers Limited (“MVML”), a material subsidiary of the Company undertakes Secretarial Audit every year under Section 204 of the Companies Act, 2013. The Secretarial Audit of MVML for the Financial Year 2018-19 was carried out pursuant to Section 204 of the Companies Act, 2013 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Secretarial Audit Report of MVML submitted by Mr. Sachin Bhagwat, Practicing Company Secretary, does not contain any qualification, reservation or adverse remark or disclaimer.

Annual Secretarial Compliance Report

The Company has undertaken an audit for the Financial Year 2018-19 for all applicable compliances as per Securities and Exchange Board of India Regulations and Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report duly signed by Mr. Sachin Bhagwat has been submitted to the Stock Exchanges within 60 days of the end of the Financial Year and is annexed at Annexure IV to this Board’s Report.

Cost Auditors

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.

The Board of Directors on the recommendation of the Audit Committee, appointed Messrs D. C. Dave & Co., Cost Accountants (Firm Registration Number 000611), as the Cost Auditors of the Company for the Financial Year 2019-20 under section 148 of the Companies Act, 2013. Messrs D. C. Dave & Co. have confirmed that their appointment is within the limits of section 141(3)(g) of the Companies Act, 2013 and have also certified that they are free from any disqualifications specified under section 141(3) and proviso to section 148(3) read with section 141(4) of the Companies Act, 2013.

The Audit Committee has also received a Certificate from the Cost Auditors certifying their independence and arm’s length relationship with the Company.

As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking Members’ ratification for the remuneration payable to Messrs D. C. Dave & Co., Cost Auditors is included in the Notice convening the Annual General Meeting.

Cost Records

As per Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014, your Company is required to maintain cost records and accordingly, such accounts and records are maintained.

Reporting of Frauds by Auditors

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.

H. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES

Particulars of the loans given, investment made or guarantee given or security provided and the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient of the loan or guarantee or security are provided in Note Nos. 6 and 35 to the Financial Statements.

I. PUBLIC DEPOSITS AND LOANS/ ADVANCES

Your Company had discontinued its Fixed Deposit Scheme for 36 months with effect from the close of office hours on 31^st January, 2014 and has also discontinued acceptance of Fixed Deposits with effect from 1^st April, 2014.

All the deposits from public and Shareholders had already matured as at 31^st March, 2017. Out of the total outstanding of 41 deposits of Rs. 17.24 lakhs from the public and shareholders as at 31^st 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.

The particulars of loans/advances/investments, etc., required to be disclosed pursuant to Para A of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are furnished separately.

The transaction(s) of the Company with a company belonging to the promoter/promoter group which hold(s) more than 10% shareholding in the Company as required pursuant to para A of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is disclosed separately in the Financial Statements of the Company.

J. EMPLOYEES

Key Managerial Personnel (KMP)

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

(a) 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

There has been no change in the KMPs during the year under review.

Employees’ Stock Option Scheme

During the year under review, on the recommendation of the Governance, Nomination and Remuneration Committee of your Company, the Trustees of Mahindra & Mahindra Employees’ Stock Option Trust have granted Stock Options to employees under the Mahindra & Mahindra Limited Employees Stock Option Scheme 2010. No Stock Options have been granted to employees under the Mahindra & Mahindra Limited Employees Stock Option Scheme 2000.

The Company has in force the following Schemes which get covered under the provisions of SEBI (Share Based Employee Benefits) Regulations, 2014 (SBEB Regulations):

1. Mahindra & Mahindra Limited Employees Stock Option Scheme - 2000 (2000 Scheme)

2. Mahindra & Mahindra Limited Employees Stock Option Scheme - 2010 (2010 Scheme)

3. M&M Employees Welfare Fund No. 1

4. M&M Employees Welfare Fund No. 2

5. M&M Employees Welfare Fund No. 3

There are no material changes made to the above Schemes and these Schemes are in compliance with the SBEB Regulations. Your Company’s Auditors, Messrs B S R & Co. LLP, have certified that the Company’s above-mentioned Schemes have been implemented in accordance with the SBEB Regulations, and the Resolutions passed by the Members for the 2000 Scheme and the 2010 Scheme.

Information as required under the SBEB Regulations read with SEBI Circular CIR/CFD/POLICY CELL/2/2015 dated 16^th June, 2015 have been uploaded on the Company’s website and can be accessed at the Web-link: http:// www.mahindra.com/resources/FY19/AnnualReport.zip

Particulars of Employees and related disclosures

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

Details of employee remuneration as required under provisions of section 197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are available at the Registered Office of the Company during working hours, 21 days before the Annual General Meeting and shall be made available to any Shareholder on request. Such details are also available on your Company’s website and can be accessed at the Web-link: http://www.mahindra.com/resources/FY19/ AnnualReport.zip

Disclosures with respect to the remuneration of Directors, KMPs and employees as required under section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure V to this Report.

Industrial Relations

The year under review witnessed a very positive Industrial Relations Scenario across all manufacturing locations for the Automotive and Farm Equipment Sectors.

Your Company’s focus continues towards propagating proactive and employee centric practices. The transformational work culture initiative that aims to create an engaged workforce with an innovative, productive and a competitive shop-floor ecosystem continues to grow in strength. Some examples of the programs put in place include ‘Rise for Associates’, industrial relations skills for frontline officers, cultural diagnostics projects, transformational work culture projects, e-compliance, e-portal for reward and recognition of associates and Code of Conduct for associates. The Transformational Work Culture Committee (TWCC) leads the design and implementation of these programs.

With the objective of developing skills and fostering togetherness at the workplace, your Company implements multiple training and engagement programs on an ongoing basis. These include positive attitude, stress management, creativity, team effectiveness, safety and environment, quality tools, TPM, skill building programs, customer focus and a program for union leadership development.

The Mahindra Skill Excellence initiative is a holistic approach to enhance the skill and capabilities of shop floor associates and has received good participation across manufacturing facilities. As a result of this effort, associates from your Company have participated at various international skill competitions which include Beijing Arc Cup and Euroskills 2018. At the Beijing Arc Cup, a female associate from your Company was awarded as ‘Outstanding Female Welder’.

In an endeavor to improve quality, reduce cost, ensure safety and improve productivity, your Company’s shop floor associates generated on an average 18 ideas per person.

Significant emphasis was also laid towards raising awareness on health and wellness of employees through annual medical check-ups, health awareness activities. Diet food has become a way of life over the past three years. Your Company maintains an ‘Employee Health Index’ at an individual level and this has been a useful tool in identifying employees who require focused counselling and monitoring.

Proactive and employee-centric shop floor practices, a focus on transparent communication of business goals, an effective concern resolution mechanism, and a firm belief that employees are the most valuable assets of the Company, are the cornerstone of your Company’s employee relations approach. An ‘open door policy’ with constant dialogue to create win-win situations, have helped your Company build trust and harmony.

The industrial relations scenario continued to be largely positive across all the manufacturing locations. Bonus settlements were amicably agreed upon at all locations.

In a span of 16 months (September, 2017 to March, 2019), nine wage settlements with various Unions were amicably concluded with an overall productivity rise ranging from 10% to 15%.

The sustained efforts towards building a transformational work culture resulted in zero production loss in the Financial Year 2018-19 and helped create a collaborative, healthy and productive work environment.

Safety, Occupational Health and Environment

During the year under review, your Company revised its Safety, Occupational Health & Environment (SOH&E) Policy. The leadership’s commitment towards SOH&E, is demonstrated through inclusion of many new compliances along with its voluntary commitments. Implementation of various initiatives under the policy and achievement to set objectives were assessed through management reviews.

At each Plant location, annual events were organised and commemorated like Road Safety Week, National Safety Day/ Month, Fire Service Week. Awareness programs were conducted for all stakeholders through classroom sessions and e-learning modules. To strengthen the safety culture, Behaviour Based Safety (BBS) - Level 2 is being implemented at all Plants.

Your Company carried out statutory safety audits, Fire Equipment Audit, Risk Assessment of Licensed premises, as per the amended legal requirements. For the year under review, your Company achieved substantial reduction in the fire load by way of installation of modern equipment in critical areas and relocation of flammable material as appropriate.

In line with the ‘Go Green’ philosophy, your Company is continuously adopting new techniques to eliminate and minimize the environmental impact. Various projects have been implemented by your Company in air, water-waste water management and solid waste management. These initiatives are also extended to the supplier community of your Company.

During the year under review, your Company signed agreements with Extended Producer Responsibility Organizations (EPRO) recognized by Pollution Control Boards for 100% integral Plastic Waste Management. These agreements include the plastic waste generated at premises of suppliers and dealers of your Company.

Your Company continued the commitment to improve the wellbeing of employees and contract associates through various activities under project ‘Parivartan’. This includes activities like fitness improvement challenge (MRise), Mindfulness, Walkathon, Yoga, Zumba, medical check-ups, health consultation and counselling. As a result of many initiatives, the average Health index of its employees has improved as compared to the previous year. Further, all locations observed World Health Day, World Heart Day, World Kidney Day and World Diabetes Day. All associates of your Company were trained in First Aid.

To create awareness among society at large, your Company has installed a display screen that displays real time readings for all parameters of Air Quality. This screen is installed just outside the manufacturing plant in Mumbai, which is located on the Western Express highway with high density vehicular traffic.

Your Company has adopted the standard on Global Reporting Initiative (GRI) and has undertaken various projects aimed at climate change mitigation, sustainable source use and protection of bio-diversity. Some examples of successful initiatives are Waste Heat Recovery, Green Platinum rated Buildings in Existing Building Category, Projects for Carbon Neutrality and Solar power installation.

In addition to above, World Ozone Day, World Environment Day, No Print Day, World Earth Day, World Water Day and Energy Conservation Week and Water Conservation Week are observed on an annual basis.

Certifications/Recertifications

All Plants of your Company have been recertified under standard ISO 14001: 2015 and OHSAS 18001: 2007. Further, all Plants are in the process of implementing, integrated management system along with adopting the revised standard ISO 45001:2018.

As a result of efforts over the last few years, nine plants of your Company are certified ‘Zero Waste to Landfill’, by Intertek USA.

The Company revises its targets under SOH&E year on year, and the performance against these targets are reviewed periodically by Senior Management. Focused initiatives involving all stakeholders coupled with management reviews have helped to improve the SOH&E performance of your Company in the period 2018-19.

K. BOARD & COMMITTEES

Directors

As mentioned in the previous Annual Report, Mr. S. B. Mainak resigned from the Board of the Company and ceased to be a Director of the Company with effect from 11^th May, 2018.

Mr. M. M. Murugappan and Mr. Nadir B. Godrej were re-appointed at the 72^nd Annual General Meeting held on 7^th August, 2018, as Independent and Non-Executive Directors of the Company for a second term of two consecutive years each commencing from 8^th August, 2018 to 7^th August, 2020.

Appointment of Mr. Vijay Kumar Sharma

Pursuant to the recommendation of the Governance, Nomination and Remuneration Committee, the Board at its Meeting held on 14^th November, 2018, appointed Mr. Vijay Kumar Sharma as an Additional Non-Executive Non-Independent Director of the Company representing Life Insurance Corporation of India, liable to retire by rotation with effect from 14^th November, 2018. He shall hold office as an Additional Director upto the date of the Annual General Meeting of the Company to be held on 7^th August, 2019.

Mr. Vijay Kumar Sharma, is a Post-Graduate and superannuated as Chairman, Life Insurance Corporation of India on 31^st December, 2018. From December, 2010 to November, 2013, he served as Managing Director & Chief Executive Officer, LIC Housing Finance Limited (LICHFL), a premier housing finance company in the country. He is also on the Boards of various companies.

The Company has received the requisite Notice from a Member in writing proposing his appointment as a Non-Executive Non-Independent Director of the Company.

Retirement by rotation

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

Re-appointment of Independent Directors for a Second Term

The Governance, Nomination and Remuneration Committee, on the basis of performance evaluation of Independent Directors and taking into account the external business environment, the business knowledge, acumen, experience and the substantial contribution made by Dr. Vishakha N. Desai and Mr. Vikram Singh Mehta during their tenure, has recommended to the Board that continued association of Dr. Vishakha N. Desai and Mr. Vikram Singh Mehta as Independent Directors would be beneficial to the Company. Based on the above and the performance evaluation of Independent Directors, the Board recommends re-appointment of:

(i) Dr. Vishakha N. Desai for a further period from 8^th August, 2019 to 30^th April, 2024; and

(ii) Mr. Vikram Singh Mehta for a further period of five consecutive years commencing from 8^th August, 2019 to 7^th August, 2024 to hold office as Independent Directors of the Company, not liable to retire by rotation on the Board of the Company. The Company has received the requisite Notices from a Member in writing proposing their appointment as Independent Directors.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Completion of Tenure of Independent Directors

Mr. R. K. Kulkarni and Mr. Anupam Puri would cease to hold office as Independent Directors of the Company from 8^th August, 2019, upon completion of their tenure as approved by the Shareholders at the 68^th AGM of the Company.

Mr. R. K. Kulkarni has been on the Board of the Company for around 22 years and has enriched the Board with his immense experience in all aspects of corporate law, M&A, litigations, strategy and management, financial reporting and processes. His vast experience in advising large Indian and multinational clients in various business sectors and expertise in legal and fiscal management was pivotal in steering the growth & diversification initiatives of the Company over a period of time.

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.

Quote from Executive Chairman

“Mr. R. K. Kulkarni joined the Board of the Company in 1997 and played a key role in nurturing the Legal, Compliance and Governance culture of your Company.

Apart from being a leading proponent of governance, ethics and values, he also brought a commercial mindset while framing, evaluating and executing strategies of your Company. This rare combination of qualities added a valuable perspective and dimension to the deliberations and decision making of the Board.

He has always brought a solution based approach to issues while remaining committed to the highest standards of governance and excellence. He has made significant contributions as a Director of the Company and as a member of several of its committees and his inputs have greatly benefited the Board and the Company.

I am grateful for Mr. Kulkarni’s counsel and friendship. Even though his term as a Director is ending, he has assured the Management of his continuous availability and support, which the Management will certainly draw upon. I wish him many years of good health and happiness.”

Mr. Anupam Puri has been on the Board of the Company for around 18 years. He brought with him a global mindset and experience in driving business success in markets around the world with an understanding of diverse business environments, economic conditions, sensitivity to cultural diversity and adaptability. He provided thought leadership in business strategy and handling various organizational issues with his immense international knowledge, financial expertise and experience. 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.

Quote from Executive Chairman

“Mr. Anupam Puri, fondly known as “Tino” joined the Board of your Company in 2001.

With his extensive experience in business strategy and financial structuring, he critically and constructively challenged management on various business and growth proposals put forth at the Strategic Investment Committee and the Board, and his concurrence provided valuable validation to the Management and Board in pursuing such opportunities.

Tino’s expertise in striking a delicate balance between maintaining independence and governance oversight and providing constructive support to Management (especially on matters of strategy and M&A) has been particularly valuable. He championed the cause of fostering a culture that promotes long-term thinking, discipline, and accountability.

Tino has been on your Company’s Board for a long time. The baseline model he has helped to create will continue to guide your Company in its pursuit of organic and inorganic growth opportunities. I wish Tino many years of good health and happiness.”

The Board placed on record its deep appreciation of the valuable services rendered by Mr. R. K. Kulkarni and Mr. Anupam Puri during their tenure as Directors of the Company.

Performance Evaluation

Pursuant to the provisions of the Companies Act, 2013, and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual evaluation of its own performance and that of its Committees as well as performance of 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.

The performance evaluation of Committees was based on criteria such as structure and composition of Committees, attendance and participation of member of the Committees, fulfilment of the functions assigned to Committees by the Board and applicable regulatory framework, frequency and adequacy of time allocated at the Committee meetings to fulfil duties assigned to it, adequacy and timeliness of the Agenda and Minutes circulated, comprehensiveness of the discussions and constructive functioning of the Committees, effectiveness of the Committee’s recommendation for the decisions of the Board, etc.

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 Executive Chairman of the Company was also carried out by the Independent Directors, taking into account the views of the Managing Director and Non-Executive Directors. The Directors expressed their satisfaction with the evaluation process. The Independent Directors and Executive Chairman also carried out performance evaluation of the Managing Director of the Company.

Policies

Your Company has adopted the following Policies which, inter alia, include criteria for determining qualifications, positive attributes and independence of a Director:

(a) Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management;

(b) Policy for remuneration of the Directors, Key Managerial Personnel and other employees.

Policy (a) mentioned above includes the criteria for determining qualifications, positive attributes and independence of a Director, identification of persons who are qualified to become Directors and who may be appointed in the Senior Management Team in accordance with the criteria laid down in the said Policy, succession planning for Directors and Senior Management, and Policy statement for Talent Management framework of the Company.

Policy (b) mentioned above sets out the approach to Compensation of Directors, Key Managerial Personnel and other employees in the Company.

During the year under review, your Company made changes in the Policies mentioned at (a) and (b) above to align with the amendments made pursuant to the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Policies mentioned at (a) and (b) above are available on the website at the following link: http://www.mahindra. com/resources/FY19/AnnualReport.zip

Familiarisation Programme for Independent Directors/Non-Executive Directors

The Members of the Board of the Company are afforded many opportunities to familiarise themselves with the Company, its Management and its operations. The Directors are provided with all the documents to enable them to have a better understanding of the Company, its various operations and the industry in which it operates.

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.

Executive Directors and Senior Management provide an overview of the operations and familiarize the new Non-Executive Directors on matters related to the Company’s values and commitments. They are also introduced to the organization structure, constitution of various committees, board procedures, risk management strategies etc.

Strategic Presentations are made to the Board where Directors get an opportunity to interact with Senior Management. Directors are also informed of the various developments in the Company through Press Releases, emails etc.

The Company has a web based portal i.e. Board portal, accessible to all the Directors which, inter alia, contains the following information:

- Roles, responsibilities and liabilities of Independent Directors under the Companies Act, 2013 and the SEBI Listing Regulations.

- Board Minutes, Agenda and Presentations.

- Annual Reports.

- Code of Conduct for Directors.

- Terms and conditions of appointment of Independent Directors.

Pursuant to Regulation 25(7) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the “Listing Regulations”), the Company imparted various familiarisation programmes for its Directors including review of Investments of the Company by Strategic Investment Committee, Industry Outlook at the Board Meetings, Regulatory updates at Board and Audit Committee Meetings covering changes with respect to the Companies Act, the Listing Regulations, Taxation and other matters, 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, Plant Visit, Meeting with Senior Executive(s) of your Company, 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/FY19/AnnualReport.zip

Directors’ Responsibility Statement

Pursuant to section 134(5) of the Companies Act, 2013, your Directors, based on the representations received from the Operating Management, and after due enquiry, confirm that:

(a) in the preparation of the annual accounts for the Financial Year ended 31^st March, 2019, the applicable accounting standards have been followed;

(b) they had in consultation with Statutory Auditors, selected accounting policies and applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2019 and of the profit of the Company for the year ended on that date;

(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the

Company and for preventing and detecting fraud and irregularities;

(d) they have prepared the annual accounts on a going concern basis;

(e) they have laid down adequate Internal Financial Controls to be followed by the Company and such Internal Financial Controls were operating effectively during the Financial Year ended 31^st March, 2019;

(f) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively throughout the Financial Year ended 31^st March, 2019.

Board Meetings and Annual General Meeting

A calendar of Meetings is prepared and circulated in advance to the Directors.

During the year 1^st April, 2018 to 31^st March, 2019, five Board Meetings were held on: 29^th May, 2018, 7^th August, 2018, 14^th November, 2018, 7^th & 8^th February, 2019 and 25^th March, 2019. The 72^nd Annual General Meeting (AGM) of the Company was held on 7^th August, 2018.

Meetings of Independent Directors

The Independent Directors of your Company meet before the Board Meetings without the presence of the Executive Chairman or the Managing Director or other Non-Independent Director or Chief Financial Officer or any other Management Personnel.

These Meetings are conducted in an informal and flexible manner to enable the Independent Directors to discuss matters pertaining to, inter alia, review of performance of Non-Independent Directors and the Board as a whole, review the performance of the Executive Chairman of the Company (taking into account the views of the Executive and Non-Executive Directors), review the performance of the Company, 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.

Audit Committee

The Committee comprises of four 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 and possess strong accounting and financial management knowledge. The Company Secretary of the Company is the Secretary of the Committee.

All the recommendations of the Audit Committee were accepted by the Board.

L. GOVERNANCE

Corporate Governance

Your Company has a rich legacy of ethical governance practices many of which were implemented by the Company, even before they were mandated by law. Your Company is committed to transparency in all its dealings and places high emphasis on business ethics. A Report on Corporate Governance along with a Certificate from the Statutory Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report.

Vigil Mechanism

The Vigil Mechanism as envisaged in the Companies Act, 2013, the Rules prescribed thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is implemented through the Company’s Whistle Blower Policy to enable the Directors, employees and all stakeholders of the Company to report genuine concerns, to provide for adequate safeguards against victimisation of persons who use such mechanism and make provision for direct access to the Chairman of the Audit Committee.

Whistle Blower Policy of your Company is available on the Company’s website and can be accessed at the Web-link: http://www.mahindra.com/resources/FY19/ AnnualReport.zip

Further details are available in the Report on Corporate Governance that forms part of this Annual Report.

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

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. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment and the Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. The Policy is gender neutral.

During the year under review, 4 complaints with allegations of sexual harassment were filed, which were disposed-off as per the provisions of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and as of 31^st March, 2019, no complaint was pending.

Business Responsibility Report

The ‘Business Responsibility Report’ (BRR) of your Company for the year 2018-19 forms part of this Annual Report as required under Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Your Company strongly believes that sustainable and inclusive growth is possible by using the levers of environmental and social responsibility while setting aspirational targets and improving economic performance to ensure business continuity and rapid growth. Your Company is committed to leverage ‘Alternative Thinking’ to build competitive advantage in achieving high shareholder returns through customer centricity, innovation, good governance and inclusive human development while being sensitive to the environment.

Risk Management

Your Company has a well-defined risk management framework in place. The risk management framework works at various levels across the enterprise. These levels form the strategic defence cover of the 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 of the Board 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.

Your Company has developed and implemented a Risk Management Policy which is approved by the Board. The Risk Management Policy, inter alia, includes identification of risks, including cyber security and related risks and also 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 organisation.

M. CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY

Corporate Social Responsibility (CSR)

With a Core Purpose which states that “we will challenge conventional thinking and innovatively use all our resources to drive positive change in the lives of our stakeholders and communities across the world, to enable them to Rise”, it is amply evident that Corporate Social Responsibility is integral to, and at the core of whatever is done at Mahindra. 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. While the Company supported 18,974 Nanhi Kalis, the Mahindra Group supported the education of 66,348 Nanhi Kalis and the balance were supported by other donors. In Financial Year 2019, 71,394 girls at secondary school level were provided access to digital tablets preloaded with smart, audio visual educational content.

- Financial Year 2019 was a milestone year for the Mahindra Pride Programme, with the Mahindra Pride Classrooms crossing the 1,00,000 outreach mark. Through 2,597 Mahindra Pride Classrooms, 1,19,349 youth from ITI’s, Polytechnics and Arts & Science colleges were trained in English, Lifeskills and job preparedness, across 14 States. Of these 79,566 students were supported by the Company. The Mahindra Group also supported 9 Mahindra Pride Schools through which 6,561 youth from socially and economically disadvantaged communities were trained in ITES, Retail Hospitality & Auto Service and 100% of them were placed in lucrative jobs. The Company supported 5 Mahindra Pride Schools in Chandigarh, Chennai, Srinagar, Hyderabad and Varanasi through which 3,108 youth received livelihood training.

- Over 4,300 students benefitted through a variety of Scholarship Programs, which ranged from providing opportunities to youth from low income group families to undergo diploma courses at vocational education institutes, to allowing meritorious students to pursue their post graduate studies at reputed universities overseas, to allowing meritorious and deserving students to study at the Mahindra United World College in Pune.

- In the area of public health, your Company sponsored its 20^th Lifeline Express (hospital on a train) in Arrah Bihar, through which medical care, treatment, and surgical intervention was provided to 11,119 individuals.

- Through Mahindra Hariyali 0.95 million trees were planted which contributed to improving green cover and protecting bio-diversity in the country. Of these 0.83 million trees were planted in the Araku valley, which besides greening the environment also provided livelihood support to tribal farmers growing coffee in this region. The Mahindra Group as a whole planted 1.45 million trees pan India.

- 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.

- Through the Wardha Farmer Family Project and Krishi Mitra Project your Company continued to support small and marginal farmers by training them in effective farming practices including soil health, crop planning, creating model farms with biodynamic farming practices, and increasing the water table with a view to increasing crop productivity.

- Rise for Safe Roads: The first of its kind in India ‘Road Safety’ project aims to make the Mumbai Pune Express way a near ‘Zero Fatality Corridor’ by 2021. Interventions under 4E’s are conducted i.e. Engineering, Enforcement, Education and

Emergency Response. In addition, long haul truck drivers went through the Anticipatory Driving and Action Prevention Training (ADAPT™) program.

- The unique ESOPs (Employee Social Options) platform provided 26,126 employees a menu of volunteering opportunities enabling them to contribute 1,88,833 - person hours towards giving back to society.

During the last financial year, your Company received a “4 Good” rating from Economic Times, for overall excellence in CSR, as part of the ‘ET2Good4Good’ CSR Rating. Further, your Company was awarded the CII National Award for Excellence in Water Management and FICCI CSR Awards in Environment Sustainability Category for the Integrated Watershed Management Project in Bhopal.

CSR Policy

The Corporate Social Responsibility Committee had formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) which was subsequently adopted by it and is being implemented by the Company. The CSR Policy including a brief overview of the projects or programs undertaken can be accessed at the Company’s website through the Web-link: http:// www.mahindra.com/resources/FY19/AnnualReport.zip

CSR Committee

The CSR Committee comprises of Dr. Vishakha N. Desai (Chairperson), Mr. Anand G. Mahindra, Mr. R. K. Kulkarni, Dr. Pawan Goenka and Mr. Vikram Singh Mehta. The Committee, inter alia, reviews and monitors the CSR as well as Sustainability activities.

During the year under review, your Company spent Rs. 93.50 crores on CSR activities. The amount equal to 2% of the average net profit for the past three financial years required to be spent on CSR activities was Rs. 93.37 crores. The detailed Annual Report on the CSR activities undertaken by your Company in Financial Year 2019, is annexed herewith marked as Annexure VI.

Sustainability

During the year under review, the 11^th Sustainability Report for the year 2017-18 was released. The report was externally assured by DNV-GL and prepared in accordance with the GRI Standards-Core option.

Your Company continued the focus on the Environmental, Social and Governance (ESG) parameters, in the year under review by implementing Mahindra Sustainability Framework ensuring common language for sustainability across the Group. This framework defines sustainability as “Building enduring businesses by rejuvenating the environment and enabling stakeholders to rise”. Under the three pillars People, Planet and Profit of Sustainability Framework; various actions have been identified for implementation across the Group. Many of these actions are already underway as demonstrated by the Igatpuri Plant being certified as ‘Carbon Neutral’. Rudrapur, Nagpur and Jaipur are certified as ‘Zero Waste to Landfill’ plants.

Mr. Anand G. Mahindra, Executive Chairman of your Company is on the Governing Board of United Nations Global Compact. He was a co-chair at the Global Climate Action Summit held in September, 2018 in San Francisco, California.

Your Company has committed to adopt Science Based Target to restrict average global temperature rise to 2 degree Celsius in alignment of Paris Climate Change Agreement.

The Sustainability performance for your Company for the Financial Year 2018-19 will be elaborated in detail in the GRI Report which is under preparation and will be ready for release shortly.

Your Company was recognized for its leadership position on the ESG dimensions during the year under review, by way of:

- Winning Asia Sustainability Reporting Award 2018 -Best Supply Chain Reporting.

- Winning Asia Sustainability Reporting Award 2018 -Best Carbon Disclosure.

- Indian Chamber of Commerce “India Corporate Governance & Sustainability Vision” Awards.

- Retaining the status of getting listed on the Dow Jones Sustainability Index - 2018 under the ‘Emerging Market Index’ for fifth year with improvement in percentile scores.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure VII and forms part of this Report.

N. SECRETARIAL

Share Capital

The issued, subscribed and paid-up Share Capital of the Company stood at Rs. 621.60 crores as at 31^st March, 2019 comprising of 124,31,92,544 Ordinary (Equity) Shares of Rs. 5 each fully paid-up. There was no change in Share Capital during the year under review.

Compliance with the provisions of Secretarial Standard 1 and Secretarial Standard 2

The applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors’ and ‘General Meetings’, respectively, have been duly complied by your Company.

Annual Return

Pursuant to section 134(3)(a) and section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return as on 31^st March, 2019 in Form No. MGT-9 is attached as Annexure VIII and forms part of this Report.

The Annual Return of the Company has been placed on the website of the Company and can be accessed at http://www.mahindra.com/resources/FY19/ AnnualReport.zip

O. POLICIES

The details of the Key Policies adopted by the Company are mentioned at Annexure IX to the Board’s Report.

P. GENERAL

Neither the Executive Chairman nor the Managing Director of the Company received any remuneration or commission from any of the subsidiary of your Company.

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions/events on these items during the year under review except as stated hereunder:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of Shares (Including Sweat Equity Shares) to employees of the Company under any Scheme save and except ESOS referred to in this Report.

3. Significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and the Company’s operation in future.

4. Voting rights which are not directly exercised by the employees in respect of shares for the subscription/purchase of which loan was given by the Company (as there is no scheme pursuant to which such persons can beneficially hold shares as envisaged under section 67(3) (c) of the Companies Act, 2013).

For and on behalf of the Board

ANAND G. MAHINDRA

Executive Chairman

Mumbai, 29^th May, 2019

---

Mar 31, 2019

Board’s Report

To,

The Members of

Mahindna & Mahindra Financial Services Limited

Your Directors are pleased to present their Twenty-Ninth Report together with the audited financial statements of your Company for the Financial Year ended 31st March, 2019.

The performance highlights and summarized financial results of the Company are given below:

PERFORMANCE HIGHLIGHTS

- Consolidated income for the year increased by 32% to Rs. 10,430.9 Crores as compared to Rs. 7,912.2 Crores in 2017-18;

- Consolidated income from operations for the year was Rs. 10,371.7 Crores as compared to Rs. 7,883.9 Crores in 2017-18, a growth of 32%;

- Consolidated profit before tax for the year was Rs. 2,840.8 Crores as compared to Rs. 1,904.8 Crores in

2017-18;

- Consolidated profit after tax and non-controlling interest for the year was Rs. 1,827.3 Crores as compared to Rs.1,185.2 Crores in 2017-18.

FINANCIAL RESULTS

Rs. in Crores

	CONSOLIDATED		STANDALONE
	March 2019	March 2018	March 2019	March 2018
Total Income	10,430.9	7,912.2	8,809.8	6,685.2
Less : Finance Costs	4,432.3	3,436.2	3,944.6	3,081.6
Expenditure	3,129.3	2,546.7	2,422.6	1,957.5
Depreciation, Amortization and Impairment	75.5	55.2	60.2	44.2
Total Expenses	7,637.1	6,038.1	6,427.4	5,083.3
Profit Before Exceptional Items and Taxes	2,793.8	1,874.1	2,382.4	1,601.9
Share of profit of associate	47.0	30.7	-	-
Exceptional items	-	-	-	64.9
Profit Before Tax	2,840.8	1,904.8	2,382.4	1,666.8
Less : Provision For Tax
Current Tax	711.4	665.2	576.8	549.5
Deferred Tax	262.1	23.3	248.5	41.2
Profit After Tax for the Year	1,867.3	1,216.3	1,557.1	1,076.1
Less : Non-controlling interests	40.0	31.1	-	-
Profit for the Year attributable to Owners of the Company	1,827.3	1,185.2	1,557.1	1,076.1
Balance of profit for earlier years	3,282.5	2,909.0	3,193.2	2,608.4
Less : Transfer to Debenture Redemption Reserve	146.7	50.5	146.7	50.5
Profit available for Appropriation	4,963.1	4,043.7	4,603.6	3,634.0
Add : Other Comprehensive Income/(Loss)	(9.5)	(13.6)	(8.6)	(12.3)
Less : Dividend paid on Equity Shares	296.6	163.4	293.8	161.0
General Reserve	155.8	88.4	155.8	89.1
Statutory Reserve	385.2	224.3	311.4	178.4
Gross obligation at fair value to acquire non-controlling interest	158.6	316.8	-	-
Transaction with non-controlling interest	-	5.4	-	-
Securities Premium on fresh issue of equity share capital	0.1	-	-	-
Add : Profit on sale of Equity Shares of subsidiaries	-	50.7	-	-
Balance carried forward	3,957.3	3,282.5	3,834.0	3,193.2

IMPLEMENTATION OF INDIAN ACCOUNTING STANDARDS (“IND AS”)

Your Company has prepared the Financial Statements in accordance with Indian Accounting Standards ("IND AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standards) Rules, 2016. The Company has adopted IND AS from 1st April, 2018 with effective transition date of 1st April, 2017 and accordingly, these Financial Statements together with the Financial Statements for the comparative reporting period have been prepared with the recognition and measurement principles stated therein, prescribed under Section 133 of the Companies Act, 2013 ("the Act”) read with relevant Rules issued there under and the other accounting principles generally accepted in India.

This transition to IND AS has been carried out from the erstwhile Accounting Standards notified under the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended), guidelines issued by the Reserve Bank of India ("RBI”) and other generally accepted accounting principles in India (collectively referred to as ''''the previous GAAP”). Accordingly, the impact of transition has been recorded in the opening reserve as at 1st April, 2017 and the corresponding adjustments pertaining to comparative previous year as presented in these Financial Statements have been restated/reclassified in order to conform to current year presentation.

TRANSFER TO RESERVES

The Company proposes to transfer an amount of Rs. 155.8 Crores to the General Reserve, Rs. 311.4 Crores to the Statutory Reserve and Rs. 146.7 Crores to the Debenture Redemption Reserve. An amount of Rs. 3,834.0 Crores is proposed to be retained in the Statement of Profit and Loss.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 4.0 per Equity Share and also a Special Dividend of Rs. 2.5 per Equity Share aggregating Rs.6.5 per Equity Share of the face value of Rs. 2 each payable to those Members whose names appear in the Register of Members as on the Book Closure date. The Special Dividend is being recommended in the light of the very successful completion of twenty-five years of the business operations of the Company.

The dividend including dividend tax for the Financial Year 2018-19 will absorb a sum of Rs. 477.9 Crores [as against Rs. 293.8 Crores on account of dividend of Rs. 4.0 per Equity Share and tax thereon, paid for the previous year].

The dividend pay-out is in accordance with the Dividend Distribution Policy of the Company which has been approved by the Board of Directors.

DIVIDEND DISTRIBUTION POLICY

The Dividend Distribution Policy, containing the requirements prescribed in Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is appended as “Annexure I” and forms part of this Annual Report.

The Dividend Distribution Policy can also be accessed on the Company''s website at the web-link: https://www.mahindrafinance.com/policies.aspx.

During the year, an amount of Rs. 4,97,120 being the unclaimed/unpaid dividend of the Company for the Financial Year ended 31st March, 2011 was transferred in September, 2018 to the Investor Education and Protection Fund Authority.

OPERATIONS

During the year under review, your Company completed 25 glorious years of its business operations in rural and semi-urban markets. Rural sentiments continued to be positive for the Company from the start of the year till November 2018. During this period both farm and infra cash flows were good enabling higher collection efficiency on a consistent basis despite subdued automobile growth. Elections in few States in November

2018 and the impending Lok Sabha Elections slowed down growth in the last few months of the year. However, even during this slowdown, your Company could maintain the asset growth as well as collections, by continuously engaging with customers.

Your Company further strengthened its position as a significant financier in rural and semi-urban geographies by providing a wide range of products and services. Your Company has retained its leadership position in financing the Mahindra range of vehicles and tractors. Your Company not only retained the status of major financier for Maruti vehicles in semi-urban and rural India but also expanded its coverage to include several leading vehicle dealers. With the Company''s vast semi-urban and rural distribution network, it could attract many OEMs like Hyundai, Renault, Nissan for a tie-up. Your Company consolidated its position as a leading financier in all Aggregator (like Ola and Uber) and Selfdrive vehicles (like Zoom and Revv) segment. In this year, your Company also emerged as a significant player in financing of Heavy, Medium Commercial Vehicles and Construction Equipment for major OEMs. Your Company has also launched pilot projects to understand the upcoming opportunities in Leasing. Your Company maintains a leading presence in the growing market of financing of pre-owned vehicles such as Cars, Utility Vehicles and Tractors.

Network Expansion

Your Company strengthened its pan-India presence with a network of 1,321 offices, which is one of the largest amongst Non-Banking Financial Companies. Your Company further expanded its geographical presence by reaching out to untapped villages and increased its footprint by opening new branches and making it more accessible to its customers. Your Company''s nationwide network of branches and locally recruited employees have facilitated in catering to the diverse financial requirements of its customers by identifying and understanding the needs and aspirations of the people. With its strong presence covering even the most remote areas of the country, your Company is providing flexible financing opportunities to aspiring individuals to realize their dreams and helping them to ''RISE''. Your Company believes that incessantly serving its customers and channel partners and enhancing customer relationship is the starting point of a great successful journey.

Enhanced Product Offerings

Your Company has earned the trust and confidence of its customers with its consistent, transparent and reliable services and as a result, customer satisfaction across its network continues to remain high. Your Company has cumulatively financed the aspirations of over 6 million customers since its inception, most of whom had no prior credit history. Your Company''s philosophy of helping rural customers by providing tailor-made products and services at their doorstep has given a big boost in transforming rural lives. Your Company has also launched Suvidha Loans to meet specific needs of its existing customers through its numerous Branches.

During the year under review, your Company continued to expand its reach in the Micro Small and Medium Enterprises ("MSME”) segment. MSME Assets Under Management crossed more than Rs. 3,655.90 Crores during the period under review, covering 3,719 customers.

A reorganized collection structure has enabled your Company to take advantage of improved rural cash flows from better yields and Minimum Support Price which augmented its overall collections.

Digital

Your Company remains firmly focused on addressing the changing but unique needs of its rural and semi-urban customers. Your Company has successfully implemented low bandwidth end-to-end mobile sales application with real time integrations with government databases and credit bureaus to disburse loans to customers anytime, anywhere. Your Company has also launched multilingual mobile application for its customers to view their current loan details and make payments. It also helps in getting pre-approved Suvidha Loans. The digital strategy of your Company focuses on providing tailor-made solutions to meet its customers'' needs. Your Company and its subsidiaries have embraced digital in performing different activities like customers'' acquisition, selling of Fixed Deposits, Mutual Funds and Insurance products in partnership with Common Service Centers Scheme. Your Company will continue to further its digital presence by extending its coverage to more activities including improving employee efficiency.

Getting Future Ready

In order to provide superior experience to its customers, your Company has entered into a long term partnership with a leading technology service provider. With this state-of-the-art technology, your Company will be in a position to delight its customers.

Building Analytics Capability

Your Company has consistently serviced over 6 million semi-urban and rural customers across 3.6 lakh villages, for the past 25 years. In the process, the Company has acquired a very rich database of these millions of customers which could be productively mined for not only increasing repeat business but also to cross-sell many other financial and insurance products. Towards this purpose, the Company has set up a Data Analytics and Insight Department with experienced data science professionals.

The overall disbursement registered a growth of 22% at Rs. 46,210.3 Crores as compared to Rs. 37,772.9 Crores in the previous year. Total Income grew by 32% at Rs. 8,809.8 Crores for the year ended 31st March, 2019 as compared to Rs. 6,685.2 Crores for the previous year. Profit Before Tax (PBT) grew by 43% at Rs. 2,382.4 Crores as compared to Rs. 1,666.8 Crores for the previous year. Profit After Tax (PAT) increased by 45% at Rs. 1,557.10 Crores as compared to Rs. 1,076.10 Crores in the previous year.

During the year under review, the Assets Under Management stood at Rs. 67,078 Crores as at 31st March, 2019 as against Rs. 52,793 Crores as at 31st March, 2018, a growth of 27%.

There has been no change in the nature of business of the Company during the year under review.

DISTRIBUTION OF MUTUAL FUND PRODUCTS

During the year under review, the activity of distribution of Mutual Fund Products (MFP) was carried out across 160 branches covering 24 States.

As on 31st March, 2019, the amount of Assets Under Management outstanding through the Company''s Distribution Services on MFP, aggregate of institutional and retail segment, was Rs. 1,373.48 Crores and the number of clients stood at 57,389.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of the Company''s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

CORPORATE GOVERNANCE

Your Company practices a culture that is built on core values and ethical governance practices. Your Company is committed to transparency in all its dealings and places high emphasis on business ethics. A Report on Corporate Governance along with a Certificate from Messrs. KSR & Co., Company Secretaries LLP regarding compliance with the conditions of Corporate Governance as stipulated in Regulations 17 to 27, clauses (b) to (i) of sub-regulation (2) of Regulation 46 and paragraphs C, D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of the Annual Report.

SHARE CAPITAL

The issued, subscribed and paid-up Equity Share Capital as on 31st March, 2019 was Rs. 123.55 Crores, comprising of 61,77,64,960 Equity Shares of the face value of Rs. 2 each, fully paid-up.

There was no change in the Share Capital during the year under review.

The Company has neither issued shares with differential rights as to dividend, voting or otherwise, nor has issued sweat equity, other than Employee Stock Options under the Employees'' Stock Option Scheme referred to in this Report, during the year under review.

As on 31st March, 2019, none of the Directors of the Company holds instruments convertible into Equity Shares of the Company.

STOCK OPTIONS

During the year under review, on the recommendation of the Nomination and Remuneration Committee of your Company, the Trustees of the Mahindra & Mahindra Financial Services Limited Employees'' Stock Option Trust have granted 21,94,249 Stock Options to Eligible Employees under the Mahindra & Mahindra Financial Services Limited Employees'' Stock Option Scheme-2010 ("2010 Scheme”). No new Options were granted under the Mahindra & Mahindra Financial Services Limited Employees'' Stock Option Scheme-2005 ("2005 Scheme”). The Company does not have any scheme to fund its employees to purchase the shares of the Company. No employee has been issued stock options during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant.

During the year, the Nomination and Remuneration Committee has inter alia, approved the transfer of 7,85,275 Stock Options, being the balance number of Options available in the 2005 Scheme to the 2010 Scheme.

Pursuant to the aforesaid transfer of 7,85,275 Options to the 2010 Scheme on 14th March, 2019, the 2005 Scheme stands closed, effective from the date of the said transfer.

The 2010 Scheme of the Company is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("SBEB Regulations”) and there were no material changes made to the said Scheme. A Certificate from Messrs. B S R & Co. LLP, Chartered Accountants, Statutory Auditors of the Company, pursuant to Regulation 13 of the SBEB Regulations would be placed at the Annual General Meeting for inspection by Members.

Voting rights on the Shares issued to employees under the aforesaid Scheme are either exercised by them directly or through their appointed proxy.

The details of the Employees'' Stock Options and the Company''s Employees'' Stock Option Trust as required under the SBEB Regulations read with SEBI Circular CIR/CFD/ POLICY CELL/2/2015 dated 16th June, 2015 have been uploaded on the Company''s website and can be accessed at the web-link: https://www. mahindrafinance.com/annual-reports.aspx.

ECONOMY

Global

After strong growth in 2017 and early 2018, global economic activity slowed notably in the second half of last year, reflecting a confluence of factors affecting major economies. From an accelerating economic activity almost across the world with projected growth in 2019 being at 3.9 percent, a lot have changed in the last year. China''s growth declined following a combination of needed regulatory tightening to rein in shadow banking and an increase in trade tensions with the United States. The euro area economy lost more momentum than expected as consumer and business confidence weakened and car production in Germany was disrupted by the introduction of new emission standards; investment dropped in Italy as sovereign spreads widened; and external demand, especially from emerging Asia, softened. Elsewhere, natural disasters hurt activity in Japan.

Trade tensions increasingly took a toll on business confidence and, so, financial market sentiment worsened, with financial conditions tightening for vulnerable emerging markets and advanced economies, weighing on global demand. Conditions have eased in 2019 as the US Federal Reserve signaled a more accommodative monetary policy stance and markets became more optimistic about a US-China trade deal, but they remain slightly more restrictive than in the fall.

Outlook

As a result of these developments, global growth is now projected to slow from 3.6 percent in 2018 to 3.3 percent in 2019, before returning to 3.6 percent in 2020. The projected pickup in the second half of 2019 is predicated on an ongoing buildup of policy stimulus in China, recent improvements in global financial market sentiment, the waning of some temporary drags on growth in the euro area, and a gradual stabilization of conditions in stressed emerging market economies.

While global growth could surprise favorably if trade differences are resolved quickly so that business confidence rebounds and investor sentiment strengthens further, the balance of risks to the outlook remains on the downside. A further escalation of trade tensions and the associated increases in policy uncertainty could further weaken growth. Across all economies, the imperative is to take actions that boost potential output, improve inclusiveness, and strengthen resilience.

Domestic

After averaging close to 8 per cent through Q3:2017-18 to Q1:2018-19, domestic economic activity lost speed. Domestic economic activity lost pace in Q2 and Q3:FY2019, with coincident indicators suggesting a sharper deceleration in Q4. Aggregate demand weakened in Q2 by a large drag from net exports, which became entrenched in Q3 due to deceleration in public spending and private consumption.

Headline CPI inflation has declined sharply since mid- 2018, driven by the sustained fall in food inflation (even turning into deflation during October 2018-February 2019), the waning away of the direct impact of house rent allowances for central government employees, and more recently, by a sharp fall in fuel inflation.

During the end of second quarter, amid certain defaults in the NBFC sector, a credit freeze was witnessed in the bond market especially for NBFCs. The spread of 5-year AAA corporate bond yield over 5-year G-sec yield went up, further the spread for NBFCs/HFCs were even higher with availability of liquidity being limited. For NBFCs and HFCs combined, the share of participation in the issuance of Commercial Paper reduced from upwards of one-half to closer to one-third of the total issuances reflecting increased credit risk premia in the aftermath of the defaults.

Outlook

Looking ahead, favorable factors such as an increase in financial flows to the commercial sector, stabilization of crude oil and other commodity prices, consumption and investment enhancing proposals in the Union Budget 2019-20, and, the expectation of a normal monsoon are expected to boost economic activity. However, there could be headwinds from greater than expected moderation in global growth and global trade as well as unanticipated volatility in global financial markets.

GDP growth is projected to improve from 7.0 per cent in 2018-19 to 7.2 per cent in 2019-20. There are upside as well as downside risks to the baseline growth scenario. The boost to private investment activity from faster resolution of stressed assets and increased as well as more broad-based credit off take amidst rising capacity utilization can raise the baseline growth projection. Conversely, further escalation of trade tensions and protectionist trends, increased volatility in global financial conditions over the uncertainty of the stance of monetary policy in the US and other advanced economies, uncertainty surrounding Brexit, a sharper slowdown in the Chinese economy and deviations of the south-west monsoon from the baseline assumption of a normal monsoon may pose downside risks to the baseline growth path.

Source: International Monetary Fund (IMF), RBI Finance

The NBFC sector experienced liquidity problems in the second half of the financial year 2018-19. The funding squeeze has contributed to higher funding costs and a slowdown in loan growth for non-banking financial companies. Your Company continued to focus on managing cash efficiently and ensured that it had adequate liquidity and back-up lines of credit.

During the year under review, the Reserve Bank of India ("RBI”) held six Bi-monthly Monetary Policy Committee ("MPC”) meetings. The Policy Repo rates under the Liquidity Adjustment Facility ("LAF”) was at 6.00% at the beginning of the year. The MPC took the decision to increase the Policy Repo Rate under the LAF by 25 basis points each in the second and third meetings to 6.50% and maintained it at that level till the fifth meeting. Finally, in the sixth meeting, MPC took the decision to reduce the Policy Repo Rate under the LAF by 25 basis points from 6.50% to 6.25%. The MPC changed its stance from "neutral” to "calibrated tightening” in the fourth policy review and reverted back to "neutral” in the sixth policy review. The market continued to expect further reduction in the policy rate.

At the start of the fiscal year (April 2018), 10-year G-Sec benchmark yields (7.17% Gov Stock 2028), were trading at 7.40% levels which was at similar level by end of March 2019. However, in the wake of rising trade tensions, concerns about a "no deal” Brexit and signs of slowing down of the global economy, financial markets sentiments turned cautious and 10-year G-Sec yield touched a peak of 8.18% (around September 2018). The spread of 5-year AAA corporate bond yield over 5-year G-Sec yield moved up, reflecting increased credit risk premia in the aftermath of certain defaults in the NBFC sector. The defaults also led to a liquidity crisis for several non-banking financial companies. The spread declined consequent to the Reserve Bank''s announcement to inject rupee liquidity through long-term foreign exchange buy/sell swap auction. Divergent movements were observed in various segments of the domestic financial market as they reacted differently to the evolving global and local developments during second half of the Financial Year 2018-19. Lower inflation prints, continuing fall in crude oil prices and buoyed sentiments after the announcement of multiple open market purchases by the RBI, resulted in a decline in yields.

During the last quarter of the year under review, a new 10-year benchmark (7.26% GS 2029 - issued in January 2019) which closed the year at 7.35% was issued. During the year, the INR depreciated by 6.7% from INR 65 to INR 69 per USD with intermittent levels being at INR 74/USD around mid-October. The sudden sharp increase and heightened volatility in the currency resulted in inflows from international market being tightened, resulting in further pressure on the currency, which subsided with the global crude prices subsiding.

With a view to promoting and developing a liquid and dynamic corporate bond market, the Securities and Exchange Board of India ("SEBI”) vide its Circular No. SEBI/HO/DDHS/CIR/P/2018/144 dated 26th November, 2018 has provided a framework comprising detailed guidelines for raising of funds by issuance of debt securities and mandated all "large corporates” to raise at least 25 per cent of their incremental borrowings during a financial year by issuing debt securities from the financial year 201920 onwards.

Your Company has been identified as a "Large Corporate” as per the applicability criteria stipulated in the aforesaid SEBI Circular.

During the year under review, your Company continued with its diverse methods of sourcing funds in addition to regular borrowings like Secured and Unsecured Debentures, Term Loans, Fixed Deposits, Commercial Papers, etc., and maintained prudential Asset/ Liability match throughout the year. Your Company sourced long-term debentures and loans from banks and other institutions at attractive rates. Your Company, for the first time has raised funds through issuance of Market Linked Debentures, External Commercial Borrowings ("ECB”) and internationally rated securitisation transactions.

During the year, your Company has successfully completed 7 (seven) securitisation transactions aggregating to Rs. 4,389.20 crores and raised around US- 200 million through ECB.

- Private Placement Issues of Non-Convertible Debentures

During the year under review, your Company issued Secured/Unsecured Redeemable NonConvertible Debentures including Secured Redeemable Principal Protected Non-Convertible Market Linked Debentures ("NCDs”) aggregating to Rs. 6,800.90 Crores on a private placement basis, in various tranches.

As specified in the respective offer documents, the funds raised from NCDs were utilised for the purpose of financing, repayment of dues of other financial institutions/Banks or for longterm working capital.

- Public Issuance of Non-Convertible Debentures

Your Company continues to broaden the liability mix by bringing in new instruments as well as diversifying the investor base and profile. During the year under review, your Company successfully raised Rs. 2,146.99 Crores through its third public issue of 2,14,69,947 Secured Redeemable Non-Convertible Debentures and Unsecured Subordinated Redeemable Non-Convertible Debentures of face value of Rs. 1,000 each, consisting of 1,81,01,224 Secured Redeemable NonConvertible Debentures and 33,68,723 Unsecured Subordinated Redeemable NonConvertible Debentures ("NCDs”). With this issuance, approximately 8% of your Company''s borrowing is funded through this instrument. The NCDs were allotted on 18th January, 2019 and listed on BSE Limited on 21st January, 2019.

The net proceeds received from the Public Issue were used for the purpose of onward lending, financing, refinancing the existing indebtedness of the Company, long-term working capital requirements, Issue expenses and for general corporate purposes. Details of the Issue and the end use were furnished to the Audit Committee.

The Company has been regular in making payments of principal and interest on the NCDs. There are no NCDs which have not been claimed by investors or not paid by the Company after the date on which the NCDs became due for redemption.

- Rupee Denominated Medium Term Note (MTN)

The Rupee Denominated Medium Term Note (MTN) programme of your Company, is listed on the Singapore Exchange Securities Trading Limited. During the year under review, no securities have been issued by your Company under the programme.

INVESTOR RELATIONS

Your Company has been continuously interacting and endeavours to further improve its engagement with Domestic and International investors/analysts by participating either in-person meetings or through use of technology i.e. conference calls, video-conferencing, Tele-presence meetings. Your Company attended multiple investor meets organised by reputed Global and Domestic Broking Houses during the year, both in India and abroad, to communicate details of its performance, important regulatory and market developments and exchange of information. Quarterly and annual earnings calls are scheduled through structured conference calls to keep various stakeholders informed about the past performance and future outlook of the industry, especially those having a bearing on the Company. These interactions with institutional shareholders, fund managers and analysts are based on generally available information that is accessible to the public on a non-discriminatory basis. Your Company uploads the transcript of the quarterly earnings calls on its website which can be accessed by existing and potential investors and lenders.

Your Company believes in transparent communication and building a relationship of mutual understanding and trust. Your Company further ensures that critical information about the Company is available to all the investors by hosting such information on the Company''s website.

CAPITAL ADEQUACY

As on 31st March, 2019, the Capital to Risk Assets Ratio (CRAR) of your Company was 20.3% which is well above the minimum requirement of 15% CRAR prescribed by the Reserve Bank of India.

CREDIT RATING

The credit rating details of the Company as on 31st March, 2019 were as follows:

Rating Agency	Type of Instrument	Rating*	Remarks
India Ratings & Research Private Limited	Commercial Paper Programme and Bank Facilities (Fund/NonFund Based Working Capital Limit)	''IND A1 ''	The ''A1'' rating indicates the Highest Level of Rating. Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
	Long-term Debt instruments, Subordinated Debt Programme and Bank Facilities (Fund/NonFund Based Working Capital Limit)	''IND AAA/Stable'' ''IND PP-MLD AAA emr/Stable''	The ''AAA'' ratings denote the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. ''PP-MLD'' indicates the full principal protection in the equity-linked notes wherein the issuer is obligated to pay the full principal upon maturity. Suffix “eirr” denotes the exclusion of the embedded market risk from the rating.
CARE Ratings Limited (Formerly known as Credit Analysis & Research Limited)	Long-term Debt instruments and Subordinated Debt Programme	''CARE AAA/Stable''
Brickwork Ratings India Private Limited	Long-term Subordinated Debt Programme	''BWR AAA/Stable''
CRISIL Limited	Fixed Deposit Programme	''CRISIL FAAA/Stable''
	Long-term Debt Instruments, Subordinated Debt Programme and Bank Loan Facilities	''CRISIL AA /Stable''	The ''AA '' rating indicates a high degree of safety with regard to timely payment of financial obligations. Such instruments carry very low credit risk.
	Commercial Paper Programme and Bank Loan Facilities	''CRISIL A1 ''	The ''A1'' rating indicates the Highest Level of Rating. Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.

* The ratings mentioned above were reaffirmed by the Rating Agencies during the Financial Year 2018-19. With the above rating affirmations, your Company continues to enjoy the highest level of rating from all major rating agencies at the same time.

Out of the above, Tier I capital adequacy ratio stood at 15.5% and Tier II capital adequacy ratio stood at 4.8%, respectively.

RBI GUIDELINES

The Company continues to comply with all the applicable regulations prescribed by the Reserve Bank of India ("RBI”), from time to time.

ACHIEVEMENTS

Your Company won several awards and accolades during the year under review. Select few awards/ recognition are enumerated hereunder:

Corporate Governance

- Listed amongst the Top 10 Companies of the ''S&P BSE 100 Companies'' with a ''High Corporate Governance Score'' for the second time in a row, in a study jointly conducted by International Finance Corporation (IFC), a member of the World Bank Group, BSE Limited (BSE) and Institutional Investor Advisory Services (IiAS), based on G20/OECD Principles of Corporate Governance.

Business & Marketing:

- Adjudged the Gold Award Winner as the "Retail NBFC of the Year 2018” by Outlook Money Awards 2018.

- Won two prestigious Awards at the "Rural Marketing Forum and Awards 2019” in the following categories:

a. Most Effective use of Direct Marketing to Rural Consumers for "2 Wheeler to 20 Wheeler Maha Loan Mela”.

b. Best Integrated Rural Marketing Campaign for "Vehicle Loan Festival”.

- Won the Silver Award for MF SUTRADHAAR program and Bronze Award for Suvidha Loans at Flame Awards Asia 2018.

- Won the PRCI (Public Relations Council of India) Collateral Awards 2019 in the following categories:

i) Crystal Award for Table Calendar-2019

ii) Gold Award for Annual Report design

iii) Advertisement Campaign on Vehicle Loan Festival

CSR & Sustainability

- Conferred with the coveted Golden Peacock Award for Corporate Social Responsibility-2018 by the Institute of Directors.

- Listed in Dow Jones Sustainability Index (DJSI) Emerging Markets category for the 6th consecutive year.

- Honoured with ET NOW CSR Leadership Award 2018 for Best CSR Practices and Skill development.

- Included in the "Sustainability Yearbook 2019” released by RobecoSAM.

- Won the Gold Award for Women and Child Health initiative at the CSR Health Impact Awards 2018.

Human Resources

- Listed by Great Place to Work® Institute India in the Top 100 list of Great Places to work in India for 3 years in a row.

- Ranked 11th amongst "25 Best Large Workplaces in Asia 2019”, by Great Place to Work® Institute.

- Won three awards from Great Place to Work® Institute India:

a. Ranked 14th in India''s Best Companies to Work for 2018.

b. Special Category Award in Career Management.

c. Ranked among India''s 15 Best Workplaces in BFSI-2018.

- Listed in Top 100 Best Companies for Women - 2018 by Working Mother and Avtar.

- Won two awards at the TISS Leapvault CLO Summit 2018 in the following categories:

a. Gold Award for the Best Coaching/ Mentoring intervention for "GURU-Mentoring Program”.

b. Silver Award for Best Mobile Learning Intervention for "Manthan - Training Module”.

- Bagged four awards at the Mega Corporate Film Festival Seminar & Awards 2018 in the following categories:

a. First Prize in the Best Corporate Film - "Communicating Employee Engagement-2018”.

b. Second Runners-up in the Best Corporate Film "Communicating Vision, Values, Mission, Purpose - 2018”.

c. Second Runners-up in the Best Corporate Film for "Communicating Organizational Culture - 2018”.

d. Third Runners-up in "Communicating Commitment to Woman Empowerment -2018”.

Information & Technology

- The Project, Voice Induced Business Enablement has won the "Flame Awards - Asia” (Gold category) for the Best Small Budget Campaign of the Year.

FIXED DEPOSITS AND LOANS/ADVANCES

Your Company provides a wide range of Fixed Deposit schemes that cater to the investment needs of various classes of investors. These Deposits carry attractive interest rates with superior service enabled by robust processes and technology. In order to tap rural and semi-urban savings and reach out to the farthest customers, your Company continues to expand its network and make its presence felt in the most remote regions of the country.

During the year, CRISIL has reaffirmed a rating of ''CRISIL FAAA/Stable'' for your Company''s Fixed Deposits. This rating represents the highest degree of safety regarding timely servicing of financial obligations and carries the lowest credit risk. Your Company''s Deposits continue to be a preferred investment amongst the investors.

As on 31st March, 2019, your Company has mobilized funds from Fixed Deposits to the tune of Rs. 5,698.88 Crores, with an investor base of over 1,86,359 investors.

Your Company continues to serve the investors by introducing several customer centric measures on an ongoing basis to further strengthen its processes in sync with the requirements of the Fixed Deposit holders. The Company communicates various intimations via SMS, e-mails, post, etc., to its investors as well as sends reminder emails to clients whose TDS is likely to be deducted before any payout/ accrual. Your Company also provides online renewal facility, online generation of TDS certificates from customer/broker portal and Seamless Investment process for employees.

During the year under review, your Company has rolled out several initiatives aimed at offering a superior customer experience. Some key ones are:

- Initiation of online acceptance of Deposits through the Company''s website;

- Introduction of Dhan Samruddhi Deposits which are available through Digital Channel Partners;

- Introduction of Bulk Deposits above Rs. 5 Crores.

As at 31st March, 2019, 6,152 Deposits amounting to Rs.7.22 Crores had matured for payment and remained unclaimed. The unclaimed Deposits have since reduced to 5,421 Deposits amounting to Rs.

6.02 Crores. There has been no default in repayment of Deposits or payment of interest during the year.

Your Company being a Non-Banking Financial Company, the disclosures required as per Rule 8 (5) (v) and (vi) of the Companies (Accounts) Rules, 2014 read with Sections 73 and 74 of the Companies Act, 2013, are not applicable to it.

The information pursuant to Clause 35(1) of Master Direction DNBR.PD.002/03.10.119/2016-17 dated 25th August, 2016 issued by the Reserve Bank of India on Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016, regarding unpaid/unclaimed public deposits as on 31st March, 2019, is furnished below:

i. total number of accounts of Public Deposits of the Company which have not been claimed by the depositors or not paid by the Company after the date on which the deposit became due for repayment: 6,152.

ii. the total amounts due under such accounts remaining unclaimed or unpaid beyond the dates referred to in clause (i) as aforesaid: Rs. 7,22,20,437.

Depositors were intimated regarding the maturity of deposits with a request to either renew or claim their Deposits. Your Company continues to send intimation letters via registered post every 3 months to all those Fixed Deposit holders whose Deposits have matured as well as to those whose Deposits remain unclaimed. Where the Deposit remains unclaimed, follow-up action is also initiated through the concerned agent or branch.

Pursuant to Section 125(2) (i) of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules”) as amended from time to time, matured Deposits remaining unclaimed for a period of seven years from the date they became due for payment are required to be transferred to the Investor Education and Protection Fund (IEPF) Authority established by the Central Government. Further, interest accrued on the matured deposits which remain unclaimed for a period of seven years from the date of payment will also be transferred to the IEPF under Section 125(2] (k). The concerned depositor can claim the Deposit and/or interest from the IEPF Authority by following the procedure laid down in the IEPF Rules.

During the year under review, an amount of Rs. 0.09 Crores has been transferred to the IEPF Authority.

During the year under review, the Company has not given any loans and advances in the nature of loans to its subsidiaries or associate or loans and advances in the nature of loans to firms/companies in which Directors are interested.

Accordingly, the disclosure of particulars of loans/ advances, etc., as required to be furnished in the Annual Accounts of the Company pursuant to Regulations 34(3) and 53(f) read with paragraph A of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable to the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS IN SECURITIES

Pursuant to Section 186(11) of the Companies Act, 2013 ("the Act”), the provisions of Section 186(4) of the Act requiring disclosure in the Financial Statements of the full particulars of the loans made and guarantees given or securities provided by a Non Banking Financial Company in the ordinary course of its business and the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient of the loan or guarantee or security are exempted from disclosure in the Annual Report.

Further, pursuant to the provisions of Section 186 (4) of the Act, the details of investments made by the Company are given in the Notes to the Financial Statements.

SUSTAINABILITY INITIATIVES

Sustainability has invariably been a core to the purpose of Mahindra Finance. At the heart of our organizational strategy is an inclusive business model that enables the residents of semi-urban and rural India to access formal channels of credit/finance which helps them in creating long-term value. In our journey spanning more than two decades, we have empowered the lives of millions of Indians by providing access to myriad financial services and products, which have helped them to "Rise for Good”. Your Company has been enabling them to meet their aspirations through financial product offerings. Your Company helps the people build their homes through affordable home loan services provided by Mahindra Rural Housing Finance Limited, secure their life and assets by insurance solutions of Mahindra Insurance Brokers Limited and offers investment options by Mahindra Asset Management Company Private Limited. By providing the right set of opportunities in the remote areas and enabling our customers to advance in their lives, we are making positive contribution to multiple stakeholders. Your Company lays strong emphasis on customer centricity with its customer base spread across more than 3.5 lakh villages in India with majority of them belonging to the ''Earn and Pay'' segment.

Your Company commenced its journey towards reporting sustainability performance in 2008-09 through Mahindra Group''s Sustainability Report and in the year 2012-13 your Company released its first standalone Sustainability Report. In the reporting year, the Company released its Sixth Sustainability Report for the Financial Year 2017-18 with the theme "I Am Responsible” based on Integrated Reporting framework and adhering to the Global Reporting Initiative''s (GRI Standards). The Report embodies a motto that each individual of the organization firmly believes in ''Making Sustainability Personal'' under the theme "I Am Responsible”. It also showcases how your Company responsibly creates value for all its stakeholders.

This Report is hosted on your Company''s website at the web-link: https://www.mahindrafinance.com/ sustainability.aspx.

Your Company continued to focus on sustainability awareness for different stakeholders and took various initiatives to engage them on these fronts. In 2018, your Company became the 1st Financial Company in India to be committed towards call to action for Science Based Targets. The Science Based Targets initiative (SBTi) requires companies to publicly commit to setting carbon emission reduction targets that are in line with climate science.

Your Company has been listed on the Dow Jones Sustainability Index (DJSI) Emerging Market Trends for the sixth consecutive year. Your Company is the only Company from amongst the Diversified Financial Services Companies in India to have made it to this list. To be included in the DJSI, companies are assessed and selected based on their long term Environmental, Social and Governance (ESG) management plans and actions. Your Company got selected in "The Sustainability Yearbook 2019” being the only Financial Services Sector Company to qualify amongst 9 companies from India. This signifies your Company being amongst top Sustainability performers in Diversified Financial Services Sector across the World based on Corporate Sustainability Assessment done by Robeco SAM.

Your Company''s approach has been to make its environmental disclosure transparent, and accordingly, it has been reporting disclosures and reports on its performance through the Carbon Disclosure Project (CDP) India since Financial Year 2011-12. During the reporting year, your Company attained CDP Performance Band - C meaning that your Company is at "Awareness” band.

During the year, your Company made proactive efforts to reduce CO2 emissions (carbon footprint) through Project "Mahindra Hariyali”, by planting more than 71,000 saplings throughout the country. The Company''s Annual Family Fun Day "Vrindavan” attained Yale''s Gold Level Green Event Certification as 87% waste generated at Vrindavan was recycled, composted and sent to biogas plants.

Your Company is gearing up to be future ready by making sustainability and climate change an integral part of its risk framework and taking measures to mitigate and manage them. Weather reports are assessed on a regular basis and aligned with business operations to protect the customers and minimize the risk impact. The outlook for the future has been positive and your Company is well equipped to enable its customers and communities to progress through its inclusive and sustainable business model.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report ("BRR”) of your Company for the year 2018-19 forms part of this Annual Report as required under Regulation 34(2) (f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is appended as “Annexure II”.

Your Company is building an inclusive organization by empowering all the stakeholders and facilitating their contribution towards growth that is both holistic and long term. Through the inclusive business model, your Company is endeavoring to cater to the bottom of the pyramid in the rural and semi-urban areas, enabling them to earn their livelihood through varied financial products and services. Your Company has always been conscious of its role as a responsible corporate citizen. Through its wide network of branches with locally-recruited employees, strong and lasting relationships with its stakeholders, large customer base, vast experience and market knowledge, your Company is providing financial resources to underserviced regions of the country.

The BRR can also be accessed on the Company''s website at the web-link: https://www.mahindrafinance.com/ sustainability.aspx.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Transforming lives of the rural population has been the primary focus of all CSR initiatives undertaken by your Company. The endeavour is to empower the rural communities and help them unleash their potential. Your Company has identified Healthcare, Education (including Livelihood) and Environment as key CSR thrust areas for the welfare of one of the major stakeholders - rural communities in India.

Building on the momentum created last year through several education and livelihood projects, your Company continued to provide scholarships to 2,500 undergraduate and 500 graduate students, organised visits to municipal schools and financial support to run a vocational skill building center catering to 500 People with Disability. In an effort to encourage more women to take up livelihood opportunities, your Company also implemented Drivers Training Program for 375 women and an Auto-mechanic Training Program for 180 women. Further, your Company is empowering youth, women and working population with the knowledge of sound financial practices to enable them in managing their money better by conducting a Financial Literacy workshop. Reaffirming its commitment to the cause of education, your Company continued its support to over 10,450 underprivileged girl children from socially and economically marginalised families living in urban, rural and tribal areas of India. To promote inclusive growth of socially and economically disadvantaged youth, your Company continued its support to Mahindra Pride School which skilled 3,453 youth and all of them have been absorbed in various organisations. Further, an additional 39,783 students were trained through 866 batches of Mahindra Pride Classrooms conducted through Polytechnics and Arts & Science Colleges in 14 States.

In the area of healthcare, your Company organized nationwide blood donation drives, health checkup camps, Swachh Bharat activities, donated 14 ambulances that have made access to primary healthcare centers easy, for several tribal and rural patients across the nation. Your Company has revamped the Medical Equipment Donation project to provide financial support for procuring crucial equipment used in liver transplants and dialysis for kidney patients. Additionally, your Company continued its support for Maternal & Child Health Care project which provides nutritional supplementation to anemic pregnant and lactating women, adolescents and malnourished children in rural areas.

For increasing focus on better environment, your Company helped build a greener tomorrow by planting over 72,500 trees with a higher survival rate.

Apart from the key thrust areas, your Company contributed funds for other causes such as preservation and promotion of the fine arts & culture and conducted visits to orphanage homes, differently abled homes, homes for the elderly, etc., to re-affirm its pledge to the society.

During the year under review, your Company has spent Rs. 26.87 Crores on CSR projects/programs. The amount equal to 2% of the average net profit for the past three financial years required to be spent on CSR activities was Rs. 26.81 Crores. Your Company is in compliance with the statutory requirements in this regard.

CSR COMMITTEE

During the year under review, the CSR Committee comprised of Mr. Piyush Mankad (Chairman), Mr. Ramesh Iyer, Mr. V. Ravi and Dr. Anish Shah. The Committee, inter alia, reviews and monitors the CSR activities.

Consequent upon the resignation of Mr. Piyush Mankad, as an Independent Director with effect from the close of business hours on 31st March, 2019, the Committee was reconstituted effective from 9th April, 2019 as follows:

Name	Category
Mr. Dhananjay Mungale	- Chairman of the Committee (Independent Director)
Ms. Rama Bijapurkar	- Independent Director
Mr. Ramesh Iyer	- Vice-Chairman & Managing Director
Mr. V. Ravi	- Executive Director & Chief Financial Officer
Dr. Anish Shah	- Non-Executive Non Independent Director

CSR POLICY

The CSR Policy of the Company duly amended, is hosted on the Company''s website at the web-link: https://www.mahindrafinance.com/csr.aspx and a

brief outline of the CSR Policy and the CSR initiatives undertaken by the Company during the year as per Annexure prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been appended as “Annexure III” to this Report.

EXTRACT OF ANNUAL RETURN

Pursuant to sub-section 3(a) of Section 134 and subsection (3) of Section 92 of the Companies Act, 2013, read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return as at 31st March, 2019 in Form No. MGT-9, is appended as “Annexure IV” and forms part of this Report.

The Annual Return of the Company as at 31st March, 2019 has been placed on the website of the Company and can be accessed at https://www. mahindrafinance.com/annual-reports.aspx.

BOARD MEETINGS AND ANNUAL GENERAL MEETING

The calendar of the Board/Committee Meetings and the Annual General Meeting is circulated to the Directors in advance to enable them to plan their schedule for effective participation at the respective meetings. Additional Board Meetings are convened by giving appropriate notice to address business exigencies. At times certain decisions are taken by the Board/Committee through circular resolutions.

All the decisions and urgent matters approved by way of circular resolutions are placed and noted at the subsequent Board/Committee Meeting.

The Board of Directors met six times during the year under review, on 25th April, 2018, 27th July, 2018, 24th October. 2018, 25th January. 2019, 7th March, 2019 and 27th March, 2019. The requisite quorum was present for all the Meetings. The maximum time gap between any two Meetings was not more than one hundred and twenty days. These Meetings were well attended. The 28th Annual General Meeting (AGM) of the Company was held on 27th July, 2018.

Detailed information on the Meetings of the Board, its Committees and the AGM is included in the Report on Corporate Governance, which forms part of this Annual Report.

MEETINGS OF INDEPENDENT DIRECTORS

The Independent Directors met twice during the year under review, on 24th October, 2018 and 6th March, 2019. The Meetings were conducted in an informal manner without the presence of the Wholetime Directors, the Non-Executive Non-Independent Directors, or any other Management Personnel.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company has various Committees which have been constituted as a part of good corporate governance practices and the same are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

During the year under review, the Audit Committee comprised of Mr. C. B. Bhave as the Chairman and Mr. Dhananjay Mungale, Mr. M. G. Bhide, Ms. Rama Bijapurkar, Mr. Piyush Mankad, Mr. V. S. Parthasarathy and Dr. Anish Shah as Members.

Consequent upon the resignation of Mr. M. G. Bhide and Mr. Piyush Mankad, Independent Directors from the Board of Directors with effect from the close of business hours on 31st March, 2019, and the appointment of Mr. Milind Sarwate as an Independent Director of the Company with effect from 1st April, 2019, the Committee stands reconstituted effective from 9th April, 2019 as follows:

Name	Category
Mr. C. B. Bhave	- Chairman of the Committee (Independent Director)
Mr. Dhananjay Mungale	- Independent Director
Ms. Rama Bijapurkar	- Independent Director
Mr. V. S. Parthasarathy	- Non-Executive Non Independent Director
Dr. Anish Shah	- Non-Executive Non Independent Director
Mr. Milind Sarwate	- Independent Director

The recommendations of the Audit Committee were duly approved and accepted by the Board during the year under review.

The other Committees of the Board are:

i) Nomination and Remuneration Committee

ii) Stakeholders Relationship Committee

iii) Corporate Social Responsibility Committee

iv) Risk Management Committee

v) Asset Liability Committee

vi) Committee for Strategic Investments

vii) IT Strategy Committee

The details with respect to the composition, powers, roles, terms of reference, Meetings held and attendance of the Directors at such Meetings of the relevant Committees are given in detail in the Report on Corporate Governance of the Company which forms part of this Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Directors

Mr. M. G. Bhide and Mr. Piyush Mankad were appointed as Independent Directors by the Members at the 24th Annual General Meeting held on 24th July, 2014 for a term of 5 (five) consecutive years commencing from 24th July, 2014 to 23rd July, 2019, not liable to retire by rotation.

Pursuant to the applicability of Regulation 17(1A) of the Listing Regulations, as amended by the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, mandating approval of Members by a special resolution for the appointment/continuance of Non-Executive Director(s) above the age of 75 years, effective from 1st April, 2019, Mr. M. G. Bhide and Mr. Piyush Mankad, who have attained the age of 75 years, tendered their resignation as Independent Directors from the Board of Directors of the Company with effect from the close of business hours on 31st March, 2019.

The Board places on record its sincere appreciation for the invaluable contribution and guidance provided by Mr. M. G. Bhide and Mr. Piyush Mankad during their tenure as Independent Directors of the Company.

The Board of Directors, based on the recommendation of the Nomination and Remuneration Committee, vide its Circular Resolution dated 25th February, 2019 proposed the appointment of Mr. Milind Sarwate as an Independent Director of the Company to hold office for a term of 5 (five) consecutive years commencing from 1st April, 2019 to 31st March, 2024, not liable to retire by rotation, subject to the approval of the Shareholders.

Subsequent to the above, the Shareholders of the Company have pursuant to the provisions of Sections 149, 150, 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014, approved the appointment of Mr. Milind Sarwate as an Independent Director of the Company with effect from 1st April, 2019 for a term of 5 (five) consecutive years, vide an Ordinary Resolution passed by means of a Postal Ballot on 31st March, 2019.

Mr. V. Ravi, Executive Director & Chief Financial Officer, retires by rotation at the forthcoming Annual General Meeting and, being eligible, offers himself for reappointment.

The Nomination and Remuneration Committee, on the basis of performance evaluation of Independent Directors and taking into account the business knowledge, experience and the substantial contribution made by Mr. Dhananjay Mungale and Ms. Rama Bijapurkar during their tenure, has recommended to the Board that the continued association of Mr. Dhananjay Mungale and Ms. Rama Bijapurkar as Independent Directors of the Company would be beneficial to the Company. Based on the above and the performance evaluation of Independent Directors, the Board recommends the re-appointment of Mr. Dhananjay Mungale and Ms. Rama Bijapurkar, as Independent Directors of the Company, not liable to retire by rotation, to hold office for a second term of 5 (five) consecutive years on the Board of the Company, commencing from 24th July, 2019 to 23rd July, 2024 The Company has received the requisite Notices from Members in writing proposing their appointment as Independent Directors.

Mr. Dhananjay Mungale and Ms. Rama Bijapurkar have given their consent for re-appointment and have confirmed that they continue to retain their status as Independent Directors and that they do not suffer from any disqualifications for appointment.

Mr. Dhananjay Mungale, Ms. Rama Bijapurkar and Mr. V. Ravi are not debarred or disqualified from holding the office of Director by virtue of any SEBI Order or any other such authority, pursuant to circulars dated 20th June, 2018 issued by BSE Limited and the National Stock Exchange of India Limited pertaining to enforcement of SEBI Orders regarding appointment of Directors by the listed companies.

All the Directors of the Company have confirmed that they satisfy the "fit and proper” criteria as prescribed in Chapter XI of RBI Master Direction No. DNBR. PD. 008/ 03.10.119/2016-17 dated 1st September, 201 6 and that they are not disqualified from being appointed/continuing as Directors in terms of Section 164(2) of the Companies Act, 2013.

The details of the Directors being re-appointed are set out in the Notice convening the ensuing AGM.

Key Managerial Personnel

Mr. Ramesh Iyer, Vice-Chairman & Managing Director, Mr. V. Ravi, Executive Director & Chief Financial Officer and Ms. Arnavaz M. Pardiwalla, Company Secretary of the Company have been designated as the Key Managerial Personnel of the Company (KMP) pursuant to the provisions of Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

There has been no change in the KMP during the year under review.

Declaration by Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they fulfill the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and Regulation 16(1)(b) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Directors'' Responsibility Statement

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, ("the Act”) your Directors, based on the representations received from the Operating Management and after due enquiry, confirm that:

i. in the preparation of the annual accounts for financial year ended 31st March, 2019, the applicable accounting standards have been followed and there are no material departures in adoption of these standards.

ii. they have in consultation with the Statutory Auditors selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2019 and of the profit of the Company for the year ended on that date.

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. they have prepared the annual accounts for financial year ended 31st March, 2019 on a going concern basis.

v. they have laid down adequate internal financial controls to be followed by the Company and that such internal financial controls were operating effectively during the financial year ended 31st March, 2019.

vi. they have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively during the financial year ended 31st March, 2019.

Performance Evaluation of the Board

The Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations”) stipulate the evaluation of the performance of the Board, its Committees, Individual Directors and the Chairperson.

The Company has formulated a Policy for performance evaluation of the Independent Directors, the Board, its Committees and other individual Directors which includes criteria for performance evaluation of the Non-Executive Directors and Executive Directors.

The evaluation framework for assessing the performance of Directors comprises of various key areas such as attendance at Board and Committee Meetings, quality of contribution to Board discussions and decisions, strategic insights or inputs regarding future growth of the Company and its performance, ability to challenge views in a constructive manner, knowledge acquired with regard to the Company''s business/ activities, understanding of industry and global trends, etc.

The evaluation involves self-evaluation by the Board Member and subsequent assessment by the Board of Directors. A member of the Board will not participate in the discussion of his/her evaluation.

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of 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 the Directors individually (including Independent Directors).

Feedback was sought by way of well-defined and structured questionnaires covering various aspects of the Board''s functioning such as adequacy of the composition of the Board and its Committees, Board culture, areas of responsibility, execution and performance of specific duties, obligations and governance, compliance, oversight of Company''s subsidiaries, etc., and the evaluation was carried out based on responses received from the Directors.

A separate exercise was carried out by the Nomination and Remuneration Committee of the Board to evaluate the performance of individual Directors who were evaluated on several parameters such as level of engagement and contribution, independence of judgment safeguarding the interest of the Company and its minority shareholders and knowledge acquired with regard to the Company''s business/activities.

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 Directors and NonExecutive Directors.

The performance evaluation of the Independent Directors was carried out by the entire Board excluding the Director being evaluated. Qualitative comments and suggestions of Directors were taken into consideration by the Chairman of the Board and the Chairman of the Nomination and Remuneration Committee. The Directors have expressed their satisfaction with the evaluation process.

Familiarisation Programme for Independent Directors

The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters along with details of number of programmes and number of hours spent by each of the Independent Directors during the Financial Year 2018-19, in terms of the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are available on the website of the Company and can be accessed at the web-link: https:// www.mahindrafinance.com/pdf/Familiarisation Programme for the FY 2018 19.pdf.

Policies on Appointment of Directors and Senior Management and Remuneration of Directors,

Key Managerial Personnel and Employees

i) Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management

In accordance with the provisions of Section 134(3)(e) of the Companies Act, 2013 ("the Act”) read with Section 178(2) of the Act and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has adopted a Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management, which inter alia, includes the criteria for determining qualifications, positive attributes and independence of Directors, identification of persons who are qualified to become Directors and who may be appointed in the Senior Management team, succession planning for Directors and Senior Management, and the Talent Management framework of the Company.

During the year under review, the Board based on the recommendations of the Nomination and Remuneration Committee amended the aforesaid Policy to align it in accordance with the provisions of SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018.

ii) Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel and Employees of the Company

Your Company has also adopted the Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel and Employees of the Company in accordance with the provisions of sub-section (4) of Section 178 of the Act.

During the year under review, your Company made changes in these Policies to align them with the amendments made pursuant to the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, respectively.

The Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel and Employees of the Company, as amended, are appended as “Annexure V-A” and “Annexure V-B”, respectively, and form part of this Report.

The criteria for determining qualifications, positive attributes and independence of a Director and the Remuneration Policies for Directors, Key Managerial Personnel and other employees have been discussed in detail in the Report on Corporate Governance.

AUDITORS

Statutory Auditors

Messrs. B S R & Co. LLP, Chartered Accountants, (ICAI Firm Registration No. 101 248W/W-100022), were appointed as Statutory Auditors of the Company at the Twenty-seventh Annual General Meeting ("AGM”) to hold office for a period of five years, commencing from the conclusion of the 27th AGM held on 24th July, 2017 till the conclusion of the 32nd AGM of the Company to be held in the year 2022, subject to ratification of their appointment by the Members at the AGM, as may be applicable.

Pursuant to the Notification issued by the Ministry of Corporate Affairs on 7th May, 2018 amending Section 139 of the Companies Act, 2013 and the applicable Rules, the mandatory requirement for ratification of appointment of Auditors by the Members at every AGM has been omitted and hence the Company has not proposed ratification of appointment of Messrs. B S R & Co. LLP, Chartered Accountants, at the ensuing AGM.

The Statutory Auditors have given a confirmation to the effect that they are eligible to continue with their appointment and that they have not been disqualified in any manner from continuing as Statutory Auditors. The remuneration payable to the Statutory Auditors shall be determined by the Board of Directors based on the recommendation of the Audit Committee.

The Report given by the Auditors on the Financial Statements of the Company for the Financial Year 2018-19 is a part of the Annual Report. The Report is unmodified and does not contain any qualification, reservation, adverse remark or disclaimer.

The Statutory Auditors were present at the last AGM.

Secretarial Auditor

The Board of Directors of the Company has appointed Messrs. KSR & Co., Company Secretaries LLP to conduct the Secretarial Audit of the Company pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. In accordance with the provisions of sub-section (1) of Section 204, the Secretarial Audit Report for the Financial Year 2018-19 is appended to this Report as “Annexure VI”.

The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

Cost Records and Cost Audit

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable in respect of the business activities carried out by the Company.

Reporting of Frauds by Auditors

During the year under review, the Statutory Auditors and the 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 need to be mentioned in this Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts/arrangements/transactions entered into by the Company during the Financial Year with related parties were in the ordinary course of business and on an arm''s length basis. During the year under review, your Company had not entered into any contract/ arrangement/transaction with Related Parties which could be considered material in accordance with the Policy on Related Party Transactions. Pursuant to Section 134 (3) (h) read with Rule 8 (2) of the Companies (Accounts) Rules, 2014, there are no transactions to be reported under Section 188 (1) of the Companies Act, 2013. Accordingly, the disclosure of Related Party Transactions, as required under Section 134 (3) (h) of the Companies Act, 2013 in Form AOC-2 is not applicable to the Company.

During the year under review, the Board of Directors based on the recommendations of the Audit Committee amended the Policy on Related Party Transactions in line with the revised Listing Regulations and the same is uploaded on the Company''s website at the web-link: https://www.mahindrafinance.com/policies.aspx.

Further details on the transactions with related parties are provided in the accompanying financial statements.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

No material changes and commitments have occurred after the closure of the Financial Year 2018-19 till the date of this Report, which would affect the financial position of your Company.

RISK MANAGEMENT POLICY

Your Company has a comprehensive Risk Management Policy in place and has laid down a well-defined risk management framework to identify, assess and monitor risks and strengthen controls to mitigate risks. Your Company has established procedures to periodically place before the Risk Management Committee and the Board of Directors, the risk assessment and minimisation procedures being followed by the Company and steps taken by it to mitigate these risks.

During the year under review, the Board based on the recommendations of the Risk Management Committee amended the Risk Management Policy which now specifically covers Cyber Security and related risks, in accordance with the amendments under the Listing Regulations.

The Risk Management Policy, inter alia, includes identification therein of elements of risk, including Cyber Security and related risks as well as those risks which in the opinion of the Board may threaten the existence of the Company. The 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.

The development and implementation of Risk Management Policy adopted by the Company is discussed in detail in the Management Discussion and Analysis chapter, which forms part of this Annual Report.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company promotes ethical behaviour in all its business activities and has established a vigil mechanism for its Directors, Employees and Stakeholders associated with the Company to report their genuine concerns. The Vigil Mechanism as envisaged in the Companies Act, 2013 and the Rules prescribed thereunder and the Listing Regulations is implemented through the Whistle Blower 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 per the Whistle Blower Policy implemented by the Company, the Employees, Directors, customers, dealers, vendors, suppliers, or any Stakeholders associated with the Company are free to report illegal or unethical behaviour, actual or suspected fraud or violation of the Company''s Codes of Conduct or Corporate Governance Policies or any improper activity to the Chairman of the Audit Committee of the Company or Chairman of the Company or Convenor of the Corporate Governance Cell.

During the year under review, the Board of Directors based on the recommendation of the Audit Committee has amended the Whistle Blower Policy to inter alia, enable employees to report incidents of leak or suspected leak of unpublished price sensitive information in line with the changes made in the SEBI (Prohibition of Insider Trading) Regulations, 2015.

The Whistle Blower Policy provides for protected disclosure and protection to the Whistle Blower. Under the Whistle Blower Policy, the confidentiality of those reporting violation(s) is protected and they are not subject to any discriminatory practices. Protected disclosures can also be made by sending an email at the designated email id : mmfsl_whistleblower@ mahindra.com.

The Whistle Blower Policy has been appropriately communicated within the Company and is available on the website of your Company at the web-link: https://www.mahindrafinance.com/pdf/MMFSL VigilMechanism.pdf.

No personnel have been denied access to the Audit Committee.

SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES

The Company''s subsidiaries and joint venture continue to contribute to the overall growth in revenues and overall performance of your Company.

A Report on the performance and financial position of each of the subsidiaries and the associate company included in the Consolidated Financial Statements and their contribution to the overall performance of the Company, is provided in Form AOC-1 as Annexure A to the Consolidated Financial Statements and forms part of this Annual Report.

Your Company has formulated a Policy for determining ''Material'' Subsidiaries as defined in Regulation 16 of the Listing Regulations. During the year under review, the Policy was amended in line with the requirements of the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018. This Policy has been hosted on the website of the Company and can be accessed through the web-link: https://www.mahindrafinance.com/policies.aspx.

SUBSIDIARIES

Mahindra Insurance Brokers Limited

During the year under review, Mahindra Insurance Brokers Limited (MIBL), the subsidiary in the business of Direct and Re-insurance Broking, serviced approximately 2.27 million insurance cases, with a total of 22,65,146 cases for both Life and Non-Life Retail business. The customized Life insurance cover "Mahindra Loan Suraksha” (MLS) increased from 6,85,264 lives covered with a Sum Assured of Rs. 21,579.3 Crores in the Financial Year 2017-18 to 8,13,742 lives covered with a Sum Assured of Rs. 27,765.0 Crores in the Financial Year 2018-19. A substantial portion of MLS continues to be covered in the rural markets.

MIBL achieved a growth of 11% in Gross Premium facilitated for the Corporate and Retail business lines, increasing from Rs. 2,049.1 Crores in the Financial Year 2017-18 to Rs. 2,267.8 Crores in the Financial Year 2018-19. The Total Income increased by 32% from Rs. 245.1 Crores in the Financial Year 2017-18 to Rs. 323.4 Crores in the Financial Year 2018-19. The Profit before Tax increased by 24% from Rs. 83.2 Crores to Rs. 102.9 Crores crossing a milestone of Rs. 100 Crores, and the Profit after Tax increased by 33% from Rs. 53.6 Crores to Rs. 71.5 Crores during the same period.

MIBL has been able to reach the benefit of insurance to cover 3,00,000 villages across India.

Mahindra Rural Housing Finance Limited

Mahindra Rural Housing Finance Limited (MRHFL), the Company''s subsidiary in the business of providing loans for purchase, renovation, construction of houses to individuals in the rural and semi-urban areas of the country, registered a total income of Rs. 1,383.9 Crores as compared to Rs. 1,034.8 Crores for the previous year, registering a growth of 34%. Profit before tax was 52% higher at Rs. 366.2 Crores as compared to Rs. 241.2 Crores for the previous year. Profit after tax was 44% higher at Rs. 250.5 Crores as compared to Rs. 173.9 Crores for the previous year.

During the year under review, MRHFL disbursed loans aggregating to Rs. 2,581.1 Crores as against Rs. 2,789.2 Crores in the previous year.

MRHFL continued its focus on serving customers in rural India. Majority of the loans disbursed were to customers in villages with an average annual household income of less than Rs. 2 lakhs. During the year under consideration, MRHFL disbursed home loans to around 1,71,000 households (in addition to around 7,79,000 existing households as on 31st March, 2018). MRHFL has been expanding its geographical presence to provide affordable services for rural households.

During the year under review, operations of MRHFL were strengthened in the States of Maharashtra, Gujarat, Rajasthan, Tamil Nadu, Andhra Pradesh, Telangana, Chhattisgarh, Kerala, Karnataka, Madhya Pradesh, Uttar Pradesh, Uttarakhand and Bihar.

Acquisition of Shareholding of National Housing Bank in MRHFL

In March 2019, your Company approved the acquisition of 1,18,91,511 Equity Shares of Rs. 10 each held by National Housing Bank representing 9.68% of the share capital in MRHFL, at a premium of Rs. 231.16 per share, aggregating to Rs. 286.78 Crores.

Post the acquisition subsequent to the year end, the shareholding of your Company in MRHFL stands increased from 88.75% to 98.43% of MRHFL''s share capital.

Mahindra Asset Management Company Private Limited

Mahindra Asset Management Company Private Limited (MAMCPL), a wholly-owned subsidiary of the Company acts as an Investment Manager for the schemes of Mahindra Mutual Fund. As on 31st March, 2019, MAMCPL was acting as the Investment Manager for nine schemes.

The Assets under Management in these nine schemes were Rs. 4,871 Crores in March 2019 as compared to Rs. 3,352 Crores in March 2018. Of these assets, Rs. 1,449 Crores were in equity schemes in March 2019 as compared to Rs. 1,173 Crores in March 2018. MAMCPL has empanelled more than 11,500 distributors and opened 1,59,399 investor accounts in these schemes recording a rise of more than 25%.

During the year under review, the total income of MAMCPL was Rs.28.1 Crores as compared to Rs. 23.5 Crores for the previous year, registering a growth of 19%. The operations for the year have resulted in a loss of Rs.39.5 Crores as against a loss of Rs.37.5 Crores during the previous year.

Mahindra Trustee Company Private Limited

Mahindra Trustee Company Private Limited (MTCPL), your Company''s wholly-owned subsidiary, acts as the Trustee to Mahindra Mutual Fund.

During the year, MTCPL earned trusteeship fees of Rs. 23.50 lakhs and other income of Rs. 1.10 lakhs as compared to Rs.23.87 lakhs and Rs. 0.83 lakhs respectively, for the previous year. The total expenses for the year were Rs. 25.34 lakhs as against Rs. 24.25 lakhs in the previous year. MTCPL recorded a loss of Rs. 0.83 lakhs for the year under review as against a profit of Rs. 0.44 lakhs in the previous year.

JOINT VENTURE Mahindra Finance USA LLC.

The joint venture company''s disbursement registered a decline of 8.8% to USD 755.11 Million for the year ended 31st March, 2019 as compared to USD 828.38 Million for the previous year.

Total Income grew by 20.58% to USD 67.68 Million for the year ended 31st March, 2019 as compared to USD 56.13 Million for the previous year. Profit before tax was 9.98% higher at USD 18.08 Million as compared to USD 16.44 Million for the previous year. Profit after tax grew at a healthy rate of 41.86% to USD 13.76 Million as compared to USD 9.70 Million in the previous year.

Names of companies which have become or ceased to be subsidiaries, joint ventures or associate companies during the year

During the year under review, no company has become or ceased to be a subsidiary, joint venture or associate of your Company.

Subsequent to the year end, Mahindra Finance CSR Foundation, has been incorporated on 2nd April, 2019 as a wholly-owned subsidiary of the Company registered under Section 8 of the Companies Act, 2013, to promote and support CSR projects and activities.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company, its subsidiaries and its associate(s) for the Financial Year 2018-19, prepared in accordance with the relevant provisions of the Companies Act, 2013 and applicable Indian Accounting Standards along with all relevant documents and the Auditors'' Report form part of this Annual Report.

The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies and associate(s).

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the Financial Statements of the Company, Consolidated Financial Statements along with relevant documents and separate annual accounts in respect of the subsidiaries are available on the website of the Company and can be accessed at the web-link: https://www.mahindrafinance.com/annual-reports. aspx.

The annual accounts of the subsidiaries and related detailed information will also be available for inspection at the Registered Office of the Company during working hours upto the date of the Annual General Meeting.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY''S OPERATIONS IN FUTURE There are no significant and material orders passed by the regulators or courts or tribunals that would impact the going concern status of the Company and its future operations.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Your Company has in place adequate internal financial controls with reference to financial statements, commensurate with the size, scale, and complexity of its operations. Your Company uses various industry-standard systems to enable, empower and engender businesses and also to maintain its Books of Account. The transactional controls built into these systems ensure appropriate segregation of duties, the appropriate level of approval mechanisms and maintenance of supporting records. The systems, Standard Operating Procedures and controls are reviewed by Management. These systems and controls are audited by Internal Audit and their findings and recommendations are reviewed by the Audit Committee and the IT Strategy Committee which ensures the implementation. Review of the internal financial controls environment of the Company was undertaken during the year which covered verification of entity-level control, process level control and IT controls, identification, assessment and definition of key business processes and analysis of risk control matrices, etc. The risk control matrices are reviewed on a yearly basis and control measures are tested and documented on a quarterly basis.

Reasonable Financial Controls are operative for all the business activities of the Company and no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.

Nonetheless your Company recognises that any internal control framework, no matter how well designed, has inherent limitations and accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.

COMPLIANCE WITH THE PROVISIONS OF SECRETARIAL STANDARD - 1 AND SECRETARIAL STANDARD - 2

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

The applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ''Meetings of the Board of Directors'' and ''General Meetings'', respectively, have been duly complied by your Company.

PARTICULARS OF REMUNERATION AND RELATED DISCLOSURES

Disclosures with respect to the remuneration of Directors, Key Managerial Personnel and Employees as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are as under:

Sr.	Disclosure Requirement		Disclosure Details
No.		Name of Director/ KMP	Designation	Ratio of the remuneration of each Director to median remuneration of employees
1.	Ratio of the remuneration of each Director to the median remuneration	Mr. Dhananjay Mungale	Chairman (Independent Director)	11.23X
	of the employees of the Company for the Financial Year 2018-19.	Mr M. G. Bhide**	Independent Director	9.42X
		Mr. Piyush Mankad **	Independent Director	9.05X
		Mr. C. B. Bhave	Independent Director	8.89X
		Ms. Rama Bijapurkar	Independent Director	8.06X
		Mr. V. S. Parthasarathy	Non-Executive Director	NIL*
		Dr. Anish Shah	Non-Executive Director	NIL*
		Mr. Ramesh Iyer	Vice-Chairman & Managing Director	220.22X
		Mr. V. Ravi	Executive Director & Chief Financial Officer	86.70X
		Ms. Arnavaz M. Pardiwalla	Company Secretary & Compliance Officer	24.53X

*Mr. V. S. Parthasarathy and Dr. Anish Shah do not receive any remuneration from the Company.

** resigned as Independent Directors of the Company w.e.f. the close of business hours on 31st March, 2019.

		Disclosure Details
Sr. No. Disclosure Requirement	Name of Director/KMP	Designation	% increase in Remuneration
2. Percentage increase in Remuneration of each Director, Chief Financial Officer	Mr. Dhananjay Mungale	Chairman (Independent Director)	8.96
and Company Secretary during the Financial Year 2018 -19.	Mr. M. G. Bhide**	Independent Director	10.47
	Mr. Piyush Mankad**	Independent Director	10.53
	Mr. C. B. Bhave	Independent Director	12.89
	Ms. Rama Bijapurkar	Independent Director	10.08
	Mr. V. S. Parthasarathy	Non-Executive Director	NIL*
	Dr. Anish Shah	Non-Executive Director	NIL*
	Mr. Ramesh Iyer	Vice-Chairman & Managing Director	19.93
	Mr. V. Ravi	Executive Director & Chief Financial Officer	9.42
	Ms. Arnavaz M. Pardiwalla	Company Secretary & Compliance Officer	33.15

* Mr. V. S. Parthasarathy and Dr. Anish Shah do not receive any remuneration from the Company.

** resigned as Independent Directors of the Company w.e.f. the close of business hours on 31st March, 2019.

3.	Percentage increase in the median Remuneration of employees in the Financial Year 2018-19	50.70% considering employees who were in employment for the whole of the Financial Year 2017-18 and Financial Year 2018-19.
4.	Number of Permanent employees on the rolls of the Company as on 31st March, 2019	21,789

5.	Average percentile increase already made in the salaries of employees other than the Managerial Personnel in the last Financial Year i.e. 201 8-1 9 and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration.	For employees other than Managerial Personnel who were in employment for the whole of the Financial Year 201718 and Financial Year 2018-19, the average increase is 51.75%. Justification: The remuneration of the Vice-Chairman & Managing Director and Executive Director & Chief Financial Officer is decided based on the individual performance, inflation, prevailing industry trends and benchmarks. The remuneration of eligible Non-Executive Directors consists of commission and sitting fees. While deciding the remuneration, various factors such as Director''s participation in Board and Committee Meetings during the year, other responsibilities undertaken, such as Membership or Chairmanship/ Chairpersonship of Committees, etc., were taken into consideration. The increment given to each individual employee is based on the employees'' potential, experience as also their performance and contribution to the Company''s progress over a period of time and also benchmarked against a comparator basket of relevant companies in India.
6.	Affirmation that the remuneration is as per the Remuneration Policy of the Company.	The remuneration paid/payable is as per the Policy on Remuneration of Directors and Remuneration Policy for Key Managerial Personnel and Employees of the Company.

Notes:

1) The remuneration calculated is as per Section 2(78) of the Companies Act, 2013 and includes the perquisite value of Stock Options of the Company exercised during the year.

2) The calculations are based on Employees who were on the rolls of the Company for the whole of the Financial Year 2017-18 and Financial Year 2018-19.

Mr. Ramesh Iyer, Vice-Chairman & Managing Director and Mr. V. Ravi, Executive Director & Chief Financial Officer of the Company do not receive any remuneration or commission from its Holding Company. However, Mr. Iyer has been granted stock options under the Employees'' Stock Option Scheme of the Holding Company, Mahindra & Mahindra Limited. Mr. Iyer has not exercised ESOPs of the Holding Company, during the year, which were granted in the earlier year(s).

During the year under review, Mr. Ramesh Iyer and Mr. V. Ravi have not received any remuneration or commission from any of the subsidiaries of the Company.

During the year, 28,568 Stock Options have been exercised by Mr. Ramesh Iyer and 7,142 Stock Options have been exercised by Mr. V. Ravi, under the Employees'' Stock Option Scheme of Mahindra Rural Housing Finance Limited, the Company''s subsidiary company.

The Company had 16 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.

Details of employee remuneration as required under provisions of Section 197 (12) of the Companies Act, 2013 read with Rule 5 (2) and 5 (3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are available at the Registered

Office of the Company during working hours, 21 days before the Annual General Meeting and shall be made available to any shareholder on request. Such details are also available on your Company''s website and can be accessed at the web-link: https://www. mahindrafinance.com/annual-reports.aspx. None of these employees is a relative of any Director of the Company.

None of the employees holds either by himself/herself or along with his/her spouse or dependent children, more than two per cent of the Equity Shares of the Company.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company is an equal opportunity employer and is committed to ensuring that the work environment at all its locations is conducive to fair, safe and harmonious relations between employees. It strongly believes in upholding the dignity of all its employees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictly prohibited.

The Company has in place an appropriate Policy in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, to prevent sexual harassment of its employees.

All employees (permanent, contractual, temporary and trainees) are covered under this Policy. The Policy has been widely communicated internally and is placed on the Company''s intranet portal. The Company ensures that no employee is disadvantaged by way of gender discrimination.

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee (ICC) under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to redress complaints received regarding sexual harassment.

The following is a summary of Sexual Harassment complaint(s) received and disposed off during the year 2018-19, pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder:

a) Number of complaint(s) of Sexual Harassment received during the year - Nil

b) Number of complaint(s) disposed off during the year - Nil

c) Number of cases pending for more than 90 days -Nil

d) Number of workshops/awareness programmes against sexual harassment carried out - 3 workshops were conducted at the Company''s Corporate Office. Awareness on sexual harassment was carried out to sensitize employees of the Company at branches pan-India.

e) Nature of action taken by the employer or District Officer - Not Applicable.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under sub-section (3) (m) of Section 134 of the Companies Act, 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014 are given as under :

(A) Conservation of Energy

(i) The steps taken or impact on conservation of energy:

The operations of your Company are not energy intensive. However, adequate measures have been initiated to reduce energy consumption.

Select few steps are listed:

a) Replacement of conventional lighting with Light Emitting Diode (LED) lighting:

The Company has installed LED lighting in Regional Offices of the Company during the year under review and the same has been monitored in terms of electrical consumption and expenses.

b) Replacement of old air-conditioning with updated version of machines with R-410A gas, which helps in reducing Ozone depletion.

c) Reduction in water and energy consumption and recycling of waste generation at various locations.

(ii) The steps taken by the Company for utilising alternate sources of energy: Nil.

(iii) The capital investment on energy conservation equipments: Nil.

(B) Technology Absorption

(i) The efforts made towards technology absorption: Not Applicable.

(ii) The benefits derived like product improvement, cost reduction, product development or import substitution: Not

Applicable.

(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year): Not Applicable.

(a) Details of Technology Imported;

(b) Year of Import;

(c) Whether the Technology has been fully absorbed;

(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof.

(iv) Your Company has not incurred any expenditure on Research and Development during the year under review.

(C) Foreign Exchange Earnings and Outgo

The information on foreign exchange outgo is furnished in the Notes to the Accounts. There were no foreign exchange earnings during the year.

For and on behalf of the Board

Dhananjay Mungale

Chairman

Place : Mumbai

Date : 24th April, 2019

---

Mar 31, 2019

Board’s Report

To,

The Members of

Mahindna & Mahindra Financial Services Limited

Your Directors are pleased to present their Twenty-Ninth Report together with the audited financial statements of your Company for the Financial Year ended 31st March, 2019.

The performance highlights and summarized financial results of the Company are given below:

PERFORMANCE HIGHLIGHTS

- Consolidated income for the year increased by 32% to Rs. 10,430.9 Crores as compared to Rs. 7,912.2 Crores in 2017-18;

- Consolidated income from operations for the year was Rs. 10,371.7 Crores as compared to Rs. 7,883.9 Crores in 2017-18, a growth of 32%;

- Consolidated profit before tax for the year was Rs. 2,840.8 Crores as compared to Rs. 1,904.8 Crores in

2017-18;

- Consolidated profit after tax and non-controlling interest for the year was Rs. 1,827.3 Crores as compared to Rs.1,185.2 Crores in 2017-18.

FINANCIAL RESULTS

Rs. in Crores

	CONSOLIDATED		STANDALONE
	March 2019	March 2018	March 2019	March 2018
Total Income	10,430.9	7,912.2	8,809.8	6,685.2
Less : Finance Costs	4,432.3	3,436.2	3,944.6	3,081.6
Expenditure	3,129.3	2,546.7	2,422.6	1,957.5
Depreciation, Amortization and Impairment	75.5	55.2	60.2	44.2
Total Expenses	7,637.1	6,038.1	6,427.4	5,083.3
Profit Before Exceptional Items and Taxes	2,793.8	1,874.1	2,382.4	1,601.9
Share of profit of associate	47.0	30.7	-	-
Exceptional items	-	-	-	64.9
Profit Before Tax	2,840.8	1,904.8	2,382.4	1,666.8
Less : Provision For Tax
Current Tax	711.4	665.2	576.8	549.5
Deferred Tax	262.1	23.3	248.5	41.2
Profit After Tax for the Year	1,867.3	1,216.3	1,557.1	1,076.1
Less : Non-controlling interests	40.0	31.1	-	-
Profit for the Year attributable to Owners of the Company	1,827.3	1,185.2	1,557.1	1,076.1
Balance of profit for earlier years	3,282.5	2,909.0	3,193.2	2,608.4
Less : Transfer to Debenture Redemption Reserve	146.7	50.5	146.7	50.5
Profit available for Appropriation	4,963.1	4,043.7	4,603.6	3,634.0
Add : Other Comprehensive Income/(Loss)	(9.5)	(13.6)	(8.6)	(12.3)
Less : Dividend paid on Equity Shares	296.6	163.4	293.8	161.0
General Reserve	155.8	88.4	155.8	89.1
Statutory Reserve	385.2	224.3	311.4	178.4
Gross obligation at fair value to acquire non-controlling interest	158.6	316.8	-	-
Transaction with non-controlling interest	-	5.4	-	-
Securities Premium on fresh issue of equity share capital	0.1	-	-	-
Add : Profit on sale of Equity Shares of subsidiaries	-	50.7	-	-
Balance carried forward	3,957.3	3,282.5	3,834.0	3,193.2

IMPLEMENTATION OF INDIAN ACCOUNTING STANDARDS (“IND AS”)

Your Company has prepared the Financial Statements in accordance with Indian Accounting Standards ("IND AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standards) Rules, 2016. The Company has adopted IND AS from 1st April, 2018 with effective transition date of 1st April, 2017 and accordingly, these Financial Statements together with the Financial Statements for the comparative reporting period have been prepared with the recognition and measurement principles stated therein, prescribed under Section 133 of the Companies Act, 2013 ("the Act”) read with relevant Rules issued there under and the other accounting principles generally accepted in India.

This transition to IND AS has been carried out from the erstwhile Accounting Standards notified under the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended), guidelines issued by the Reserve Bank of India ("RBI”) and other generally accepted accounting principles in India (collectively referred to as ''''the previous GAAP”). Accordingly, the impact of transition has been recorded in the opening reserve as at 1st April, 2017 and the corresponding adjustments pertaining to comparative previous year as presented in these Financial Statements have been restated/reclassified in order to conform to current year presentation.

TRANSFER TO RESERVES

The Company proposes to transfer an amount of Rs. 155.8 Crores to the General Reserve, Rs. 311.4 Crores to the Statutory Reserve and Rs. 146.7 Crores to the Debenture Redemption Reserve. An amount of Rs. 3,834.0 Crores is proposed to be retained in the Statement of Profit and Loss.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 4.0 per Equity Share and also a Special Dividend of Rs. 2.5 per Equity Share aggregating Rs.6.5 per Equity Share of the face value of Rs. 2 each payable to those Members whose names appear in the Register of Members as on the Book Closure date. The Special Dividend is being recommended in the light of the very successful completion of twenty-five years of the business operations of the Company.

The dividend including dividend tax for the Financial Year 2018-19 will absorb a sum of Rs. 477.9 Crores [as against Rs. 293.8 Crores on account of dividend of Rs. 4.0 per Equity Share and tax thereon, paid for the previous year].

The dividend pay-out is in accordance with the Dividend Distribution Policy of the Company which has been approved by the Board of Directors.

DIVIDEND DISTRIBUTION POLICY

The Dividend Distribution Policy, containing the requirements prescribed in Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is appended as “Annexure I” and forms part of this Annual Report.

The Dividend Distribution Policy can also be accessed on the Company''s website at the web-link: https://www.mahindrafinance.com/policies.aspx.

During the year, an amount of Rs. 4,97,120 being the unclaimed/unpaid dividend of the Company for the Financial Year ended 31st March, 2011 was transferred in September, 2018 to the Investor Education and Protection Fund Authority.

OPERATIONS

During the year under review, your Company completed 25 glorious years of its business operations in rural and semi-urban markets. Rural sentiments continued to be positive for the Company from the start of the year till November 2018. During this period both farm and infra cash flows were good enabling higher collection efficiency on a consistent basis despite subdued automobile growth. Elections in few States in November

2018 and the impending Lok Sabha Elections slowed down growth in the last few months of the year. However, even during this slowdown, your Company could maintain the asset growth as well as collections, by continuously engaging with customers.

Your Company further strengthened its position as a significant financier in rural and semi-urban geographies by providing a wide range of products and services. Your Company has retained its leadership position in financing the Mahindra range of vehicles and tractors. Your Company not only retained the status of major financier for Maruti vehicles in semi-urban and rural India but also expanded its coverage to include several leading vehicle dealers. With the Company''s vast semi-urban and rural distribution network, it could attract many OEMs like Hyundai, Renault, Nissan for a tie-up. Your Company consolidated its position as a leading financier in all Aggregator (like Ola and Uber) and Selfdrive vehicles (like Zoom and Revv) segment. In this year, your Company also emerged as a significant player in financing of Heavy, Medium Commercial Vehicles and Construction Equipment for major OEMs. Your Company has also launched pilot projects to understand the upcoming opportunities in Leasing. Your Company maintains a leading presence in the growing market of financing of pre-owned vehicles such as Cars, Utility Vehicles and Tractors.

Network Expansion

Your Company strengthened its pan-India presence with a network of 1,321 offices, which is one of the largest amongst Non-Banking Financial Companies. Your Company further expanded its geographical presence by reaching out to untapped villages and increased its footprint by opening new branches and making it more accessible to its customers. Your Company''s nationwide network of branches and locally recruited employees have facilitated in catering to the diverse financial requirements of its customers by identifying and understanding the needs and aspirations of the people. With its strong presence covering even the most remote areas of the country, your Company is providing flexible financing opportunities to aspiring individuals to realize their dreams and helping them to ''RISE''. Your Company believes that incessantly serving its customers and channel partners and enhancing customer relationship is the starting point of a great successful journey.

Enhanced Product Offerings

Your Company has earned the trust and confidence of its customers with its consistent, transparent and reliable services and as a result, customer satisfaction across its network continues to remain high. Your Company has cumulatively financed the aspirations of over 6 million customers since its inception, most of whom had no prior credit history. Your Company''s philosophy of helping rural customers by providing tailor-made products and services at their doorstep has given a big boost in transforming rural lives. Your Company has also launched Suvidha Loans to meet specific needs of its existing customers through its numerous Branches.

During the year under review, your Company continued to expand its reach in the Micro Small and Medium Enterprises ("MSME”) segment. MSME Assets Under Management crossed more than Rs. 3,655.90 Crores during the period under review, covering 3,719 customers.

A reorganized collection structure has enabled your Company to take advantage of improved rural cash flows from better yields and Minimum Support Price which augmented its overall collections.

Digital

Your Company remains firmly focused on addressing the changing but unique needs of its rural and semi-urban customers. Your Company has successfully implemented low bandwidth end-to-end mobile sales application with real time integrations with government databases and credit bureaus to disburse loans to customers anytime, anywhere. Your Company has also launched multilingual mobile application for its customers to view their current loan details and make payments. It also helps in getting pre-approved Suvidha Loans. The digital strategy of your Company focuses on providing tailor-made solutions to meet its customers'' needs. Your Company and its subsidiaries have embraced digital in performing different activities like customers'' acquisition, selling of Fixed Deposits, Mutual Funds and Insurance products in partnership with Common Service Centers Scheme. Your Company will continue to further its digital presence by extending its coverage to more activities including improving employee efficiency.

Getting Future Ready

In order to provide superior experience to its customers, your Company has entered into a long term partnership with a leading technology service provider. With this state-of-the-art technology, your Company will be in a position to delight its customers.

Building Analytics Capability

Your Company has consistently serviced over 6 million semi-urban and rural customers across 3.6 lakh villages, for the past 25 years. In the process, the Company has acquired a very rich database of these millions of customers which could be productively mined for not only increasing repeat business but also to cross-sell many other financial and insurance products. Towards this purpose, the Company has set up a Data Analytics and Insight Department with experienced data science professionals.

The overall disbursement registered a growth of 22% at Rs. 46,210.3 Crores as compared to Rs. 37,772.9 Crores in the previous year. Total Income grew by 32% at Rs. 8,809.8 Crores for the year ended 31st March, 2019 as compared to Rs. 6,685.2 Crores for the previous year. Profit Before Tax (PBT) grew by 43% at Rs. 2,382.4 Crores as compared to Rs. 1,666.8 Crores for the previous year. Profit After Tax (PAT) increased by 45% at Rs. 1,557.10 Crores as compared to Rs. 1,076.10 Crores in the previous year.

During the year under review, the Assets Under Management stood at Rs. 67,078 Crores as at 31st March, 2019 as against Rs. 52,793 Crores as at 31st March, 2018, a growth of 27%.

There has been no change in the nature of business of the Company during the year under review.

DISTRIBUTION OF MUTUAL FUND PRODUCTS

During the year under review, the activity of distribution of Mutual Fund Products (MFP) was carried out across 160 branches covering 24 States.

As on 31st March, 2019, the amount of Assets Under Management outstanding through the Company''s Distribution Services on MFP, aggregate of institutional and retail segment, was Rs. 1,373.48 Crores and the number of clients stood at 57,389.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of the Company''s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

CORPORATE GOVERNANCE

Your Company practices a culture that is built on core values and ethical governance practices. Your Company is committed to transparency in all its dealings and places high emphasis on business ethics. A Report on Corporate Governance along with a Certificate from Messrs. KSR & Co., Company Secretaries LLP regarding compliance with the conditions of Corporate Governance as stipulated in Regulations 17 to 27, clauses (b) to (i) of sub-regulation (2) of Regulation 46 and paragraphs C, D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of the Annual Report.

SHARE CAPITAL

The issued, subscribed and paid-up Equity Share Capital as on 31st March, 2019 was Rs. 123.55 Crores, comprising of 61,77,64,960 Equity Shares of the face value of Rs. 2 each, fully paid-up.

There was no change in the Share Capital during the year under review.

The Company has neither issued shares with differential rights as to dividend, voting or otherwise, nor has issued sweat equity, other than Employee Stock Options under the Employees'' Stock Option Scheme referred to in this Report, during the year under review.

As on 31st March, 2019, none of the Directors of the Company holds instruments convertible into Equity Shares of the Company.

STOCK OPTIONS

During the year under review, on the recommendation of the Nomination and Remuneration Committee of your Company, the Trustees of the Mahindra & Mahindra Financial Services Limited Employees'' Stock Option Trust have granted 21,94,249 Stock Options to Eligible Employees under the Mahindra & Mahindra Financial Services Limited Employees'' Stock Option Scheme-2010 ("2010 Scheme”). No new Options were granted under the Mahindra & Mahindra Financial Services Limited Employees'' Stock Option Scheme-2005 ("2005 Scheme”). The Company does not have any scheme to fund its employees to purchase the shares of the Company. No employee has been issued stock options during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant.

During the year, the Nomination and Remuneration Committee has inter alia, approved the transfer of 7,85,275 Stock Options, being the balance number of Options available in the 2005 Scheme to the 2010 Scheme.

Pursuant to the aforesaid transfer of 7,85,275 Options to the 2010 Scheme on 14th March, 2019, the 2005 Scheme stands closed, effective from the date of the said transfer.

The 2010 Scheme of the Company is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("SBEB Regulations”) and there were no material changes made to the said Scheme. A Certificate from Messrs. B S R & Co. LLP, Chartered Accountants, Statutory Auditors of the Company, pursuant to Regulation 13 of the SBEB Regulations would be placed at the Annual General Meeting for inspection by Members.

Voting rights on the Shares issued to employees under the aforesaid Scheme are either exercised by them directly or through their appointed proxy.

The details of the Employees'' Stock Options and the Company''s Employees'' Stock Option Trust as required under the SBEB Regulations read with SEBI Circular CIR/CFD/ POLICY CELL/2/2015 dated 16th June, 2015 have been uploaded on the Company''s website and can be accessed at the web-link: https://www. mahindrafinance.com/annual-reports.aspx.

ECONOMY

Global

After strong growth in 2017 and early 2018, global economic activity slowed notably in the second half of last year, reflecting a confluence of factors affecting major economies. From an accelerating economic activity almost across the world with projected growth in 2019 being at 3.9 percent, a lot have changed in the last year. China''s growth declined following a combination of needed regulatory tightening to rein in shadow banking and an increase in trade tensions with the United States. The euro area economy lost more momentum than expected as consumer and business confidence weakened and car production in Germany was disrupted by the introduction of new emission standards; investment dropped in Italy as sovereign spreads widened; and external demand, especially from emerging Asia, softened. Elsewhere, natural disasters hurt activity in Japan.

Trade tensions increasingly took a toll on business confidence and, so, financial market sentiment worsened, with financial conditions tightening for vulnerable emerging markets and advanced economies, weighing on global demand. Conditions have eased in 2019 as the US Federal Reserve signaled a more accommodative monetary policy stance and markets became more optimistic about a US-China trade deal, but they remain slightly more restrictive than in the fall.

Outlook

As a result of these developments, global growth is now projected to slow from 3.6 percent in 2018 to 3.3 percent in 2019, before returning to 3.6 percent in 2020. The projected pickup in the second half of 2019 is predicated on an ongoing buildup of policy stimulus in China, recent improvements in global financial market sentiment, the waning of some temporary drags on growth in the euro area, and a gradual stabilization of conditions in stressed emerging market economies.

While global growth could surprise favorably if trade differences are resolved quickly so that business confidence rebounds and investor sentiment strengthens further, the balance of risks to the outlook remains on the downside. A further escalation of trade tensions and the associated increases in policy uncertainty could further weaken growth. Across all economies, the imperative is to take actions that boost potential output, improve inclusiveness, and strengthen resilience.

Domestic

After averaging close to 8 per cent through Q3:2017-18 to Q1:2018-19, domestic economic activity lost speed. Domestic economic activity lost pace in Q2 and Q3:FY2019, with coincident indicators suggesting a sharper deceleration in Q4. Aggregate demand weakened in Q2 by a large drag from net exports, which became entrenched in Q3 due to deceleration in public spending and private consumption.

Headline CPI inflation has declined sharply since mid- 2018, driven by the sustained fall in food inflation (even turning into deflation during October 2018-February 2019), the waning away of the direct impact of house rent allowances for central government employees, and more recently, by a sharp fall in fuel inflation.

During the end of second quarter, amid certain defaults in the NBFC sector, a credit freeze was witnessed in the bond market especially for NBFCs. The spread of 5-year AAA corporate bond yield over 5-year G-sec yield went up, further the spread for NBFCs/HFCs were even higher with availability of liquidity being limited. For NBFCs and HFCs combined, the share of participation in the issuance of Commercial Paper reduced from upwards of one-half to closer to one-third of the total issuances reflecting increased credit risk premia in the aftermath of the defaults.

Outlook

Looking ahead, favorable factors such as an increase in financial flows to the commercial sector, stabilization of crude oil and other commodity prices, consumption and investment enhancing proposals in the Union Budget 2019-20, and, the expectation of a normal monsoon are expected to boost economic activity. However, there could be headwinds from greater than expected moderation in global growth and global trade as well as unanticipated volatility in global financial markets.

GDP growth is projected to improve from 7.0 per cent in 2018-19 to 7.2 per cent in 2019-20. There are upside as well as downside risks to the baseline growth scenario. The boost to private investment activity from faster resolution of stressed assets and increased as well as more broad-based credit off take amidst rising capacity utilization can raise the baseline growth projection. Conversely, further escalation of trade tensions and protectionist trends, increased volatility in global financial conditions over the uncertainty of the stance of monetary policy in the US and other advanced economies, uncertainty surrounding Brexit, a sharper slowdown in the Chinese economy and deviations of the south-west monsoon from the baseline assumption of a normal monsoon may pose downside risks to the baseline growth path.

Source: International Monetary Fund (IMF), RBI Finance

The NBFC sector experienced liquidity problems in the second half of the financial year 2018-19. The funding squeeze has contributed to higher funding costs and a slowdown in loan growth for non-banking financial companies. Your Company continued to focus on managing cash efficiently and ensured that it had adequate liquidity and back-up lines of credit.

During the year under review, the Reserve Bank of India ("RBI”) held six Bi-monthly Monetary Policy Committee ("MPC”) meetings. The Policy Repo rates under the Liquidity Adjustment Facility ("LAF”) was at 6.00% at the beginning of the year. The MPC took the decision to increase the Policy Repo Rate under the LAF by 25 basis points each in the second and third meetings to 6.50% and maintained it at that level till the fifth meeting. Finally, in the sixth meeting, MPC took the decision to reduce the Policy Repo Rate under the LAF by 25 basis points from 6.50% to 6.25%. The MPC changed its stance from "neutral” to "calibrated tightening” in the fourth policy review and reverted back to "neutral” in the sixth policy review. The market continued to expect further reduction in the policy rate.

At the start of the fiscal year (April 2018), 10-year G-Sec benchmark yields (7.17% Gov Stock 2028), were trading at 7.40% levels which was at similar level by end of March 2019. However, in the wake of rising trade tensions, concerns about a "no deal” Brexit and signs of slowing down of the global economy, financial markets sentiments turned cautious and 10-year G-Sec yield touched a peak of 8.18% (around September 2018). The spread of 5-year AAA corporate bond yield over 5-year G-Sec yield moved up, reflecting increased credit risk premia in the aftermath of certain defaults in the NBFC sector. The defaults also led to a liquidity crisis for several non-banking financial companies. The spread declined consequent to the Reserve Bank''s announcement to inject rupee liquidity through long-term foreign exchange buy/sell swap auction. Divergent movements were observed in various segments of the domestic financial market as they reacted differently to the evolving global and local developments during second half of the Financial Year 2018-19. Lower inflation prints, continuing fall in crude oil prices and buoyed sentiments after the announcement of multiple open market purchases by the RBI, resulted in a decline in yields.

During the last quarter of the year under review, a new 10-year benchmark (7.26% GS 2029 - issued in January 2019) which closed the year at 7.35% was issued. During the year, the INR depreciated by 6.7% from INR 65 to INR 69 per USD with intermittent levels being at INR 74/USD around mid-October. The sudden sharp increase and heightened volatility in the currency resulted in inflows from international market being tightened, resulting in further pressure on the currency, which subsided with the global crude prices subsiding.

With a view to promoting and developing a liquid and dynamic corporate bond market, the Securities and Exchange Board of India ("SEBI”) vide its Circular No. SEBI/HO/DDHS/CIR/P/2018/144 dated 26th November, 2018 has provided a framework comprising detailed guidelines for raising of funds by issuance of debt securities and mandated all "large corporates” to raise at least 25 per cent of their incremental borrowings during a financial year by issuing debt securities from the financial year 201920 onwards.

Your Company has been identified as a "Large Corporate” as per the applicability criteria stipulated in the aforesaid SEBI Circular.

During the year under review, your Company continued with its diverse methods of sourcing funds in addition to regular borrowings like Secured and Unsecured Debentures, Term Loans, Fixed Deposits, Commercial Papers, etc., and maintained prudential Asset/ Liability match throughout the year. Your Company sourced long-term debentures and loans from banks and other institutions at attractive rates. Your Company, for the first time has raised funds through issuance of Market Linked Debentures, External Commercial Borrowings ("ECB”) and internationally rated securitisation transactions.

During the year, your Company has successfully completed 7 (seven) securitisation transactions aggregating to Rs. 4,389.20 crores and raised around US- 200 million through ECB.

- Private Placement Issues of Non-Convertible Debentures

During the year under review, your Company issued Secured/Unsecured Redeemable NonConvertible Debentures including Secured Redeemable Principal Protected Non-Convertible Market Linked Debentures ("NCDs”) aggregating to Rs. 6,800.90 Crores on a private placement basis, in various tranches.

As specified in the respective offer documents, the funds raised from NCDs were utilised for the purpose of financing, repayment of dues of other financial institutions/Banks or for longterm working capital.

- Public Issuance of Non-Convertible Debentures

Your Company continues to broaden the liability mix by bringing in new instruments as well as diversifying the investor base and profile. During the year under review, your Company successfully raised Rs. 2,146.99 Crores through its third public issue of 2,14,69,947 Secured Redeemable Non-Convertible Debentures and Unsecured Subordinated Redeemable Non-Convertible Debentures of face value of Rs. 1,000 each, consisting of 1,81,01,224 Secured Redeemable NonConvertible Debentures and 33,68,723 Unsecured Subordinated Redeemable NonConvertible Debentures ("NCDs”). With this issuance, approximately 8% of your Company''s borrowing is funded through this instrument. The NCDs were allotted on 18th January, 2019 and listed on BSE Limited on 21st January, 2019.

The net proceeds received from the Public Issue were used for the purpose of onward lending, financing, refinancing the existing indebtedness of the Company, long-term working capital requirements, Issue expenses and for general corporate purposes. Details of the Issue and the end use were furnished to the Audit Committee.

The Company has been regular in making payments of principal and interest on the NCDs. There are no NCDs which have not been claimed by investors or not paid by the Company after the date on which the NCDs became due for redemption.

- Rupee Denominated Medium Term Note (MTN)

The Rupee Denominated Medium Term Note (MTN) programme of your Company, is listed on the Singapore Exchange Securities Trading Limited. During the year under review, no securities have been issued by your Company under the programme.

INVESTOR RELATIONS

Your Company has been continuously interacting and endeavours to further improve its engagement with Domestic and International investors/analysts by participating either in-person meetings or through use of technology i.e. conference calls, video-conferencing, Tele-presence meetings. Your Company attended multiple investor meets organised by reputed Global and Domestic Broking Houses during the year, both in India and abroad, to communicate details of its performance, important regulatory and market developments and exchange of information. Quarterly and annual earnings calls are scheduled through structured conference calls to keep various stakeholders informed about the past performance and future outlook of the industry, especially those having a bearing on the Company. These interactions with institutional shareholders, fund managers and analysts are based on generally available information that is accessible to the public on a non-discriminatory basis. Your Company uploads the transcript of the quarterly earnings calls on its website which can be accessed by existing and potential investors and lenders.

Your Company believes in transparent communication and building a relationship of mutual understanding and trust. Your Company further ensures that critical information about the Company is available to all the investors by hosting such information on the Company''s website.

CAPITAL ADEQUACY

As on 31st March, 2019, the Capital to Risk Assets Ratio (CRAR) of your Company was 20.3% which is well above the minimum requirement of 15% CRAR prescribed by the Reserve Bank of India.

CREDIT RATING

The credit rating details of the Company as on 31st March, 2019 were as follows:

Rating Agency	Type of Instrument	Rating*	Remarks
India Ratings & Research Private Limited	Commercial Paper Programme and Bank Facilities (Fund/NonFund Based Working Capital Limit)	''IND A1 ''	The ''A1'' rating indicates the Highest Level of Rating. Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
	Long-term Debt instruments, Subordinated Debt Programme and Bank Facilities (Fund/NonFund Based Working Capital Limit)	''IND AAA/Stable'' ''IND PP-MLD AAA emr/Stable''	The ''AAA'' ratings denote the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. ''PP-MLD'' indicates the full principal protection in the equity-linked notes wherein the issuer is obligated to pay the full principal upon maturity. Suffix “eirr” denotes the exclusion of the embedded market risk from the rating.
CARE Ratings Limited (Formerly known as Credit Analysis & Research Limited)	Long-term Debt instruments and Subordinated Debt Programme	''CARE AAA/Stable''
Brickwork Ratings India Private Limited	Long-term Subordinated Debt Programme	''BWR AAA/Stable''
CRISIL Limited	Fixed Deposit Programme	''CRISIL FAAA/Stable''
	Long-term Debt Instruments, Subordinated Debt Programme and Bank Loan Facilities	''CRISIL AA /Stable''	The ''AA '' rating indicates a high degree of safety with regard to timely payment of financial obligations. Such instruments carry very low credit risk.
	Commercial Paper Programme and Bank Loan Facilities	''CRISIL A1 ''	The ''A1'' rating indicates the Highest Level of Rating. Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.

* The ratings mentioned above were reaffirmed by the Rating Agencies during the Financial Year 2018-19. With the above rating affirmations, your Company continues to enjoy the highest level of rating from all major rating agencies at the same time.

Out of the above, Tier I capital adequacy ratio stood at 15.5% and Tier II capital adequacy ratio stood at 4.8%, respectively.

RBI GUIDELINES

The Company continues to comply with all the applicable regulations prescribed by the Reserve Bank of India ("RBI”), from time to time.

ACHIEVEMENTS

Your Company won several awards and accolades during the year under review. Select few awards/ recognition are enumerated hereunder:

Corporate Governance

- Listed amongst the Top 10 Companies of the ''S&P BSE 100 Companies'' with a ''High Corporate Governance Score'' for the second time in a row, in a study jointly conducted by International Finance Corporation (IFC), a member of the World Bank Group, BSE Limited (BSE) and Institutional Investor Advisory Services (IiAS), based on G20/OECD Principles of Corporate Governance.

Business & Marketing:

- Adjudged the Gold Award Winner as the "Retail NBFC of the Year 2018” by Outlook Money Awards 2018.

- Won two prestigious Awards at the "Rural Marketing Forum and Awards 2019” in the following categories:

a. Most Effective use of Direct Marketing to Rural Consumers for "2 Wheeler to 20 Wheeler Maha Loan Mela”.

b. Best Integrated Rural Marketing Campaign for "Vehicle Loan Festival”.

- Won the Silver Award for MF SUTRADHAAR program and Bronze Award for Suvidha Loans at Flame Awards Asia 2018.

- Won the PRCI (Public Relations Council of India) Collateral Awards 2019 in the following categories:

i) Crystal Award for Table Calendar-2019

ii) Gold Award for Annual Report design

iii) Advertisement Campaign on Vehicle Loan Festival

CSR & Sustainability

- Conferred with the coveted Golden Peacock Award for Corporate Social Responsibility-2018 by the Institute of Directors.

- Listed in Dow Jones Sustainability Index (DJSI) Emerging Markets category for the 6th consecutive year.

- Honoured with ET NOW CSR Leadership Award 2018 for Best CSR Practices and Skill development.

- Included in the "Sustainability Yearbook 2019” released by RobecoSAM.

- Won the Gold Award for Women and Child Health initiative at the CSR Health Impact Awards 2018.

Human Resources

- Listed by Great Place to Work® Institute India in the Top 100 list of Great Places to work in India for 3 years in a row.

- Ranked 11th amongst "25 Best Large Workplaces in Asia 2019”, by Great Place to Work® Institute.

- Won three awards from Great Place to Work® Institute India:

a. Ranked 14th in India''s Best Companies to Work for 2018.

b. Special Category Award in Career Management.

c. Ranked among India''s 15 Best Workplaces in BFSI-2018.

- Listed in Top 100 Best Companies for Women - 2018 by Working Mother and Avtar.

- Won two awards at the TISS Leapvault CLO Summit 2018 in the following categories:

a. Gold Award for the Best Coaching/ Mentoring intervention for "GURU-Mentoring Program”.

b. Silver Award for Best Mobile Learning Intervention for "Manthan - Training Module”.

- Bagged four awards at the Mega Corporate Film Festival Seminar & Awards 2018 in the following categories:

a. First Prize in the Best Corporate Film - "Communicating Employee Engagement-2018”.

b. Second Runners-up in the Best Corporate Film "Communicating Vision, Values, Mission, Purpose - 2018”.

c. Second Runners-up in the Best Corporate Film for "Communicating Organizational Culture - 2018”.

d. Third Runners-up in "Communicating Commitment to Woman Empowerment -2018”.

Information & Technology

- The Project, Voice Induced Business Enablement has won the "Flame Awards - Asia” (Gold category) for the Best Small Budget Campaign of the Year.

FIXED DEPOSITS AND LOANS/ADVANCES

Your Company provides a wide range of Fixed Deposit schemes that cater to the investment needs of various classes of investors. These Deposits carry attractive interest rates with superior service enabled by robust processes and technology. In order to tap rural and semi-urban savings and reach out to the farthest customers, your Company continues to expand its network and make its presence felt in the most remote regions of the country.

During the year, CRISIL has reaffirmed a rating of ''CRISIL FAAA/Stable'' for your Company''s Fixed Deposits. This rating represents the highest degree of safety regarding timely servicing of financial obligations and carries the lowest credit risk. Your Company''s Deposits continue to be a preferred investment amongst the investors.

As on 31st March, 2019, your Company has mobilized funds from Fixed Deposits to the tune of Rs. 5,698.88 Crores, with an investor base of over 1,86,359 investors.

Your Company continues to serve the investors by introducing several customer centric measures on an ongoing basis to further strengthen its processes in sync with the requirements of the Fixed Deposit holders. The Company communicates various intimations via SMS, e-mails, post, etc., to its investors as well as sends reminder emails to clients whose TDS is likely to be deducted before any payout/ accrual. Your Company also provides online renewal facility, online generation of TDS certificates from customer/broker portal and Seamless Investment process for employees.

During the year under review, your Company has rolled out several initiatives aimed at offering a superior customer experience. Some key ones are:

- Initiation of online acceptance of Deposits through the Company''s website;

- Introduction of Dhan Samruddhi Deposits which are available through Digital Channel Partners;

- Introduction of Bulk Deposits above Rs. 5 Crores.

As at 31st March, 2019, 6,152 Deposits amounting to Rs.7.22 Crores had matured for payment and remained unclaimed. The unclaimed Deposits have since reduced to 5,421 Deposits amounting to Rs.

6.02 Crores. There has been no default in repayment of Deposits or payment of interest during the year.

Your Company being a Non-Banking Financial Company, the disclosures required as per Rule 8 (5) (v) and (vi) of the Companies (Accounts) Rules, 2014 read with Sections 73 and 74 of the Companies Act, 2013, are not applicable to it.

The information pursuant to Clause 35(1) of Master Direction DNBR.PD.002/03.10.119/2016-17 dated 25th August, 2016 issued by the Reserve Bank of India on Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016, regarding unpaid/unclaimed public deposits as on 31st March, 2019, is furnished below:

i. total number of accounts of Public Deposits of the Company which have not been claimed by the depositors or not paid by the Company after the date on which the deposit became due for repayment: 6,152.

ii. the total amounts due under such accounts remaining unclaimed or unpaid beyond the dates referred to in clause (i) as aforesaid: Rs. 7,22,20,437.

Depositors were intimated regarding the maturity of deposits with a request to either renew or claim their Deposits. Your Company continues to send intimation letters via registered post every 3 months to all those Fixed Deposit holders whose Deposits have matured as well as to those whose Deposits remain unclaimed. Where the Deposit remains unclaimed, follow-up action is also initiated through the concerned agent or branch.

Pursuant to Section 125(2) (i) of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules”) as amended from time to time, matured Deposits remaining unclaimed for a period of seven years from the date they became due for payment are required to be transferred to the Investor Education and Protection Fund (IEPF) Authority established by the Central Government. Further, interest accrued on the matured deposits which remain unclaimed for a period of seven years from the date of payment will also be transferred to the IEPF under Section 125(2] (k). The concerned depositor can claim the Deposit and/or interest from the IEPF Authority by following the procedure laid down in the IEPF Rules.

During the year under review, an amount of Rs. 0.09 Crores has been transferred to the IEPF Authority.

During the year under review, the Company has not given any loans and advances in the nature of loans to its subsidiaries or associate or loans and advances in the nature of loans to firms/companies in which Directors are interested.

Accordingly, the disclosure of particulars of loans/ advances, etc., as required to be furnished in the Annual Accounts of the Company pursuant to Regulations 34(3) and 53(f) read with paragraph A of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is not applicable to the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS IN SECURITIES

Pursuant to Section 186(11) of the Companies Act, 2013 ("the Act”), the provisions of Section 186(4) of the Act requiring disclosure in the Financial Statements of the full particulars of the loans made and guarantees given or securities provided by a Non Banking Financial Company in the ordinary course of its business and the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient of the loan or guarantee or security are exempted from disclosure in the Annual Report.

Further, pursuant to the provisions of Section 186 (4) of the Act, the details of investments made by the Company are given in the Notes to the Financial Statements.

SUSTAINABILITY INITIATIVES

Sustainability has invariably been a core to the purpose of Mahindra Finance. At the heart of our organizational strategy is an inclusive business model that enables the residents of semi-urban and rural India to access formal channels of credit/finance which helps them in creating long-term value. In our journey spanning more than two decades, we have empowered the lives of millions of Indians by providing access to myriad financial services and products, which have helped them to "Rise for Good”. Your Company has been enabling them to meet their aspirations through financial product offerings. Your Company helps the people build their homes through affordable home loan services provided by Mahindra Rural Housing Finance Limited, secure their life and assets by insurance solutions of Mahindra Insurance Brokers Limited and offers investment options by Mahindra Asset Management Company Private Limited. By providing the right set of opportunities in the remote areas and enabling our customers to advance in their lives, we are making positive contribution to multiple stakeholders. Your Company lays strong emphasis on customer centricity with its customer base spread across more than 3.5 lakh villages in India with majority of them belonging to the ''Earn and Pay'' segment.

Your Company commenced its journey towards reporting sustainability performance in 2008-09 through Mahindra Group''s Sustainability Report and in the year 2012-13 your Company released its first standalone Sustainability Report. In the reporting year, the Company released its Sixth Sustainability Report for the Financial Year 2017-18 with the theme "I Am Responsible” based on Integrated Reporting framework and adhering to the Global Reporting Initiative''s (GRI Standards). The Report embodies a motto that each individual of the organization firmly believes in ''Making Sustainability Personal'' under the theme "I Am Responsible”. It also showcases how your Company responsibly creates value for all its stakeholders.

This Report is hosted on your Company''s website at the web-link: https://www.mahindrafinance.com/ sustainability.aspx.

Your Company continued to focus on sustainability awareness for different stakeholders and took various initiatives to engage them on these fronts. In 2018, your Company became the 1st Financial Company in India to be committed towards call to action for Science Based Targets. The Science Based Targets initiative (SBTi) requires companies to publicly commit to setting carbon emission reduction targets that are in line with climate science.

Your Company has been listed on the Dow Jones Sustainability Index (DJSI) Emerging Market Trends for the sixth consecutive year. Your Company is the only Company from amongst the Diversified Financial Services Companies in India to have made it to this list. To be included in the DJSI, companies are assessed and selected based on their long term Environmental, Social and Governance (ESG) management plans and actions. Your Company got selected in "The Sustainability Yearbook 2019” being the only Financial Services Sector Company to qualify amongst 9 companies from India. This signifies your Company being amongst top Sustainability performers in Diversified Financial Services Sector across the World based on Corporate Sustainability Assessment done by Robeco SAM.

Your Company''s approach has been to make its environmental disclosure transparent, and accordingly, it has been reporting disclosures and reports on its performance through the Carbon Disclosure Project (CDP) India since Financial Year 2011-12. During the reporting year, your Company attained CDP Performance Band - C meaning that your Company is at "Awareness” band.

During the year, your Company made proactive efforts to reduce CO2 emissions (carbon footprint) through Project "Mahindra Hariyali”, by planting more than 71,000 saplings throughout the country. The Company''s Annual Family Fun Day "Vrindavan” attained Yale''s Gold Level Green Event Certification as 87% waste generated at Vrindavan was recycled, composted and sent to biogas plants.

Your Company is gearing up to be future ready by making sustainability and climate change an integral part of its risk framework and taking measures to mitigate and manage them. Weather reports are assessed on a regular basis and aligned with business operations to protect the customers and minimize the risk impact. The outlook for the future has been positive and your Company is well equipped to enable its customers and communities to progress through its inclusive and sustainable business model.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report ("BRR”) of your Company for the year 2018-19 forms part of this Annual Report as required under Regulation 34(2) (f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is appended as “Annexure II”.

Your Company is building an inclusive organization by empowering all the stakeholders and facilitating their contribution towards growth that is both holistic and long term. Through the inclusive business model, your Company is endeavoring to cater to the bottom of the pyramid in the rural and semi-urban areas, enabling them to earn their livelihood through varied financial products and services. Your Company has always been conscious of its role as a responsible corporate citizen. Through its wide network of branches with locally-recruited employees, strong and lasting relationships with its stakeholders, large customer base, vast experience and market knowledge, your Company is providing financial resources to underserviced regions of the country.

The BRR can also be accessed on the Company''s website at the web-link: https://www.mahindrafinance.com/ sustainability.aspx.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Transforming lives of the rural population has been the primary focus of all CSR initiatives undertaken by your Company. The endeavour is to empower the rural communities and help them unleash their potential. Your Company has identified Healthcare, Education (including Livelihood) and Environment as key CSR thrust areas for the welfare of one of the major stakeholders - rural communities in India.

Building on the momentum created last year through several education and livelihood projects, your Company continued to provide scholarships to 2,500 undergraduate and 500 graduate students, organised visits to municipal schools and financial support to run a vocational skill building center catering to 500 People with Disability. In an effort to encourage more women to take up livelihood opportunities, your Company also implemented Drivers Training Program for 375 women and an Auto-mechanic Training Program for 180 women. Further, your Company is empowering youth, women and working population with the knowledge of sound financial practices to enable them in managing their money better by conducting a Financial Literacy workshop. Reaffirming its commitment to the cause of education, your Company continued its support to over 10,450 underprivileged girl children from socially and economically marginalised families living in urban, rural and tribal areas of India. To promote inclusive growth of socially and economically disadvantaged youth, your Company continued its support to Mahindra Pride School which skilled 3,453 youth and all of them have been absorbed in various organisations. Further, an additional 39,783 students were trained through 866 batches of Mahindra Pride Classrooms conducted through Polytechnics and Arts & Science Colleges in 14 States.

In the area of healthcare, your Company organized nationwide blood donation drives, health checkup camps, Swachh Bharat activities, donated 14 ambulances that have made access to primary healthcare centers easy, for several tribal and rural patients across the nation. Your Company has revamped the Medical Equipment Donation project to provide financial support for procuring crucial equipment used in liver transplants and dialysis for kidney patients. Additionally, your Company continued its support for Maternal & Child Health Care project which provides nutritional supplementation to anemic pregnant and lactating women, adolescents and malnourished children in rural areas.

For increasing focus on better environment, your Company helped build a greener tomorrow by planting over 72,500 trees with a higher survival rate.

Apart from the key thrust areas, your Company contributed funds for other causes such as preservation and promotion of the fine arts & culture and conducted visits to orphanage homes, differently abled homes, homes for the elderly, etc., to re-affirm its pledge to the society.

During the year under review, your Company has spent Rs. 26.87 Crores on CSR projects/programs. The amount equal to 2% of the average net profit for the past three financial years required to be spent on CSR activities was Rs. 26.81 Crores. Your Company is in compliance with the statutory requirements in this regard.

CSR COMMITTEE

During the year under review, the CSR Committee comprised of Mr. Piyush Mankad (Chairman), Mr. Ramesh Iyer, Mr. V. Ravi and Dr. Anish Shah. The Committee, inter alia, reviews and monitors the CSR activities.

Consequent upon the resignation of Mr. Piyush Mankad, as an Independent Director with effect from the close of business hours on 31st March, 2019, the Committee was reconstituted effective from 9th April, 2019 as follows:

Name	Category
Mr. Dhananjay Mungale	- Chairman of the Committee (Independent Director)
Ms. Rama Bijapurkar	- Independent Director
Mr. Ramesh Iyer	- Vice-Chairman & Managing Director
Mr. V. Ravi	- Executive Director & Chief Financial Officer
Dr. Anish Shah	- Non-Executive Non Independent Director

CSR POLICY

The CSR Policy of the Company duly amended, is hosted on the Company''s website at the web-link: https://www.mahindrafinance.com/csr.aspx and a

brief outline of the CSR Policy and the CSR initiatives undertaken by the Company during the year as per Annexure prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been appended as “Annexure III” to this Report.

EXTRACT OF ANNUAL RETURN

Pursuant to sub-section 3(a) of Section 134 and subsection (3) of Section 92 of the Companies Act, 2013, read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return as at 31st March, 2019 in Form No. MGT-9, is appended as “Annexure IV” and forms part of this Report.

The Annual Return of the Company as at 31st March, 2019 has been placed on the website of the Company and can be accessed at https://www. mahindrafinance.com/annual-reports.aspx.

BOARD MEETINGS AND ANNUAL GENERAL MEETING

The calendar of the Board/Committee Meetings and the Annual General Meeting is circulated to the Directors in advance to enable them to plan their schedule for effective participation at the respective meetings. Additional Board Meetings are convened by giving appropriate notice to address business exigencies. At times certain decisions are taken by the Board/Committee through circular resolutions.

All the decisions and urgent matters approved by way of circular resolutions are placed and noted at the subsequent Board/Committee Meeting.

The Board of Directors met six times during the year under review, on 25th April, 2018, 27th July, 2018, 24th October. 2018, 25th January. 2019, 7th March, 2019 and 27th March, 2019. The requisite quorum was present for all the Meetings. The maximum time gap between any two Meetings was not more than one hundred and twenty days. These Meetings were well attended. The 28th Annual General Meeting (AGM) of the Company was held on 27th July, 2018.

Detailed information on the Meetings of the Board, its Committees and the AGM is included in the Report on Corporate Governance, which forms part of this Annual Report.

MEETINGS OF INDEPENDENT DIRECTORS

The Independent Directors met twice during the year under review, on 24th October, 2018 and 6th March, 2019. The Meetings were conducted in an informal manner without the presence of the Wholetime Directors, the Non-Executive Non-Independent Directors, or any other Management Personnel.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company has various Committees which have been constituted as a part of good corporate governance practices and the same are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

During the year under review, the Audit Committee comprised of Mr. C. B. Bhave as the Chairman and Mr. Dhananjay Mungale, Mr. M. G. Bhide, Ms. Rama Bijapurkar, Mr. Piyush Mankad, Mr. V. S. Parthasarathy and Dr. Anish Shah as Members.

Consequent upon the resignation of Mr. M. G. Bhide and Mr. Piyush Mankad, Independent Directors from the Board of Directors with effect from the close of business hours on 31st March, 2019, and the appointment of Mr. Milind Sarwate as an Independent Director of the Company with effect from 1st April, 2019, the Committee stands reconstituted effective from 9th April, 2019 as follows:

Name	Category
Mr. C. B. Bhave	- Chairman of the Committee (Independent Director)
Mr. Dhananjay Mungale	- Independent Director
Ms. Rama Bijapurkar	- Independent Director
Mr. V. S. Parthasarathy	- Non-Executive Non Independent Director
Dr. Anish Shah	- Non-Executive Non Independent Director
Mr. Milind Sarwate	- Independent Director

The recommendations of the Audit Committee were duly approved and accepted by the Board during the year under review.

The other Committees of the Board are:

i) Nomination and Remuneration Committee

ii) Stakeholders Relationship Committee

iii) Corporate Social Responsibility Committee

iv) Risk Management Committee

v) Asset Liability Committee

vi) Committee for Strategic Investments

vii) IT Strategy Committee

The details with respect to the composition, powers, roles, terms of reference, Meetings held and attendance of the Directors at such Meetings of the relevant Committees are given in detail in the Report on Corporate Governance of the Company which forms part of this Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Directors

Mr. M. G. Bhide and Mr. Piyush Mankad were appointed as Independent Directors by the Members at the 24th Annual General Meeting held on 24th July, 2014 for a term of 5 (five) consecutive years commencing from 24th July, 2014 to 23rd July, 2019, not liable to retire by rotation.

Pursuant to the applicability of Regulation 17(1A) of the Listing Regulations, as amended by the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, mandating approval of Members by a special resolution for the appointment/continuance of Non-Executive Director(s) above the age of 75 years, effective from 1st April, 2019, Mr. M. G. Bhide and Mr. Piyush Mankad, who have attained the age of 75 years, tendered their resignation as Independent Directors from the Board of Directors of the Company with effect from the close of business hours on 31st March, 2019.

The Board places on record its sincere appreciation for the invaluable contribution and guidance provided by Mr. M. G. Bhide and Mr. Piyush Mankad during their tenure as Independent Directors of the Company.

The Board of Directors, based on the recommendation of the Nomination and Remuneration Committee, vide its Circular Resolution dated 25th February, 2019 proposed the appointment of Mr. Milind Sarwate as an Independent Director of the Company to hold office for a term of 5 (five) consecutive years commencing from 1st April, 2019 to 31st March, 2024, not liable to retire by rotation, subject to the approval of the Shareholders.

Subsequent to the above, the Shareholders of the Company have pursuant to the provisions of Sections 149, 150, 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014, approved the appointment of Mr. Milind Sarwate as an Independent Director of the Company with effect from 1st April, 2019 for a term of 5 (five) consecutive years, vide an Ordinary Resolution passed by means of a Postal Ballot on 31st March, 2019.

Mr. V. Ravi, Executive Director & Chief Financial Officer, retires by rotation at the forthcoming Annual General Meeting and, being eligible, offers himself for reappointment.

The Nomination and Remuneration Committee, on the basis of performance evaluation of Independent Directors and taking into account the business knowledge, experience and the substantial contribution made by Mr. Dhananjay Mungale and Ms. Rama Bijapurkar during their tenure, has recommended to the Board that the continued association of Mr. Dhananjay Mungale and Ms. Rama Bijapurkar as Independent Directors of the Company would be beneficial to the Company. Based on the above and the performance evaluation of Independent Directors, the Board recommends the re-appointment of Mr. Dhananjay Mungale and Ms. Rama Bijapurkar, as Independent Directors of the Company, not liable to retire by rotation, to hold office for a second term of 5 (five) consecutive years on the Board of the Company, commencing from 24th July, 2019 to 23rd July, 2024 The Company has received the requisite Notices from Members in writing proposing their appointment as Independent Directors.

Mr. Dhananjay Mungale and Ms. Rama Bijapurkar have given their consent for re-appointment and have confirmed that they continue to retain their status as Independent Directors and that they do not suffer from any disqualifications for appointment.

Mr. Dhananjay Mungale, Ms. Rama Bijapurkar and Mr. V. Ravi are not debarred or disqualified from holding the office of Director by virtue of any SEBI Order or any other such authority, pursuant to circulars dated 20th June, 2018 issued by BSE Limited and the National Stock Exchange of India Limited pertaining to enforcement of SEBI Orders regarding appointment of Directors by the listed companies.

All the Directors of the Company have confirmed that they satisfy the "fit and proper” criteria as prescribed in Chapter XI of RBI Master Direction No. DNBR. PD. 008/ 03.10.119/2016-17 dated 1st September, 201 6 and that they are not disqualified from being appointed/continuing as Directors in terms of Section 164(2) of the Companies Act, 2013.

The details of the Directors being re-appointed are set out in the Notice convening the ensuing AGM.

Key Managerial Personnel

Mr. Ramesh Iyer, Vice-Chairman & Managing Director, Mr. V. Ravi, Executive Director & Chief Financial Officer and Ms. Arnavaz M. Pardiwalla, Company Secretary of the Company have been designated as the Key Managerial Personnel of the Company (KMP) pursuant to the provisions of Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

There has been no change in the KMP during the year under review.

Declaration by Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they fulfill the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and Regulation 16(1)(b) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Directors'' Responsibility Statement

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, ("the Act”) your Directors, based on the representations received from the Operating Management and after due enquiry, confirm that:

i. in the preparation of the annual accounts for financial year ended 31st March, 2019, the applicable accounting standards have been followed and there are no material departures in adoption of these standards.

ii. they have in consultation with the Statutory Auditors selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2019 and of the profit of the Company for the year ended on that date.

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. they have prepared the annual accounts for financial year ended 31st March, 2019 on a going concern basis.

v. they have laid down adequate internal financial controls to be followed by the Company and that such internal financial controls were operating effectively during the financial year ended 31st March, 2019.

vi. they have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively during the financial year ended 31st March, 2019.

Performance Evaluation of the Board

The Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations”) stipulate the evaluation of the performance of the Board, its Committees, Individual Directors and the Chairperson.

The Company has formulated a Policy for performance evaluation of the Independent Directors, the Board, its Committees and other individual Directors which includes criteria for performance evaluation of the Non-Executive Directors and Executive Directors.

The evaluation framework for assessing the performance of Directors comprises of various key areas such as attendance at Board and Committee Meetings, quality of contribution to Board discussions and decisions, strategic insights or inputs regarding future growth of the Company and its performance, ability to challenge views in a constructive manner, knowledge acquired with regard to the Company''s business/ activities, understanding of industry and global trends, etc.

The evaluation involves self-evaluation by the Board Member and subsequent assessment by the Board of Directors. A member of the Board will not participate in the discussion of his/her evaluation.

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of 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 the Directors individually (including Independent Directors).

Feedback was sought by way of well-defined and structured questionnaires covering various aspects of the Board''s functioning such as adequacy of the composition of the Board and its Committees, Board culture, areas of responsibility, execution and performance of specific duties, obligations and governance, compliance, oversight of Company''s subsidiaries, etc., and the evaluation was carried out based on responses received from the Directors.

A separate exercise was carried out by the Nomination and Remuneration Committee of the Board to evaluate the performance of individual Directors who were evaluated on several parameters such as level of engagement and contribution, independence of judgment safeguarding the interest of the Company and its minority shareholders and knowledge acquired with regard to the Company''s business/activities.

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 Directors and NonExecutive Directors.

The performance evaluation of the Independent Directors was carried out by the entire Board excluding the Director being evaluated. Qualitative comments and suggestions of Directors were taken into consideration by the Chairman of the Board and the Chairman of the Nomination and Remuneration Committee. The Directors have expressed their satisfaction with the evaluation process.

Familiarisation Programme for Independent Directors

The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters along with details of number of programmes and number of hours spent by each of the Independent Directors during the Financial Year 2018-19, in terms of the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are available on the website of the Company and can be accessed at the web-link: https:// www.mahindrafinance.com/pdf/Familiarisation Programme for the FY 2018 19.pdf.

Policies on Appointment of Directors and Senior Management and Remuneration of Directors,

Key Managerial Personnel and Employees

i) Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management

In accordance with the provisions of Section 134(3)(e) of the Companies Act, 2013 ("the Act”) read with Section 178(2) of the Act and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has adopted a Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management, which inter alia, includes the criteria for determining qualifications, positive attributes and independence of Directors, identification of persons who are qualified to become Directors and who may be appointed in the Senior Management team, succession planning for Directors and Senior Management, and the Talent Management framework of the Company.

During the year under review, the Board based on the recommendations of the Nomination and Remuneration Committee amended the aforesaid Policy to align it in accordance with the provisions of SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018.

ii) Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel and Employees of the Company

Your Company has also adopted the Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel and Employees of the Company in accordance with the provisions of sub-section (4) of Section 178 of the Act.

During the year under review, your Company made changes in these Policies to align them with the amendments made pursuant to the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, respectively.

The Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel and Employees of the Company, as amended, are appended as “Annexure V-A” and “Annexure V-B”, respectively, and form part of this Report.

The criteria for determining qualifications, positive attributes and independence of a Director and the Remuneration Policies for Directors, Key Managerial Personnel and other employees have been discussed in detail in the Report on Corporate Governance.

AUDITORS

Statutory Auditors

Messrs. B S R & Co. LLP, Chartered Accountants, (ICAI Firm Registration No. 101 248W/W-100022), were appointed as Statutory Auditors of the Company at the Twenty-seventh Annual General Meeting ("AGM”) to hold office for a period of five years, commencing from the conclusion of the 27th AGM held on 24th July, 2017 till the conclusion of the 32nd AGM of the Company to be held in the year 2022, subject to ratification of their appointment by the Members at the AGM, as may be applicable.

Pursuant to the Notification issued by the Ministry of Corporate Affairs on 7th May, 2018 amending Section 139 of the Companies Act, 2013 and the applicable Rules, the mandatory requirement for ratification of appointment of Auditors by the Members at every AGM has been omitted and hence the Company has not proposed ratification of appointment of Messrs. B S R & Co. LLP, Chartered Accountants, at the ensuing AGM.

The Statutory Auditors have given a confirmation to the effect that they are eligible to continue with their appointment and that they have not been disqualified in any manner from continuing as Statutory Auditors. The remuneration payable to the Statutory Auditors shall be determined by the Board of Directors based on the recommendation of the Audit Committee.

The Report given by the Auditors on the Financial Statements of the Company for the Financial Year 2018-19 is a part of the Annual Report. The Report is unmodified and does not contain any qualification, reservation, adverse remark or disclaimer.

The Statutory Auditors were present at the last AGM.

Secretarial Auditor

The Board of Directors of the Company has appointed Messrs. KSR & Co., Company Secretaries LLP to conduct the Secretarial Audit of the Company pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. In accordance with the provisions of sub-section (1) of Section 204, the Secretarial Audit Report for the Financial Year 2018-19 is appended to this Report as “Annexure VI”.

The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

Cost Records and Cost Audit

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable in respect of the business activities carried out by the Company.

Reporting of Frauds by Auditors

During the year under review, the Statutory Auditors and the 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 need to be mentioned in this Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts/arrangements/transactions entered into by the Company during the Financial Year with related parties were in the ordinary course of business and on an arm''s length basis. During the year under review, your Company had not entered into any contract/ arrangement/transaction with Related Parties which could be considered material in accordance with the Policy on Related Party Transactions. Pursuant to Section 134 (3) (h) read with Rule 8 (2) of the Companies (Accounts) Rules, 2014, there are no transactions to be reported under Section 188 (1) of the Companies Act, 2013. Accordingly, the disclosure of Related Party Transactions, as required under Section 134 (3) (h) of the Companies Act, 2013 in Form AOC-2 is not applicable to the Company.

During the year under review, the Board of Directors based on the recommendations of the Audit Committee amended the Policy on Related Party Transactions in line with the revised Listing Regulations and the same is uploaded on the Company''s website at the web-link: https://www.mahindrafinance.com/policies.aspx.

Further details on the transactions with related parties are provided in the accompanying financial statements.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

No material changes and commitments have occurred after the closure of the Financial Year 2018-19 till the date of this Report, which would affect the financial position of your Company.

RISK MANAGEMENT POLICY

Your Company has a comprehensive Risk Management Policy in place and has laid down a well-defined risk management framework to identify, assess and monitor risks and strengthen controls to mitigate risks. Your Company has established procedures to periodically place before the Risk Management Committee and the Board of Directors, the risk assessment and minimisation procedures being followed by the Company and steps taken by it to mitigate these risks.

During the year under review, the Board based on the recommendations of the Risk Management Committee amended the Risk Management Policy which now specifically covers Cyber Security and related risks, in accordance with the amendments under the Listing Regulations.

The Risk Management Policy, inter alia, includes identification therein of elements of risk, including Cyber Security and related risks as well as those risks which in the opinion of the Board may threaten the existence of the Company. The 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.

The development and implementation of Risk Management Policy adopted by the Company is discussed in detail in the Management Discussion and Analysis chapter, which forms part of this Annual Report.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company promotes ethical behaviour in all its business activities and has established a vigil mechanism for its Directors, Employees and Stakeholders associated with the Company to report their genuine concerns. The Vigil Mechanism as envisaged in the Companies Act, 2013 and the Rules prescribed thereunder and the Listing Regulations is implemented through the Whistle Blower 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 per the Whistle Blower Policy implemented by the Company, the Employees, Directors, customers, dealers, vendors, suppliers, or any Stakeholders associated with the Company are free to report illegal or unethical behaviour, actual or suspected fraud or violation of the Company''s Codes of Conduct or Corporate Governance Policies or any improper activity to the Chairman of the Audit Committee of the Company or Chairman of the Company or Convenor of the Corporate Governance Cell.

During the year under review, the Board of Directors based on the recommendation of the Audit Committee has amended the Whistle Blower Policy to inter alia, enable employees to report incidents of leak or suspected leak of unpublished price sensitive information in line with the changes made in the SEBI (Prohibition of Insider Trading) Regulations, 2015.

The Whistle Blower Policy provides for protected disclosure and protection to the Whistle Blower. Under the Whistle Blower Policy, the confidentiality of those reporting violation(s) is protected and they are not subject to any discriminatory practices. Protected disclosures can also be made by sending an email at the designated email id : mmfsl_whistleblower@ mahindra.com.

The Whistle Blower Policy has been appropriately communicated within the Company and is available on the website of your Company at the web-link: https://www.mahindrafinance.com/pdf/MMFSL VigilMechanism.pdf.

No personnel have been denied access to the Audit Committee.

SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES

The Company''s subsidiaries and joint venture continue to contribute to the overall growth in revenues and overall performance of your Company.

A Report on the performance and financial position of each of the subsidiaries and the associate company included in the Consolidated Financial Statements and their contribution to the overall performance of the Company, is provided in Form AOC-1 as Annexure A to the Consolidated Financial Statements and forms part of this Annual Report.

Your Company has formulated a Policy for determining ''Material'' Subsidiaries as defined in Regulation 16 of the Listing Regulations. During the year under review, the Policy was amended in line with the requirements of the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018. This Policy has been hosted on the website of the Company and can be accessed through the web-link: https://www.mahindrafinance.com/policies.aspx.

SUBSIDIARIES

Mahindra Insurance Brokers Limited

During the year under review, Mahindra Insurance Brokers Limited (MIBL), the subsidiary in the business of Direct and Re-insurance Broking, serviced approximately 2.27 million insurance cases, with a total of 22,65,146 cases for both Life and Non-Life Retail business. The customized Life insurance cover "Mahindra Loan Suraksha” (MLS) increased from 6,85,264 lives covered with a Sum Assured of Rs. 21,579.3 Crores in the Financial Year 2017-18 to 8,13,742 lives covered with a Sum Assured of Rs. 27,765.0 Crores in the Financial Year 2018-19. A substantial portion of MLS continues to be covered in the rural markets.

MIBL achieved a growth of 11% in Gross Premium facilitated for the Corporate and Retail business lines, increasing from Rs. 2,049.1 Crores in the Financial Year 2017-18 to Rs. 2,267.8 Crores in the Financial Year 2018-19. The Total Income increased by 32% from Rs. 245.1 Crores in the Financial Year 2017-18 to Rs. 323.4 Crores in the Financial Year 2018-19. The Profit before Tax increased by 24% from Rs. 83.2 Crores to Rs. 102.9 Crores crossing a milestone of Rs. 100 Crores, and the Profit after Tax increased by 33% from Rs. 53.6 Crores to Rs. 71.5 Crores during the same period.

MIBL has been able to reach the benefit of insurance to cover 3,00,000 villages across India.

Mahindra Rural Housing Finance Limited

Mahindra Rural Housing Finance Limited (MRHFL), the Company''s subsidiary in the business of providing loans for purchase, renovation, construction of houses to individuals in the rural and semi-urban areas of the country, registered a total income of Rs. 1,383.9 Crores as compared to Rs. 1,034.8 Crores for the previous year, registering a growth of 34%. Profit before tax was 52% higher at Rs. 366.2 Crores as compared to Rs. 241.2 Crores for the previous year. Profit after tax was 44% higher at Rs. 250.5 Crores as compared to Rs. 173.9 Crores for the previous year.

During the year under review, MRHFL disbursed loans aggregating to Rs. 2,581.1 Crores as against Rs. 2,789.2 Crores in the previous year.

MRHFL continued its focus on serving customers in rural India. Majority of the loans disbursed were to customers in villages with an average annual household income of less than Rs. 2 lakhs. During the year under consideration, MRHFL disbursed home loans to around 1,71,000 households (in addition to around 7,79,000 existing households as on 31st March, 2018). MRHFL has been expanding its geographical presence to provide affordable services for rural households.

During the year under review, operations of MRHFL were strengthened in the States of Maharashtra, Gujarat, Rajasthan, Tamil Nadu, Andhra Pradesh, Telangana, Chhattisgarh, Kerala, Karnataka, Madhya Pradesh, Uttar Pradesh, Uttarakhand and Bihar.

Acquisition of Shareholding of National Housing Bank in MRHFL

In March 2019, your Company approved the acquisition of 1,18,91,511 Equity Shares of Rs. 10 each held by National Housing Bank representing 9.68% of the share capital in MRHFL, at a premium of Rs. 231.16 per share, aggregating to Rs. 286.78 Crores.

Post the acquisition subsequent to the year end, the shareholding of your Company in MRHFL stands increased from 88.75% to 98.43% of MRHFL''s share capital.

Mahindra Asset Management Company Private Limited

Mahindra Asset Management Company Private Limited (MAMCPL), a wholly-owned subsidiary of the Company acts as an Investment Manager for the schemes of Mahindra Mutual Fund. As on 31st March, 2019, MAMCPL was acting as the Investment Manager for nine schemes.

The Assets under Management in these nine schemes were Rs. 4,871 Crores in March 2019 as compared to Rs. 3,352 Crores in March 2018. Of these assets, Rs. 1,449 Crores were in equity schemes in March 2019 as compared to Rs. 1,173 Crores in March 2018. MAMCPL has empanelled more than 11,500 distributors and opened 1,59,399 investor accounts in these schemes recording a rise of more than 25%.

During the year under review, the total income of MAMCPL was Rs.28.1 Crores as compared to Rs. 23.5 Crores for the previous year, registering a growth of 19%. The operations for the year have resulted in a loss of Rs.39.5 Crores as against a loss of Rs.37.5 Crores during the previous year.

Mahindra Trustee Company Private Limited

Mahindra Trustee Company Private Limited (MTCPL), your Company''s wholly-owned subsidiary, acts as the Trustee to Mahindra Mutual Fund.

During the year, MTCPL earned trusteeship fees of Rs. 23.50 lakhs and other income of Rs. 1.10 lakhs as compared to Rs.23.87 lakhs and Rs. 0.83 lakhs respectively, for the previous year. The total expenses for the year were Rs. 25.34 lakhs as against Rs. 24.25 lakhs in the previous year. MTCPL recorded a loss of Rs. 0.83 lakhs for the year under review as against a profit of Rs. 0.44 lakhs in the previous year.

JOINT VENTURE Mahindra Finance USA LLC.

The joint venture company''s disbursement registered a decline of 8.8% to USD 755.11 Million for the year ended 31st March, 2019 as compared to USD 828.38 Million for the previous year.

Total Income grew by 20.58% to USD 67.68 Million for the year ended 31st March, 2019 as compared to USD 56.13 Million for the previous year. Profit before tax was 9.98% higher at USD 18.08 Million as compared to USD 16.44 Million for the previous year. Profit after tax grew at a healthy rate of 41.86% to USD 13.76 Million as compared to USD 9.70 Million in the previous year.

Names of companies which have become or ceased to be subsidiaries, joint ventures or associate companies during the year

During the year under review, no company has become or ceased to be a subsidiary, joint venture or associate of your Company.

Subsequent to the year end, Mahindra Finance CSR Foundation, has been incorporated on 2nd April, 2019 as a wholly-owned subsidiary of the Company registered under Section 8 of the Companies Act, 2013, to promote and support CSR projects and activities.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company, its subsidiaries and its associate(s) for the Financial Year 2018-19, prepared in accordance with the relevant provisions of the Companies Act, 2013 and applicable Indian Accounting Standards along with all relevant documents and the Auditors'' Report form part of this Annual Report.

The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies and associate(s).

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the Financial Statements of the Company, Consolidated Financial Statements along with relevant documents and separate annual accounts in respect of the subsidiaries are available on the website of the Company and can be accessed at the web-link: https://www.mahindrafinance.com/annual-reports. aspx.

The annual accounts of the subsidiaries and related detailed information will also be available for inspection at the Registered Office of the Company during working hours upto the date of the Annual General Meeting.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY''S OPERATIONS IN FUTURE There are no significant and material orders passed by the regulators or courts or tribunals that would impact the going concern status of the Company and its future operations.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Your Company has in place adequate internal financial controls with reference to financial statements, commensurate with the size, scale, and complexity of its operations. Your Company uses various industry-standard systems to enable, empower and engender businesses and also to maintain its Books of Account. The transactional controls built into these systems ensure appropriate segregation of duties, the appropriate level of approval mechanisms and maintenance of supporting records. The systems, Standard Operating Procedures and controls are reviewed by Management. These systems and controls are audited by Internal Audit and their findings and recommendations are reviewed by the Audit Committee and the IT Strategy Committee which ensures the implementation. Review of the internal financial controls environment of the Company was undertaken during the year which covered verification of entity-level control, process level control and IT controls, identification, assessment and definition of key business processes and analysis of risk control matrices, etc. The risk control matrices are reviewed on a yearly basis and control measures are tested and documented on a quarterly basis.

Reasonable Financial Controls are operative for all the business activities of the Company and no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.

Nonetheless your Company recognises that any internal control framework, no matter how well designed, has inherent limitations and accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.

COMPLIANCE WITH THE PROVISIONS OF SECRETARIAL STANDARD - 1 AND SECRETARIAL STANDARD - 2

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

The applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ''Meetings of the Board of Directors'' and ''General Meetings'', respectively, have been duly complied by your Company.

PARTICULARS OF REMUNERATION AND RELATED DISCLOSURES

Disclosures with respect to the remuneration of Directors, Key Managerial Personnel and Employees as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are as under:

Sr.	Disclosure Requirement		Disclosure Details
No.		Name of Director/ KMP	Designation	Ratio of the remuneration of each Director to median remuneration of employees
1.	Ratio of the remuneration of each Director to the median remuneration	Mr. Dhananjay Mungale	Chairman (Independent Director)	11.23X
	of the employees of the Company for the Financial Year 2018-19.	Mr M. G. Bhide**	Independent Director	9.42X
		Mr. Piyush Mankad **	Independent Director	9.05X
		Mr. C. B. Bhave	Independent Director	8.89X
		Ms. Rama Bijapurkar	Independent Director	8.06X
		Mr. V. S. Parthasarathy	Non-Executive Director	NIL*
		Dr. Anish Shah	Non-Executive Director	NIL*
		Mr. Ramesh Iyer	Vice-Chairman & Managing Director	220.22X
		Mr. V. Ravi	Executive Director & Chief Financial Officer	86.70X
		Ms. Arnavaz M. Pardiwalla	Company Secretary & Compliance Officer	24.53X

*Mr. V. S. Parthasarathy and Dr. Anish Shah do not receive any remuneration from the Company.

** resigned as Independent Directors of the Company w.e.f. the close of business hours on 31st March, 2019.

		Disclosure Details
Sr. No. Disclosure Requirement	Name of Director/KMP	Designation	% increase in Remuneration
2. Percentage increase in Remuneration of each Director, Chief Financial Officer	Mr. Dhananjay Mungale	Chairman (Independent Director)	8.96
and Company Secretary during the Financial Year 2018 -19.	Mr. M. G. Bhide**	Independent Director	10.47
	Mr. Piyush Mankad**	Independent Director	10.53
	Mr. C. B. Bhave	Independent Director	12.89
	Ms. Rama Bijapurkar	Independent Director	10.08
	Mr. V. S. Parthasarathy	Non-Executive Director	NIL*
	Dr. Anish Shah	Non-Executive Director	NIL*
	Mr. Ramesh Iyer	Vice-Chairman & Managing Director	19.93
	Mr. V. Ravi	Executive Director & Chief Financial Officer	9.42
	Ms. Arnavaz M. Pardiwalla	Company Secretary & Compliance Officer	33.15

* Mr. V. S. Parthasarathy and Dr. Anish Shah do not receive any remuneration from the Company.

** resigned as Independent Directors of the Company w.e.f. the close of business hours on 31st March, 2019.

3.	Percentage increase in the median Remuneration of employees in the Financial Year 2018-19	50.70% considering employees who were in employment for the whole of the Financial Year 2017-18 and Financial Year 2018-19.
4.	Number of Permanent employees on the rolls of the Company as on 31st March, 2019	21,789

5.	Average percentile increase already made in the salaries of employees other than the Managerial Personnel in the last Financial Year i.e. 201 8-1 9 and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration.	For employees other than Managerial Personnel who were in employment for the whole of the Financial Year 201718 and Financial Year 2018-19, the average increase is 51.75%. Justification: The remuneration of the Vice-Chairman & Managing Director and Executive Director & Chief Financial Officer is decided based on the individual performance, inflation, prevailing industry trends and benchmarks. The remuneration of eligible Non-Executive Directors consists of commission and sitting fees. While deciding the remuneration, various factors such as Director''s participation in Board and Committee Meetings during the year, other responsibilities undertaken, such as Membership or Chairmanship/ Chairpersonship of Committees, etc., were taken into consideration. The increment given to each individual employee is based on the employees'' potential, experience as also their performance and contribution to the Company''s progress over a period of time and also benchmarked against a comparator basket of relevant companies in India.
6.	Affirmation that the remuneration is as per the Remuneration Policy of the Company.	The remuneration paid/payable is as per the Policy on Remuneration of Directors and Remuneration Policy for Key Managerial Personnel and Employees of the Company.

Notes:

1) The remuneration calculated is as per Section 2(78) of the Companies Act, 2013 and includes the perquisite value of Stock Options of the Company exercised during the year.

2) The calculations are based on Employees who were on the rolls of the Company for the whole of the Financial Year 2017-18 and Financial Year 2018-19.

Mr. Ramesh Iyer, Vice-Chairman & Managing Director and Mr. V. Ravi, Executive Director & Chief Financial Officer of the Company do not receive any remuneration or commission from its Holding Company. However, Mr. Iyer has been granted stock options under the Employees'' Stock Option Scheme of the Holding Company, Mahindra & Mahindra Limited. Mr. Iyer has not exercised ESOPs of the Holding Company, during the year, which were granted in the earlier year(s).

During the year under review, Mr. Ramesh Iyer and Mr. V. Ravi have not received any remuneration or commission from any of the subsidiaries of the Company.

During the year, 28,568 Stock Options have been exercised by Mr. Ramesh Iyer and 7,142 Stock Options have been exercised by Mr. V. Ravi, under the Employees'' Stock Option Scheme of Mahindra Rural Housing Finance Limited, the Company''s subsidiary company.

The Company had 16 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.

Details of employee remuneration as required under provisions of Section 197 (12) of the Companies Act, 2013 read with Rule 5 (2) and 5 (3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are available at the Registered

Office of the Company during working hours, 21 days before the Annual General Meeting and shall be made available to any shareholder on request. Such details are also available on your Company''s website and can be accessed at the web-link: https://www. mahindrafinance.com/annual-reports.aspx. None of these employees is a relative of any Director of the Company.

None of the employees holds either by himself/herself or along with his/her spouse or dependent children, more than two per cent of the Equity Shares of the Company.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company is an equal opportunity employer and is committed to ensuring that the work environment at all its locations is conducive to fair, safe and harmonious relations between employees. It strongly believes in upholding the dignity of all its employees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictly prohibited.

The Company has in place an appropriate Policy in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, to prevent sexual harassment of its employees.

All employees (permanent, contractual, temporary and trainees) are covered under this Policy. The Policy has been widely communicated internally and is placed on the Company''s intranet portal. The Company ensures that no employee is disadvantaged by way of gender discrimination.

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee (ICC) under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to redress complaints received regarding sexual harassment.

The following is a summary of Sexual Harassment complaint(s) received and disposed off during the year 2018-19, pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder:

a) Number of complaint(s) of Sexual Harassment received during the year - Nil

b) Number of complaint(s) disposed off during the year - Nil

c) Number of cases pending for more than 90 days -Nil

d) Number of workshops/awareness programmes against sexual harassment carried out - 3 workshops were conducted at the Company''s Corporate Office. Awareness on sexual harassment was carried out to sensitize employees of the Company at branches pan-India.

e) Nature of action taken by the employer or District Officer - Not Applicable.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under sub-section (3) (m) of Section 134 of the Companies Act, 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014 are given as under :

(A) Conservation of Energy

(i) The steps taken or impact on conservation of energy:

The operations of your Company are not energy intensive. However, adequate measures have been initiated to reduce energy consumption.

Select few steps are listed:

a) Replacement of conventional lighting with Light Emitting Diode (LED) lighting:

The Company has installed LED lighting in Regional Offices of the Company during the year under review and the same has been monitored in terms of electrical consumption and expenses.

b) Replacement of old air-conditioning with updated version of machines with R-410A gas, which helps in reducing Ozone depletion.

c) Reduction in water and energy consumption and recycling of waste generation at various locations.

(ii) The steps taken by the Company for utilising alternate sources of energy: Nil.

(iii) The capital investment on energy conservation equipments: Nil.

(B) Technology Absorption

(i) The efforts made towards technology absorption: Not Applicable.

(ii) The benefits derived like product improvement, cost reduction, product development or import substitution: Not

Applicable.

(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year): Not Applicable.

(a) Details of Technology Imported;

(b) Year of Import;

(c) Whether the Technology has been fully absorbed;

(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof.

(iv) Your Company has not incurred any expenditure on Research and Development during the year under review.

(C) Foreign Exchange Earnings and Outgo

The information on foreign exchange outgo is furnished in the Notes to the Accounts. There were no foreign exchange earnings during the year.

For and on behalf of the Board

Dhananjay Mungale

Chairman

Place : Mumbai

Date : 24th April, 2019

---

Mar 31, 2018

Dear Shareholders

The Directors present their Report together with the audited financial statements of your Company for the year ended 31^st March, 2018.

A. FINANCIAL AND OPERATIONAL HIGHLIGHTS

_(Rs. in crores)

Particulars	2018	2017
Revenue from Operations	49,445	47,384
Other Income	1,036	1,345
Profit before Depreciation, Finance Costs, Exceptional items and Taxation	7,259	5,861
Less: Depreciation, Amortisation and Impairment Expenses	1,479	1,526
Profit before Finance Costs, Exceptional items and Taxation	5,780	4,335
Less: Finance Costs	112	160
Profit before Exceptional items and Taxation	5,668	4,175
Add: Exceptional items	434	548
Profit before Taxation	6,102	4,723
Less: Tax Expense	1,746	1,080
Profit for the year	4,356	3,643
Balance of profit for earlier years	21,781	17,905
Less: Transfer to Debenture Redemption Reserve	14	14
Profits available for appropriation	26,123	21,534
Add: Due to Scheme of Arrangement	—	1,092
Add: Other Comprehensive Income/ (Loss) *	8	(3)
Less: Dividend paid on Equity Shares	807	745
Less: Income-tax on Dividend paid	118	96
Balance carried forward	25,206	21,781

* Remeasurement of (loss)/gain (net) on defined benefit plans, recognized as part of retained earnings.

In the year gone by, global growth and trade rebounded sharply and remained the story of the year. Such broad based and strong growth has not been seen since the world''s initial sharp 2010 bounce back, from the financial crisis of 2008-09. In the United States, fiscal policy even turned much more expansive as the Fed continued on its path of interest rate normalization. Other large Central Banks however, continued with their accommodative monetary stance. Global commodity prices, including crude oil, rallied significantly during the year.

On the domestic side, economic activity which flagged for five consecutive quarters, began to recover as several elements started coming together to nurture this nascent acceleration. This started manifesting in estimates and high frequency as well as survey-based indicators. A normal monsoon, record food grains output, strong sales growth by Corporations, depleting finished goods inventories and resilience in several services sectors raised the prospects of sustained economic recovery.

However, even amidst this scenario, your Company recorded an increase of 4.4% in revenue from operations at Rs. 49,445 crores in the year under review as against Rs. 47,384 crores in the previous year.

The Profit for the year before Depreciation, Finance Costs, Exceptional items and Taxation recorded an increase of 23.9% at Rs. 7,259 crores as against Rs. 5,861 crores in the previous year. Profit after tax increased by 19.6% at Rs. 4,356 crores as against Rs. 3,643 crores in the previous year.

Your Company continues with its rigorous cost restructuring exercises and efficiency improvements which have resulted in significant savings through continued focus on cost controls, process efficiencies and product innovations that exceed customer expectations in all areas thereby enabling the Company to maintain profitable growth in the current economic scenario.

No material changes and commitments have occurred after the closure of the Financial Year 2017-18 till the date of this Report, which would affect the financial position of your Company. There has been no change in the nature of business of your Company.

Performance Review

Automotive Sector:

Your Company''s Automotive Sector recorded total sales of 5,48,508 vehicles (4,90,870 four-wheelers and 57,638 three-wheelers) as against a total of 5,06,624 vehicles (4,52,893 four-wheelers and 53,731 three-wheelers) in the previous year, registering a growth of 8.3%.

In the domestic market, your Company sold a total of 5,20,286 vehicles as compared to 4,69,384 vehicles in the previous year, resulting in a growth of 10.8%.

In the Passenger Vehicle segment, your Company sold 2,48,859 vehicles [including 2,33,915 Utility Vehicles (UVs), 14,219 Vans and 725 Cars] registering a growth of 5.4%, as compared to the previous year''s volume of 2,36,130 vehicles [including 2,22,541 UVs, 10,370 Vans and 3,219 Cars].

In the Commercial Vehicle segment, your Company sold 2,16,802 vehicles [including 41,305 vehicles <2T GVW, 1,58,269 vehicles between 2-3.5T GVW, 7,744 LCVs in the LCV > 3.5T segment and 9,484 Heavy Commercial Vehicles (HCVs)] registering a growth of 19.8% over the previous year''s volume of 1,80,948 commercial vehicles [including 30,043 vehicles < 2T GVW, 1,36,564 vehicles between 2-3.5T GVW, 7,626 LCVs in the LCV > 3.5T segment and 6,715 HCVs].

In the Three-Wheeler segment, your Company sold 54,625 three wheelers, registering a growth of 4.4% over the previous year''s volume of 52,306 three wheelers.

For the year under review, the Indian automotive industry (except 2W) grew 11.9%, with the Passenger Vehicle (PV) industry growth of 7.9% and Commercial Vehicle (CV) industry growth of 19.9%. Three industry sub-segments where your Company has an active presence, posted very robust growth. These are Utility Vehicles (UV) which grew 21%, LCV Goods < 3.5T at 29.8% and MHCV Goods at 19.4%.

Your Company''s UV volume grew 5.1% to 2,33,915 units. The UV market share for your Company stood at 25.4% as against 29.2% in the previous year. Scorpio continues to strengthen its iconic status and recorded the highest ever sales with a volume of 53,934 units in Financial Year 2018. Bolero has been a very successful brand for your Company over the last 10 years, and for the year under review, Bolero along with the all New Bolero Power , posted combined sales of 85,386 units. Your Company strengthened the UV portfolio with the launch of the ''KUV100 NXT'' in October, 2017, the ''All Powerful Scorpio'' in November, 2017 and the ''Plush New XUV500'' in April, 2018.

Your Company is the pioneer for Electric Vehicles (EVs) in India, and for the year under review, sold [along with its subsidiary Mahindra Electric Mobility Limited] 4,026 EVs (1,094 four wheelers and 2,932 three wheelers) as against 1,021 EVs in the previous year. This growth is supported by the Government''s thrust on adopting EVs and your Company''s efforts of working with various stakeholders, especially fleet operators.

In the LCV<3.5T segment, your Company retained the No. 1 position with a 47.4% market share. Your Company sold a total of 1,99,544 vehicles in this segment, which is a growth of 19.8% over the previous year. The LCV<3.5T segment has two sub segments viz. LCV<2T and LCV 2-3.5T, which is the Pik-UP segment. Your Company has a market share of 25% and 61.9% in the two sub segments respectively.

In the HCV segment, your Company sold 9,484 trucks as against 6,715 trucks in the previous year. This is a growth of 41.2%. The growth is driven by good product performance, improved service reach and spares availability. The Blazo series of trucks which are backed by guarantees on mileage and service are instrumental in building brand and growing sales. Your Company''s market share in the HCV segment stands at 4.5%.

During the year under review, your Company posted an export volume of 28,222 vehicles as against the previous year''s record exports of 37,240 vehicles. This is a de-growth of 24.2%. This de-growth is principally due to adverse business and regulatory environment in key markets of Nepal and Sri Lanka. Sales in Africa grew 13%.

The spare parts sales for the year stood at Rs. 2,083.8 crores (including Exports of Rs. 193.4 crores) as compared to Rs. 1,937.2 crores (including Exports of Rs. 115.6 crores) in the previous year, registering a growth of 7.6%.

Farm Equipment Sector

Your Company''s Farm Equipment Sector recorded total sales of 3,17,531 tractors as against 2,63,177 tractors sold in the previous year thus recording a growth of 20.7%.

For the year under review, the tractor industry in India recorded sales of 7,09,308 tractors, a growth of 21.9%. Second consecutive year of normal monsoon, increase in MSPs and Government''s thrust on Agriculture and rural development, helped drive the positive sentiment in the Agriculture Sector and the rural economy at large.

In the domestic market, your Company sold 3,02,082 tractors, as compared to 2,48,594 tractors in the previous year, recording a growth of 21.5%. In a very competitive industry, your Company continued its market leadership for the 35^th consecutive year, with a market share at 42.6%.

Your Company''s growth was driven by good performance of all products under the Mahindra and Swaraj Brands. The new product trio of Mahindra NOVO, YUVO and JIVO have helped build the ''technology leadership'' image for the Company. JIVO which was launched in Financial Year 2018, proved to be an ideal choice for farmers in the fast growing orchard and horticulture space.

For the year under review, Swaraj Division of your Company, launched the Swaraj 963 in the 60 HP segment. The Swaraj 963 and its variants, will help grow volume in the higher HP segment.

Further, your Company had developed and demonstrated technology for driverless tractors. First phase of this technology will be made available in the market in the Financial Year 2019. With this, your Company would take another pioneering step to revolutionize farming in India.

For the year under review, your Company exported 15,449 tractors registering a growth of 5.9% over the previous year. This is the highest ever tractor exports from India by your Company. There was growth in exports to USA and neighboring countries.

Your Company continued to strengthen its global footprint by further expanding into Turkey, through the acquisition of Erkunt Traktor Sanayii A.S. (Erkunt), the 4^th largest tractor brand in Turkey. This is the second acquisition by your Company in Turkey after Hisarlar which is a farm equipment company.

Spare parts net sales for the year stood at Rs. 605.3 crores (including exports of Rs. 52.9 crores) as compared to Rs. 534.4 crores (including exports of Rs. 43.8 crores) in the previous year, registering a growth of 13.3%.

Other Businesses Mahindra Powerol

Under the Mahindra Powerol Brand, your Company has been a leader in providing power back-up solutions to the telecom industry for past 11 years. With a focus on changing customer needs, your Company has further expanded the business in Tele infra management and in the energy management solutions space.

In the retail genset business, your Company is the No. 2 brand by volume, and for the year under review, expanded the product range with the launch of gensets in the higher KVA range.

Construction Equipment Business

For the year under review, your Company (under the Mahindra Earth Master brand) sold 1,229 Backhoe Loaders (BHLs) against 1,025 in Financial Year 2017, which is a growth of 19.9%. With an uptick in infrastructure spending, the BHL market in India grew 23.5% over the previous year. Your Company ranks 4^th in the BHL industry.

Your Company forayed into fast growing road construction equipment business with the launch of Motor Grader –Road Master G75, in October, 2017. Your Company sold 164 motor graders in Financial Year 2018.

Two-Wheeler Business

During the year under review, the two-wheeler business of Mahindra Two Wheelers Limited was demerged into your Company. For the Financial Year 2017-18, your Company sold 32,661 two-wheelers (including 17,912 exports).

Transitioning to Goods and Services Tax

Effective 1^st July, 2017, India introduced the landmark tax reform with initiation of the Goods and Services Tax (GST) regime. All businesses of your Company, made a timely and seamless transition to the new GST system.

Current Year''s review

During the period 1^st April, 2018 to 28^th May, 2018, 72,813 vehicles were produced as against 62,615 vehicles and 67,244 vehicles were dispatched as against 59,361 vehicles during the corresponding period in the last year. During the same period 56,961 tractors were produced and 57,290 tractors dispatched as against 48,499 tractors produced and 48,210 tractors dispatched during the corresponding period in the previous year.

Economic activity is expected to gather pace in Financial Year 2019 as the transitory effects of implementation of the Goods and Service Tax (GST) recede. The Reserve Bank of India (RBI) projects India''s GDP growth to strengthen from 6.6 per cent in 2017-18 to 7.4 per cent in Financial Year 2019. The step-up in growth outlook is likely to be driven by a revival of investment on the demand side and manufacturing on the supply side. Credit off-take has also improved and is becoming increasingly broad-based, which augurs well for the underlying economic activity.

This outlook will also be lifted by tailwinds from normal rainfall with the weather bureau forecasting a ''normal'' monsoon for the third successive year in its first stage long range forecast. While the spatial and temporal distribution remain to be seen, well spread out rainfall is likely to have a salutary impact on the overall demand conditions. Moreover, the thrust on rural and infrastructure sectors imparted through the Union Budget could further help rejuvenate rural demand and also crowd in private investment.

Global growth backdrop too remains benign with a synchronized cyclical rebound. A boost to US investment demand from corporate tax cuts, strong activity in the Euro area supported by accommodative monetary policy and improvement in growth prospects of Emerging Market Economies (EMEs) have been supportive of this rebound thus far. However, escalation in trade frictions and protectionist policies, abrupt changes in the pace and timing of normalization of monetary policy of developed country central banks and higher crude oil prices could pose downside risks to global trade and demand growth.

Finance

Financial Year 2017-18 saw the broadest synchronized global growth since the financial crisis. World economy grew at 3.8% in 2017 up from 3.2% in 2016, on the back of growth in trade, pickup in investment particularly among advanced economies. US economy grew at a robust pace and is expected to continue on the back of tax reforms and associated fiscal stimulus. US Federal Reserve hiked interest rates by a cumulative of 75 bps during the Financial Year. Eurozone also saw a rebound in business sentiment and investments with still accommodative monetary policy, political uncertainties largely sorted and Brexit negotiations making progress. Despite some slowdown recently, Japan recorded eight consecutive quarters of growth up to December, 2017.

Economic activity also continued to expand in major emerging market economies such as Brazil, Russia and South Africa -driven by higher crude and commodity prices. China witnessed slight slowdown as it transitions from an export-driven to a domestic demand driven growth model, and saw a rating downgrade with warnings on its excessive debt levels.

The latest World Economic Outlook by IMF predicts global growth to pick up to 3.9% in 2018 supported by strong momentum, favorable market sentiment, accommodative financial conditions, and the domestic and international repercussions of expansionary fiscal policy in the United States. The key risks to the optimistic outlook are rising trade protectionism and geo-political uncertainties especially in the Middle-East.

On the domestic front the year began on a jubilant note with the Union Budget giving a strong thrust to the rural economy and a normal monsoon after two years of deficient rainfall. The much awaited Goods and Services Tax (GST) was rolled out on 1^st July, 2017, replacing multiple taxes levied by Governments. Economic activity accelerated as is evident from high frequency indicators such as strong retail sales, depleting finished goods inventories and green shoots of renewal of capex cycle.

On the other hand, financial markets saw volatility on the back of US Fed tightening and rising crude prices. In addition, Banking Sector was also fraught with non-performing assets and frauds.

Indian Rupee which appreciated till the early part of January, 2018 on buoyant capital inflows, started depreciating subsequently over concerns of the impact of higher crude oil prices on India''s trade deficit and closed the year at Rs. 65.18 per USD.

CPI inflation remained benign during the first half of Financial Year 2018 which led to the Reserve Bank of India (RBI) to ease policy rates by 25 bps. However, inflation gradually started inching up in the second half of the year due to unfavorable base effect and rise in food and fuel inflation. Going forward there are various uncertainties on the inflation outlook primarily on account of impact of HRA increases by various State Governments, increase in MSP in Union Budget 2018, rising fuel and commodity prices and normalization of monetary policy by major advanced economies. Systemic liquidity, which had remained in surplus since demonetization, turned into deficit towards close of the year. Consequently, even though RBI remained in a pause mode since August, 2017, bond markets experienced rise in yields due to drying liquidity, concerns about inflation and the fiscal situation.

Your Company continued to focus on managing cash efficiently and ensured that it had adequate liquidity and back up lines of credit. During the year, your Company repaid Rs. 80.69 crores of long term borrowings from internal accruals.

During the year, your Company also availed short term export finance. As on 31^st March, 2018, Rs. 668 crores of export finance was outstanding, out of which Rs. 365 crores was under the interest equalization scheme of Government of India.

The Company''s Bankers continue to rate your Company as a prime customer and extend facilities/services at prime rates. Your Company follows a prudent financial policy and aims not to exceed an optimum financial gearing at any time. The Company''s total Debt to Equity Ratio was 0.10 as at 31^st March, 2018.

Your Company has been rated by CRISIL Limited (CRISIL), ICRA Limited (ICRA), India Ratings and Research Private Limited (India Ratings) and CARE Ratings Limited (CARE) for its Banking facilities. All have re-affirmed the highest credit rating for your Company''s Short Term facilities. For Long Term facilities and Non-Convertible Debenture (NCD) programme, CRISIL,

ICRA and India Ratings have re-affirmed their credit ratings of CRISIL AAA/Stable, [ICRA]AAA (stable) and IND AAA/Stable for the respective facilities rated by them. With the above rating affirmations, your Company continues to enjoy the highest level of rating from all major rating agencies at the same time.

The AAA ratings indicate highest degree of safety regarding timely servicing of financial obligations and is also a vote of confidence reposed in your Company''s Management by the rating agencies. It is an acknowledgement of the strong credit profile of your Company over the years, resilience in earnings despite cyclical upturns/downturns, robust financial flexibility arising from the significant market value of its holdings and prudent management.

Investor Relations (IR)

Your Company continuously strives for excellence in its IR engagement with International and Domestic investors and has set up feedback mechanism to measure IR effectiveness. Structured conference calls and periodic investor/analyst interactions including one-on-one meeting, participation in investor conferences, quarterly earnings calls and annual analyst meet with the Chairman, Managing Director and Business Heads were organized during the year.

Your Company interacted with around 670 Indian and overseas investors and analysts (excluding quarterly earnings calls and specific event related calls) during the year. Your Company always believes in leading from the front with emerging best practices in IR and building a relationship of mutual understanding with investor/analysts. As a key milestone in this continuing Endeavour, your Company created a digital interactive annual review of the Company''s performance on the Corporate website to provide an interactive experience beyond what is available in the Annual Report. The Company had created its first Integrated Report (for Financial Year 2017). Your Company also continues to organize con-call on Environment, Social and Corporate Governance (ESG) for analysts and investors, which has received excellent feedback from investors and ESG analysts for this pioneering initiative.

Your Company ensures that critical information about the Company is available to all the investors by uploading all such information at the Company''s website. Your Company has created a ''Group Investor Relations Council'' to share best practices across all the listed group companies and learn from each other.

Issue of Shares

(a) Scheme of Arrangement between Mahindra Two Wheelers Limited and Mahindra and Mahindra Limited and their respective Shareholders and Creditors (Scheme)

Your Company on 8^th November, 2017 allotted 5,03,888 Ordinary (Equity) Shares of Rs. 5 each to the Shareholders of Mahindra Two Wheelers Limited (other than the Company) pursuant to the Scheme.

(b) Bonus Shares

Pursuant to the recommendation of the Board of Directors at its Meeting held on 10^th November, 2017 and approval of the Members of the Company through a Postal Ballot, the Results of which were declared on 16^th December, 2017, your Company has on 26^th December, 2017 allotted 62,15,96,272 Ordinary (Equity) Shares of Rs. 5 each as fully paid-up Bonus Shares in the ratio of one Bonus Share for every one existing Equity Share of the Company held by the Shareholders as on the Record Date i.e. 23^rd December, 2017.

Consequently, the paid-up Equity Share Capital of the Company increased to Rs. 621,59,62,720 divided into 124,31,92,544 Ordinary (Equity) Shares of Rs. 5 each, fully paid-up.

Dividend

Your Directors are pleased to recommend a dividend of Rs. 7.50 per Ordinary (Equity) Share of the face value of Rs. 5 each on the enhanced Share Capital, payable to those Shareholders whose names appear in the Register of Members as on the Book Closure Date. The equity dividend outgo for the Financial Year 2017-18, inclusive of tax on distributed profits (after reducing the tax on distributed profits of Rs. 69.52 crores on the dividends declared by subsidiaries as of the date of this report and receivable during the current Financial Year 2018-19) would absorb a sum of Rs. 1,054.53 crores [as against Rs. 927.62 crores comprising the dividend of Rs. 13 per Ordinary (Equity) Share of the face value of Rs. 5 each and tax thereon paid for the previous year]. Further, the Board of your Company decided not to transfer any amount to the General Reserve for the year under review.

The dividend pay-out is in accordance with the Company''s Dividend Distribution Policy.

Dividend Distribution Policy

The Dividend Distribution Policy containing the requirements mentioned in Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached as Annexure I and forms part of this Annual Report.

B. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company, its subsidiaries, associates and joint ventures prepared in accordance with the Companies Act, 2013 and applicable Indian Accounting Standards along with all relevant documents and the Auditors'' Report form part of this Annual Report. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies, associates and joint ventures.

The Financial Statements as stated above are also available on the website of the Company and can be accessed at the Web-link: http://www.mahindra.com/resources/investor-reports/ FY18/Annual Reports/Links-AnnualReport.zip

Subsidiary, Joint Venture and Associate Companies

The Mahindra Group Companies continue to contribute to the overall growth in revenues and overall performance of your Company.

Tech Mahindra Limited, Flagship Company in the IT Sector, has reported a consolidated revenue of Rs. 30,773 crores in the current year as compared to Rs. 29,141 crores in the previous year, an increase of 6%. Its consolidated profit after tax is Rs. 3,800 crores as compared to Rs. 2,813 crores in the previous year, an increase of 35%.

The Group''s finance company, Mahindra & Mahindra Financial Services Limited (Mahindra Finance), reported a consolidated operating income of Rs. 8,533 crores during the current year as compared to Rs. 7,146 crores in the previous year, a growth of 19%. The consolidated profit after tax for the year is Rs. 1,024 crores as compared to Rs. 512 crores in the previous year.

Mahindra Finance financials is as per Indian Generally Accepted Accounting Principles (IGAAP).

Mahindra Life space Developers Limited, the subsidiary in the business of real estate and infrastructure registered a consolidated operating income of Rs. 566 crores as compared to Rs. 762 crores in the previous year. The consolidated profit after tax for the year is Rs. 101 crores as compared to Rs. 102 crores in the previous year.

Mahindra Holidays & Resorts India Limited, the subsidiary in the business of timeshare registered a consolidated operating income of Rs. 2,317 crores as compared to Rs. 2,267 crores in the previous year, an increase of 2%. The consolidated profit after tax for the year is Rs. 132 crores as compared to Rs. 149 crores in the previous year.

Mahindra Logistics Limited, a listed subsidiary in the logistics business has registered a consolidated operating income of Rs. 3,416 crores as compared to Rs. 2,667 crores in the previous year, an increase of 28%. The consolidated profit after tax for the year is Rs. 64 crores as compared to Rs. 46 crores in the previous year, an increase of 39%.

Ssyangyong Motor Company, the Korean subsidiary of the Company has reported consolidated revenues of Rs. 20,435 crores in the current fiscal year as compared to Rs. 21,153 crores in the previous year. The consolidated loss for the year is Rs. 502 crores as compared to consolidated profit after tax of Rs. 245 crores in the previous year.

The consolidated group profit before exceptional item and tax for the year is Rs. 6,590 crores as against Rs. 5,004 crores in the previous year - a growth of 32%. The consolidated profit after tax after non-controlling interest and exceptional items for the year is Rs. 7,510 crores as against Rs. 3,698 crores in the previous year.

During the year under review, Mahindra Automotive North America Inc., Merakisan Private Limited, Mahindra Vehicle Sales and Services Inc., Mahindra Waste Energy Solutions Limited, Mahindra Telecom Energy Management Services Limited, Mahindra Happinest Developers Private Limited, Mahindra Fresh Fruits Distribution Holding Company (Europe) B.V., Erkunt Traktor Sanayii A.S., Erkunt Sanayi A.S., Deep Mangal Developers Private Limited, Moonshine Construction Private Limited, Mahindra Construction Company Limited, Visionsbolaget 12191 AB and Visionsbolaget 12192 AB became subsidiaries of your Company.

During the year under review, Mahindra Yueda (Yancheng) Tractor Company Limited, Defence Land Systems India Limited, Raigad Industrial & Business Park Limited, Mahindra Telecommunications Investment Private Limited, Gateway Housing Company Limited and Visionsbolaget 12192 AB ceased to be subsidiaries of your Company.

Subsequent to the year end, Mahindra Susten Bangladesh Private Limited and Blitz 18-371 GmbH became subsidiaries of your Company and Gipp Aero Investments Pty Limited and Aerostaff Australia Pty Limited ceased to be subsidiaries of your Company.

Pursuant to the Ministry of Corporate Affairs Notification dated 7^th May, 2018, the amendment to the definition of "subsidiary company" was made effective and thereby

Mahindra Knowledge Park Mohali Limited became a subsidiary of your Company and Merakisan Private Limited ceased to be a subsidiary of your Company.

During the year under review, Mahindra Waste Energy Solutions Limited changed its name to Mahindra Waste To Energy Solutions Limited, Mahindra Gujarat Tractor Limited changed its name to Gromax Agri Equipment Limited, Mahindra Suryaurja Private Limited changed its name to Mega Suryaurja Private Limited and Visionsbolaget 12191 AB changed its name to Are Villa 3 AB.

During the year under review, Mahindra Happinest Developers Private Limited and Mahindra Defence Naval Systems Private Limited were converted into Public Limited Companies and accordingly, their names were changed to Mahindra Happinest Developers Limited and Mahindra Defence Naval Systems Limited.

Subsequent to the year end, Mahindra Retail Private Limited was converted into a Public Limited Company and accordingly changed its name to Mahindra Retail Limited. Further, Blitz 18-371 GmbH changed its name to Automobile Pininfarina GmbH and Industrial Cluster Private Limited changed its name to Mahindra Industrial Park Private Limited.

During the year under review, M.I.T.R.A Agro Equipments Private Limited, ZoomCar Inc, Carnot Technologies Private Limited and Resfeber Labs Private Limited became Associates of your Company and subsequent to the year end, Merakisan Private Limited became Associate of your Company.

A Report on the performance and financial position of each of the subsidiaries, associates and joint venture companies included in the Consolidated Financial Statement and their contribution to the overall performance of the Company, is provided in Form AOC-1 and forms part of this Annual Report.

The Policy for determining material subsidiaries as approved by the Board is uploaded on the Company''s website and can be accessed at the Web-link: http://www.mahindra.com/resources/ investor-reports/FY18/Annual Reports/Links-AnnualReport.zip

C. JOINT VENTURES, ACQUISITIONS AND OTHER MATTERS

Demerger of Two-Wheeler Business of Mahindra Two Wheelers Limited (MTWL) into your Company

MTWL, a step down subsidiary of your Company, has been engaged in the businesses of design, manufacture, sales and service of two wheelers (Two-Wheeler Business) and also trading in spares and accessories for two wheelers. A Scheme of Arrangement between MTWL and your Company and their respective Shareholders and Creditors (Scheme) was announced by your Company to demerge the Two Wheeler Business into your Company. The appointed date of the Scheme was 1^st October, 2016. The National Company Law Tribunal approved the Scheme and the Scheme has been made effective from 25^th October, 2017.

In accordance with the Scheme, your Company has allotted 4,63,287 Ordinary (Equity) Shares of Rs. 5 each to Aay Kay Global and 40,601 Ordinary (Equity) Shares of Rs. 5 each to Emerging India Fund, the Shareholders of MTWL, in the share exchange ratio of 1 fully paid-up Ordinary (Equity) Share of Rs. 5 each of the Company for every 461 fully paid-up shares held in MTWL.

Divestment of 87,211 Equity Shares of Swaraj Engines Limited in the Buy-back offer

During this year, Swaraj Engines Limited (SEL), an associate company of your Company, had come up with a Buy-Back Offer (Offer). Your Company successfully offered 87,211 Equity Shares of SEL in the Offer. Your Company booked a profit of approximately Rs. 21 crores in the process. Following this Offer, the shareholding of your Company has marginally increased from 33.22% to 33.31% of SEL''s share capital.

Sale of 64,50,000 shares representing 5% of the total share capital of CIE Automotive S.A

During the year, Mahindra Overseas Investment Company (Mauritius) Limited (MOICML), a wholly owned subsidiary of the Company, executed a sale of 64,50,000 shares representing 5% of the share capital of CIE Automotive S.A at a price of Euro 23.5 per share, aggregating to Euro 151.58 million on the Spanish Stock Exchange. The post-tax capital gains booked by MOICML is Euro 91.4 million.

Post the sale, MOICML''s shareholding in CIE Automotive S.A has come down to 7.435% of its share capital. This transaction has facilitated diversification of the investor base of CIE Automotive S.A.

Scheme of Amalgamation between Defence Land Systems India Limited (Transferor Company) and Mahindra Defence Systems Limited (Transferee Company) and their respective Shareholders and Creditors (Scheme)

The National Company Law Tribunal has approved the Scheme vide its order dated 5^th October, 2017. The appointed date of the Scheme is 1^st January, 2017 and the Scheme is effective from 18^th October, 2017.

Initial Public Offer of Mahindra Logistics Limited

During this year, Mahindra Logistics Limited (MLL), a subsidiary of your Company, successfully completed an Initial Public Offer (IPO) with an issue size of Rs. 829 crores. As a part of this IPO, your Company sold 96,66,173 Equity Shares of MLL, amounting to 13.6% stake. The offer was oversubscribed nearly by 8 times and the allotment took place at the upper end of the price band of Rs. 425-429 per share. The Equity Shares of MLL got listed on BSE Limited and National Stock Exchange of India Limited (NSE) on 10^th November, 2017.

This was the largest IPO from your Company till date and as a result of this secondary sale during the IPO, your Company has realized gross proceeds of Rs. 414 crores and booked profit of Rs. 386 crores, thereby unlocking substantial value creation for the shareholders. Your Company''s shareholding in MLL stood at 58.8% on completion of the IPO. The Equity Shares of MLL traded at closing price of Rs. 484.80 per share on NSE on the last trading day of the fiscal year ended on 31^st March, 2018.

Consolidation of Smart shift and Porter

Orizonte Business Solutions Limited (Smart shift) is a step down subsidiary of your Company which owns and operates a technology enabled load exchange marketplace platform for matching the needs of cargo owners with transporters. Mahindra Trucks & Buses Limited (MTBL), a wholly owned subsidiary of your Company held a 10.37% stake on a fully diluted basis in Resfeber Labs Private Limited (Porter) which is a similar business to that of Smart shift. To leverage synergies and obtain greater economies of scale for both businesses, your Company agreed to a Scheme to merge Smart shift and Porter.

As a part of this strategy, on 23^rd February, 2018, your Company executed a Share Subscription Agreement and Shareholders Agreement which entailed a commitment to merge Smart shift with Porter through a Scheme of Merger and make an investment of approximately Rs. 65 crores in Porter and Smart shift. As on date, your Company has made the aforesaid investment in Smart shift and Porter. Additionally, the aforementioned Scheme of Merger was also approved by the Board of Directors of Smart shift and Porter and was filed before the National Company Law Tribunal (NCLT), Mumbai Bench on 5^th April, 2018. Pursuant to the merger, which is subject to the NCLT approval, Smart shift will cease to be a subsidiary of the Company.

Post merger, the shareholding of your Company and its subsidiaries in Porter (the combined entity) taken on a fully diluted basis would be 30.9% for the Company, 2.5% for Mahindra & Mahindra Financial Services Limited and 7% for MTBL.

Investment in Zoomcar

Your Company has been keen to invest in the shared mobility space as part of its strategy to promote and participate in sustainable mobility solutions, including multi modal urban mobility, with the objective of enabling improved livelihoods and lifestyles of people enabling them to RISE. As a part of your Company''s strategy of promoting Electric Vehicles and shared mobility, your Company invested in Zoomcar India Private Limited (Zoomcar India) which is a leading self-drive car rental company based out of Bangalore, India and had been 100% owned by Zoomcar Inc., a holding company incorporated in the USA. Your Company subscribed to Compulsory Convertible Preference Shares (CCPS) of Zoomcar India, which on an as-converted to Equity Share basis, would result in the Company holding about 11.6% of the Equity Share Capital of Zoomcar India on a fully diluted basis. Subject to receipt of regulatory approvals, the Company shall exchange its CCPS holding of Zoomcar India for Preferred Stock of Zoomcar Inc. at a future date. Mahindra Overseas Investment Company (Mauritius) Limited (MOICML), a wholly owned subsidiary of the Company, has also invested in Zoomcar Inc.

The effect of this investment, by your Company and MOICML, on an aggregate as-converted to common stock of Zoomcar Inc. basis would result in your Company and MOICML together holding approximately 16% of the Common Stock of Zoomcar Inc. on a fully diluted basis.

Exploration of Strategic Co-operation with Ford

During the year, your Company announced its intent of exploring a strategic alliance with Ford Motor Company (Ford) which is designed to leverage the benefits of Ford''s global reach and expertise and your Company''s scale in India and its successful operational model to allow each company to leverage the others'' strengths during a period of unprecedented transformation in the global automotive industry. To that end the Company signed several MOUs with Ford during the year which included an overall co-operation plan agreement and the others being in specific areas of connected vehicle projects, battery electric vehicle, power trains and product development of mid-size and compact SUV.

Acquisition of Erkunt Traktor Sanayii A.S. and Erkunt Sanayi A.S.

During the year, your Company strengthened its presence in Turkey by acquiring Erkunt Traktor Sanayii A.S. (Erkunt Tractor) and Erkunt Sanayi A.S. (Erkunt Sanayi). Erkunt Tractor is the 4^th largest tractor company in Turkey, and Erkunt Sanayi is a leading casting and machining company catering to tractor and other industrial machinery. Mahindra Overseas Investment Company (Mauritius) Limited, a wholly owned subsidiary of your Company, acquired 100% of Erkunt Tractor and 98.7% of Erkunt Sanayi, for approximately Rs. 450 crores. These acquisitions, along with investment in Hisarlar Makina in Financial Year 2017, provide a strong base for your Company to participate in the Turkish agri-machinery market which is among the largest globally.

Investment in M.I.T.R.A. Agro Equipment Private Limited

Your Company invested Rs. 8 crores in Equity Shares of M.I.T.R.A Agro Equipment Private Limited (MITRA) during the year. MITRA is an Indian agri-machinery company, specialising in equipment such as sprayers for horticulture. Your Company now has a 26% equity stake, on fully diluted basis, in MITRA. The partnership with MITRA will enable your Company to expand and strengthen its presence in the horticulture segment which is fast growing.

Investment in Carnot Technologies Private Limited

During the year, your Company invested approximately Rs. 6.1 crores in Carnot Technologies Private Limited (Carnot), a startup founded in 2015 by purchasing existing Equity Shares and subscribing to Series A Convertible Preference Shares. Your Company now owns approximately 23% of the fully diluted equity capital of Carnot. Carnot provides Internet of Things (IoT) products and solutions for automobiles currently and your Company intends to partner with Carnot to develop innovative technology solutions and accessories to supplement and enhance the value of its product and service offerings across segments.

Launch of ROXOR by Group company MANA in the US

Mahindra Automotive North America (MANA), a second level subsidiary of your Company launched ROXOR, a new Off-Road vehicle in the power sports segment in March, 2018. ROXOR was conceived, designed, engineered and is being produced in Metro Detroit by MANA which recently opened a new North American Automotive Headquarter and manufacturing center in the US.

Waste to Energy Solutions

During the year, your Company incorporated Mahindra Waste To Energy Solutions Limited (MWESL) as a new subsidiary to carry out activities in relation to conversion of organic wastes to energy. Currently there are multiple locations across India where projects at different operational stages are being executed. In February, 2018, MWESL executed an MOU with Indraprastha Gas Limited (IGL) for providing sustainable solutions to waste management and stubble burning through design and development of bio-gas plants which will use agro and other organic waste in the region where IGL operates.

Merger of Mahindra Telecommunications Investment Private Limited and Gateway Housing Company Limited (Transferor Companies) with Mahindra Holdings Limited (Transferee Company) and their respective Shareholders (Scheme)

The National Company Law Tribunal has approved the Scheme vide its order dated 4^th January, 2018. The appointed date of the Scheme is 1^st April, 2016 and the Scheme is effective from 27^th February, 2018.

Capital Raising by Mahindra & Mahindra Financial Services Limited, a listed subsidiary of your Company

During the year under review, Mahindra & Mahindra Financial Services Limited (MMFSL), a listed subsidiary of your Company had received the approval of its shareholders to issue up to 2.5 crores shares by way of Preferential Allotment to your Company and up to 2.4 crores shares by way of Qualified Institutions Placement (QIP). MMFSL had successfully raised a total of Rs. 2,111 crores through the above issuances made to both the Company (Rs. 1,055 crores) and a mix of domestic and international qualified institutional bidders (Rs. 1,056 crores).

With your Company maintaining majority shareholding of 51.19%, MMFSL continues to benefit by leveraging the financial and operational synergies with the Company and with the simultaneous QIP issuance, it has been able to diversify its investor base. MMFSL''s Capital Adequacy has strengthened with this capital raise. It further enables MMFSL to augment its long term resources to enable it to meet its business growth and funding requirements as well as meet the investment required to be made in its subsidiaries and joint ventures.

D. INTERNAL FINANCIAL CONTROLS

The Corporate Governance Policies guide the conduct of affairs of your 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.

Your Company''s Financial Statements are prepared on the basis of the Significant Accounting Policies that are carefully selected by Management and approved by the Audit Committee and the Board. These Accounting policies are reviewed and updated from time to time.

Your Company uses SAP ERP Systems as a business enabler and to maintain its Books of Account. The transactional controls built into the SAP ERP systems ensure appropriate segregation of duties, appropriate level of approval mechanisms and maintenance of supporting records. The Information Management Policy reinforces the control environment. The systems, Standard Operating Procedures and controls are reviewed by Management. These systems and controls are audited by Internal Audit and their findings and recommendations are reviewed by the Audit Committee which ensures the implementation.

Your Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations. This year your Company''s Internal Financial Controls were deployed through Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), that addresses material risks in your Company''s operations and financial reporting objectives.

Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by The Institute of Chartered Accountants of India. Based on the results of such assessments carried out by Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.

Your Company recognizes Internal Financial Controls cannot provide absolute assurance of achieving financial, operational and compliance reporting objectives because of its inherent limitations. Also, projections of any evaluation of the Internal Financial Controls to future periods are subject to the risk that the Internal Financial Control may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.

E. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of your Company''s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

F. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All Related Party Transactions entered during the year were in the ordinary course of business and on arms length basis. During the year under review, your Company had entered into Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, with Mahindra Vehicle Manufacturers Limited, a wholly owned subsidiary of your Company. These transactions too were in the ordinary course of business of your Company and were on arms length basis, details of which, as required to be provided under section 134(3)(h) of the Companies Act, 2013 are disclosed in Form AOC-2 as Annexure II and forms part of this Annual Report.

The Policy on Materiality of and Dealing with Related Party Transactions as approved by the Board is uploaded on the Company''s website and can be accessed at the Web-link: http://www.mahindra.com/resources/investor-reports/FY18/ Annual Reports/Links-AnnualReport.zip

G. AUDITORS

Statutory Auditors and Auditors'' Report

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 71^st Annual General Meeting (AGM) held on 4^th August, 2017 until the conclusion of the 76^th AGM of the Company to be held in the year 2022.

Pursuant to the Notification issued by the Ministry of Corporate Affairs on 7^th May, 2018, amending section 139 of the Companies Act, 2013, the mandatory requirement for ratification of appointment of Auditors by the Members at every AGM has been omitted and hence your Company has not proposed ratification of appointment of Messrs B S R & Co. LLP, Chartered Accountants, at the forthcoming AGM.

The Auditors'' Report is unmodified i.e. it does not contain any qualification, reservation or adverse remark or disclaimer.

Secretarial Auditor

Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Sachin Bhagwat, Practicing Company Secretary (Certificate of Practice Number: 6029) to undertake the Secretarial Audit of the Company.

The Company has annexed to this Board Report as Annexure III, a Secretarial Audit Report given by the Secretarial Auditor.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer.

Cost Auditors

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 2017-18.

The Board of Directors on the recommendation of the Audit Committee, appointed Messrs D. C. Dave & Co., Cost Accountants (Firm Registration Number 000611), as the Cost Auditors of the Company for the Financial Year 2018-19 under section 148 of the Companies Act, 2013. Messrs D. C. Dave & Co. have confirmed that their appointment is within the limits of section 141 (3)(g) of the Companies Act, 2013 and have also certified that they are free from any disqualifications specified under section 141(3) and proviso to section 148(3) read with section 141(4) of the Companies Act, 2013.

The Audit Committee has also received a Certificate from the Cost Auditors certifying their independence and arms length relationship with the Company.

As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking Members'' ratification for the remuneration payable to Messrs D. C. Dave & Co., Cost Auditors is included in the Notice convening the Annual General Meeting.

Reporting of Frauds by Auditors

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.

H. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES

Particulars of the loans given, investment made or guarantee given or security provided and the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient of the loan or guarantee or security are provided in Note Nos. 6 and 36 to the Financial Statements.

I. PUBLIC DEPOSITS AND LOANS/ADVANCES

Your Company had discontinued its Fixed Deposit Scheme for 36 months with effect from the close of office hours on 31^st January, 2014 and has also discontinued acceptance of Fixed Deposits with effect from 1^st April, 2014.

All the deposits from public and Shareholders had already matured as at 31^st March, 2017. Out of the total outstanding 64 deposits of Rs. 50.11 lakhs from the public and shareholders as at 31^st March, 2018, all deposits amounting to Rs. 50.11 lakhs, had matured and had not been claimed as at the end of the Financial Year. Since then 3 of these deposits of the value of Rs. 1.55 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.

The particulars of loans/advances, etc., required to be disclosed in the Annual Accounts of the Company pursuant to Para A of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are furnished separately.

J. EMPLOYEES

Key Managerial Personnel (KMP)

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

(a) 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

There has been no change in the KMPs during the year under review.

Employees'' Stock Option Scheme

During the year under review, on the recommendation of the Governance, Nomination and Remuneration Committee of your Company, the Trustees of Mahindra & Mahindra Employees'' Stock Option Trust have granted Stock Options to employees under the Mahindra & Mahindra Limited Employees Stock Option Scheme 2010. No Stock Options have been granted to employees under the Mahindra & Mahindra Limited Employees Stock Option Scheme 2000.

The Company has in force the following Schemes which get covered under the provisions of SEBI (Share Based Employee Benefits) Regulations, 2014 (SBEB Regulations):

1. Mahindra & Mahindra Limited Employees Stock Option Scheme - 2000 (2000 Scheme)

2. Mahindra & Mahindra Limited Employees Stock Option Scheme - 2010 (2010 Scheme)

3. M&M Employees Welfare Fund No. 1

4. M&M Employees Welfare Fund No. 2

5. M&M Employees Welfare Fund No. 3

There are no material changes made to the above Schemes and these Schemes are in compliance with the SBEB Regulations. Your Company''s Auditors, Messrs B S R & Co. LLP, have certified that the Company''s above-mentioned Schemes have been implemented in accordance with the SBEB Regulations, and the Resolutions passed by the Members for the 2000 Scheme and the 2010 Scheme.

Information as required under the SBEB Regulations read with SEBI Circular CIR/CFD/POLICY CELL/2/2015 dated 16^th June, 2015 have been uploaded on the Company''s website and can be accessed at the Web-link: http://www.mahindra.com/resources/ investor-reports/FY18/Annual Reports/Links-AnnualReport.zip

Particulars of Employees and related disclosures

The Company had 296 employees who were in receipt of remuneration of not less than Rs. 1,02,00,000 during the year ended 31^st March, 2018 or not less than Rs. 8,50,000 per month during any part of the year.

Details of employee remuneration as required under provisions of section 197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are available at the Registered Office of the Company during working hours, 21 days before the Annual General Meeting and shall be made available to any Shareholder on request. Such details are also available on your Company''s website and can be accessed at the Web-link: http://www.mahindra.com/resources/investor-reports/FY18/Annual Reports/Links-AnnualReport.zip

Disclosures with respect to the remuneration of Directors, KMPs and employees as required under section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure IV to this Report.

Industrial Relations

The year under review witnessed a very positive Industrial Relations Scenario across all manufacturing locations for the Automotive and Farm Equipment Sectors.

Your Company''s focus continues towards propagating proactive and employee centric practices. The Transformational Work Culture initiative, which aims to create an engaged workforce with an innovative, productive and competitive shop-floor ecosystem, continues to grow in strength. The Transformational Work Culture Committee (TWCC) continually engages with long-term strategic initiatives which range from anticipated Labour Law reforms to ''Swachh Bharat Abhiyaan''. Some examples of the programs put in place include ''Rise for Associates'', Industrial Relations Skills for Frontline Officers, Cultural Diagnostics Projects, Transformational work culture Projects, e-Compliance, e-Quizz for associates, e-portal for reward and recognition of associates, e-safety module and Code of Conduct for Associates. Some of the programs are run in collaboration with Mahindra Leadership University (MLU).

In order to develop skills and foster togetherness at the workplace, your Company rolled out multiple training and engagement programs covering a wide range of topics, viz. positive attitude, stress management, creativity, team effectiveness, safety and environment, quality tools, TPM, skill building programs, customer focus, awareness on Promise 2019, Code of Conduct and a Union Leadership Development Program.

The Mahindra Skill Excellence initiative is a holistic approach to enhance the skill and capabilities of shop floor associates, and has received good participation across manufacturing facilities. As a result of this effort, an associate from your Company represented India at the Worlds Skill Competition in Abu Dhabi in August, 2017 and the ''Beijing Arc Cup Competition'' for third year in a row.

In an endeavor to generate ideas towards improving quality, reducing cost, ensuring safety and improving productivity, your Company''s shop floor associates generated on an average 20 ideas per person.

Significant emphasis was also laid towards raising awareness on health and wellness of employees through annual medical check-ups, health awareness activities, and diet food has become a way of life over past three years. Your Company maintains an ''Employee Health Index'' at an individual level and this has been a useful tool in identifying employees who require focused counseling and monitoring.

Proactive and employee-centric shop floor practices, a focus on transparent communication of business goals, an effective concern resolution mechanism, and a firm belief that employees are the most valuable assets of the Company, are the cornerstone of your Company''s employee relations approach. An ''open door policy'' with constant dialogue to create win-win situations, have helped your Company build trust and harmony. The Industrial Relations scenario continued to be largely positive across all Manufacturing locations. Bonus settlements were amicably agreed upon at all locations.

The sustained efforts towards building a transformational work culture resulted in zero production loss in the Financial Year 2017-18 and helped create a collaborative, healthy and productive work environment.

Safety, Occupational Health and Environment

During the year under review, your Company revised its Safety, Occupational Health & Environmental (SOH&E) Policy. The leadership''s commitment towards SOH&E, is demonstrated through inclusion of compliance as well as voluntary commitments in the revised policy. SOH&E targets have been set as per the revised policy. Implementation of various initiatives under the policy and achievement of set targets were assessed through audits (both internal and external) and management reviews.

At each Plant location, annual events were organized and commemorated like National Safety Day/Month, World

Environment Day, Road Safety Week and Fire Service Week. Training programs were conducted for all stakeholders as per the scheduled training calendar through various physical and e-learning modules. In the year under review, your Company completed second batch of Accelerated Learning Program (ALP) on safety, to encourage innovations and best practices related to SOH&E. To strengthen the safety culture, Behaviour Based Safety (BBS) - Level 2 has been introduced at all plants.

Your Company carried out statutory safety audits including electrical safety audits of all facilities, as per the amended legal requirements. For the year under review, your Company achieved substantial reduction in the fire load at all the manufacturing plants.

Your Company continued its commitment to improve the wellbeing of employees and contract associates through various activities under project Parivartan like organizing physical fitness activities including Walkathon, Yoga, Zumba, medical checkups, health consultation and counseling. Further, all locations observed World Health Day, World Heart Day, World Kidney Day and World Diabetes Day. Way2Wellness sessions were conducted covering topics like Healthy Heart and Diabetic feet.

In line with the ''Go Green'' philosophy, your Company is continuously adopting new techniques to eliminate and minimize the environmental impact. Various projects have been implemented by your Company in air, water and waste water management and solid waste management. These initiatives are also extended to the supplier community of your Company.

Your Company has adopted Global Reporting Initiative (GRI) -G4 Guidelines, and has undertaken projects aimed at climate change mitigation, sustainable source use and protection of bio-diversity. Some examples of successful initiatives are LED lighting project, Energy efficiency Motors, Solar power installation and certified green building projects with platinum and gold rated facilities.

In addition to above, World Ozone Day, World Environment Day, No Print Day, World Earth Day, World Water Day and Energy Conservation Week and Water Conservation Week are also observed on an annual basis.

Certifications/Recertification’s

All Plants of your Company have been recertified under standard ISO 14001: 2015 and OHSAS 18001: 2007. Further, all plants are in the process of implementing, integrated management system along with adopting the revised environmental standard ISO 14001: 2015.

In March, 2018, all seven plants of Automotive Sector were awarded TPM excellence award, by Japanese Institute of Plant Maintenance (JIPM). In April, 2018, five Plants of your Company also received certification for "Zero Waste to Landfill" from Intertek USA.

The Company has revised its targets under SOH&E policy and these targets are reviewed periodically by senior management. The focused initiatives and reviews have helped to improve SOH&E performance of your Company in the period 2017-18.

K. BOARD & COMMITTEES Directors

As mentioned in the previous Annual Report, Mr. Deepak S. Parekh ceased to hold office as an Independent Director of the Company from 8^th August, 2017, upon completion of his tenure as approved by the Shareholders at the 68^th Annual General Meeting. Further, Mr. T. N. Manoharan was appointed at the 71^st Annual General Meeting held on 4^th August, 2017 as an Independent and Non-Executive Director of the Company for a period of 5 consecutive years commencing from 11^th November, 2016 to 10^th November, 2021.

Mr. Anand Mahindra retires by rotation and, being eligible, offers himself for re-appointment at the 72^nd Annual General Meeting (AGM) of the Company scheduled to be held on 7^th August, 2018.

The Company has received an intimation from Life Insurance Corporation of India informing that Mr. S. B. Mainak has resigned from the Board of the Company. Accordingly, Mr. S. B. Mainak ceased to be a Director of the Company with effect from 11^th May, 2018.

The Board places on record its sincere appreciation of the valuable services rendered by Mr. S. B. Mainak during his tenure as a Director of the Company.

The Governance, Nomination and Remuneration Committee, on the basis of performance evaluation of Independent Directors and taking into account the external business environment, the business knowledge, acumen, experience and the substantial contribution made by Mr. M. M. Murugappan and Mr. Nadir B. Godrej during their tenure, has recommended to the Board that continued association of Mr. M. M. Murugappan and Mr. Nadir B. Godrej as Independent Directors of the Company would be beneficial to the Company. Based on the above and the performance evaluation of Independent Directors, the Board recommends re-appointment of Mr. M. M. Murugappan and

Mr. Nadir B. Godrej, as Independent Directors of the Company, not liable to retire by rotation, to hold office for a second term of 2 (two) consecutive years on the Board of the Company. The Company has received the requisite Notices from a Member in writing proposing their appointment as Independent Directors.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Pursuant to the provisions of the Companies Act, 2013, and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual evaluation of its own performance and that of its Committees as well as performance of 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 Executive Chairman of the Company was also carried out by the Independent Directors, taking into account the views of the Managing Director and Non-Executive Directors. The Directors expressed their satisfaction with the evaluation process. The Independent Directors and Executive Chairman also carried out performance evaluation of the Managing Director of the Company.

The details of programs for familiarization of the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, number of programs and number of hours spent by each Independent Director in terms of the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are available on the Company''s website and can be accessed at the following Weblink: http://www.mahindra.com/resources/investor-reports/FY18/Annual Reports/Links-AnnualReport.zip

Your Company has adopted the following Policies which, inter alia, include criteria for determining qualifications, positive attributes and independence of a Director:

(a) Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management;

(b) Policy for remuneration of the Directors, Key Managerial Personnel and other employees.

The Policies mentioned at (a) and (b) above are attached as Annexure V-A and V-B respectively and form part of this Report.

Directors'' Responsibility Statement

Pursuant to section 134(5) of the Companies Act, 2013, your Directors, based on the representations received from the Operating Management, and after due enquiry, confirm that:

(a) in the preparation of the annual accounts for the Financial Year ended 31^st March, 2018, the applicable accounting standards have been followed;

(b) they had in consultation with Statutory Auditors, selected accounting policies and applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2018 and of the profit of the Company for the year ended on that date;

(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,

2013 for safeguarding the assets of the Company and for preventing and detecting fraud and irregularities;

(d) they have prepared the annual accounts on a going concern basis;

(e) they have laid down adequate Internal Financial Controls to be followed by the Company and such Internal Financial Controls were operating effectively during the Financial Year ended 31^st March, 2018;

(f) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively throughout the Financial Year ended 31^st March, 2018.

Board Meetings and Annual General Meeting

A calendar of Meetings is prepared and circulated in advance to the Directors.

During the year 1^st April, 2017 to 31^st March, 2018, eight Board Meetings were held on: 30^th May, 2017, 13^th June, 2017, 4^th August, 2017, 9^th October, 2017, 10^th November, 2017, 13^th December, 2017, 9^th February, 2018 and 28^th March, 2018. The 71^st Annual General Meeting (AGM) of the Company was held on 4^th August, 2017.

Meetings of Independent Directors

The Independent Directors of your Company meet before the Board Meetings without the presence of the Executive Chairman or the Managing Director or other Non-Independent Director or Chief Financial Officer or any other Management Personnel. These Meetings are conducted in an informal and flexible manner to enable the Independent Directors to discuss matters pertaining to, inter alia, review of performance of Non Independent Directors and the Board as a whole, review the performance of the Executive Chairman of the Company (taking into account the views of the Executive and Non-Executive Directors), review the performance of the Company, 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.

Audit Committee

The Board at its Meeting held on 4^th August, 2017 re-constituted the Audit Committee and appointed Mr. T. N. Manoharan as the Chairman with effect from 8^th August, 2017. The Committee comprises of four 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 and possess strong accounting and financial management knowledge. The Company Secretary of the Company is the Secretary of the Committee.

All the recommendations of the Audit Committee were accepted by the Board.

L. GOVERNANCE Corporate Governance

Your Company has a rich legacy of ethical governance practices many of which were implemented by the Company, even before they were mandated by law. Your Company is committed to transparency in all its dealings and places high emphasis on business ethics. A Report on Corporate Governance along with a Certificate from the Statutory Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report.

Vigil Mechanism

The Vigil Mechanism as envisaged in the Companies Act, 2013, the Rules prescribed there under and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is implemented through the Company''s Whistle Blower Policy to enable the Directors, employees and all stakeholders of the Company to report genuine concerns, to provide for adequate safeguards against victimization of persons who use such mechanism and make provision for direct access to the Chairman of the Audit Committee.

Whistle Blower Policy of your Company is available on the

Company''s website and can be accessed at the Web-link:

http://www.mahindra.com/resources/investor-reports/FY18/

Annual Reports/Links-AnnualReport.zip

Further details are available in the Report on Corporate

Governance that forms part of this Annual Report.

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

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. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. The Policy is gender neutral. During the year under review, 1 complaint with allegations of sexual harassment was filed, which was disposed-off as per the provisions of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and as of 31^st March, 2018, no complaint was pending. One complaint pending as on 31^st March, 2017, was also disposed-off during the year under review.

Business Responsibility Report

The ''Business Responsibility Report'' (BRR) of your Company for the year 2017-18 forms part of this Annual Report as required under Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Your Company strongly believes that sustainable and inclusive growth is possible by using the levers of environmental and social responsibility while setting inspirational targets and improving economic performance to ensure business continuity and rapid growth. Your Company is committed to leverage ''Alternative Thinking'' to build competitive advantage in achieving high shareholder returns through customer centricity, innovation, good governance and inclusive human development while being sensitive to the environment.

Risk Management

Your Company has a well-defined risk management framework in place. The risk management framework works at various levels across the enterprise. These levels form the strategic defence cover of the Company''s risk management. The Company has a robust organizational structure for managing and reporting on risks.

Your Company has constituted a Risk Management Committee of the Board which is authorized 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.

Your Company has developed and implemented a Risk Management Policy which is approved by the Board. The Risk Management Policy, 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 organization.

M. CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY

Corporate Social Responsibility (CSR)

Your Company''s Corporate Social Responsibility efforts continue to be directed towards supporting the constituencies of girls, youth and farmers by innovatively supporting them through programs in the domains of education, health and environment, while harnessing the power of technology. It is only through these sustained and continued efforts that your Company can build and consolidate its CSR initiatives which contribute to nation building.

During the last financial year, your Company has been making an impact through its ongoing CSR programs, some of the notable ones include - Project Nanhi Kali, which supports the education of underprivileged girls, Mahindra Pride Schools and Mahindra Pride Classrooms, which provide livelihood training to youth from socially and economically disadvantaged communities, and a variety of other scholarship programs, which range from providing opportunities to youth from low income group families to undergo diploma courses at vocational education institutes, to allowing meritorious students to pursue their post graduate studies at reputed universities overseas, to allowing meritorious and deserving students to study at the Mahindra United World College in Pune.

In the area of public health, your Company sponsored Lifeline Express, through which medical care and treatment was provided to communities who do not have access to any medical facilities. Further, your Company supported critical patients suffering from cancer and other life threatening illnesses and also lent support for setting up of the Head and Neck Cancer Institute.

Your Company also contributed to the environment by adding green cover through planting of over 1.5 million trees this year through Project Hariyali. Your Company continues to support small and marginal farmers by training them in effective farming practices including soil health, crop planning, creating model farms with bio-dynamic farming practices, and increasing the water table with a view to increasing crop productivity. These initiatives are implemented through the Wardha Farmer Family Project, Krishi Mitra Project and Integrated Watershed Development Project. Your Company also partnered with the Maharashtra State Government to support the Village Social Transformation Mission of the Government.

Your Company is working to create a ''Zero Fatality Corridor'' to ensure ''zero'' deaths due to accidents on Mumbai Pune Expressway. In addition to the above CSR initiatives, your Company has a vibrant ESOPs (Employee Social Options) platform through which the employees are provided opportunities to give back to the community.

During the last financial year, your Company was awarded the prestigious ''Corporate Citizen of the Year 2017'' by Economic Times as well as the ''Socially Aware Corporate of the Year'' at

Business Standard Awards 2018, both being a validation of the Company''s sustained efforts to ''Rise for Good''.

CSR Policy

The Corporate Social Responsibility Committee had formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) which was subsequently adopted by it and is being implemented by the Company. The CSR Policy including a brief overview of the projects or programs undertaken can be accessed at the Company''s website through the Web-link: http://www.mahindra.com/resources/investor-reports/FY18/ Annual Reports/Links-AnnualReport.zip

CSR Committee

The CSR Committee comprises of Dr. Vishakha N. Desai (Chairperson), Mr. Anand G. Mahindra, Mr. R. K. Kulkarni, Dr. Pawan Goenka and Mr. Vikram Singh Mehta. The Committee, inter alia, reviews and monitors the CSR as well as Sustainability activities.

During the year under review, your Company spent Rs. 81.97 crores on CSR activities. The amount equal to 2% of the average net profit for the past three financial years required to be spent on CSR activities was Rs. 81.27 crores. The detailed Annual Report on the CSR activities undertaken by your Company in Financial Year 2018, is annexed herewith marked as Annexure VI.

Sustainability

During the year under review, the 10^th Non-Financial Report was released for the year 2016-17. This year''s Report was the first ''Integrated Report'' conforming to reporting frameworks viz. International Integrated Reporting Council (IIRC) and Global Reporting Guideline - ''GRI G4 Core option''. The report was externally assured by DNV-GL.

Your Company continued the focus on the Environmental, Social and Governance (ESG) parameters, in the year under review by developing Mahindra Sustainability Framework to ensure common language for sustainability across the Group. This framework defines sustainability as building enduring businesses by rejuvenating the environment and enabling stakeholders to rise. Under the three pillars People, Planet and Profit of Sustainability; various actions have been identified for implementation across the Group. Many of these actions are already underway as demonstrated by the Igatpuri Plant by getting certified as ''Water Positive'' and being the 1^st Plant in India to be certified by Intertek as ''Zero Waste to Landfill''.

The Company uses 63% less energy to produce a vehicle than what was done eight years ago. Mahindra Towers at Worli and Kandivali are Indian Green Building Council (IGBC) Platinum Certified existing buildings. The Mahindra IT Centre at Kandivali is USGBC LEED gold certified green building.

Mr. Anand G. Mahindra, Executive Chairman of your Company represented the Corporate World Economic Forum at Davos and issued a ''Call to Action'' to all industries and businesses to adopt Science Based Targets to restrict average global temperature rise to 2 degree Celsius in alignment of Paris Climate Change Agreement. Mr. Anand Mahindra has been invited by Mr. Edmund G. Brown, Governor of California to be the Co-Chair at the Global Climate Action Summit to be held in September, 2018 in San Francisco, California.

The Sustainability performance for your Company for the Financial Year 2017-18 will be ready for release shortly.

Your Company was recognized for its leadership position on the ESG dimensions during the year under review, by way of:

- Winning the Indo German Chamber of Commerce Award 2017 for ''Best Sustainable Business Practices''.

- Winning Cll National Energy Conservation Awards and Cll National Water Management Awards for 6 manufacturing plants.

- Winning 1^st runner up for Igatpuri Plant at Frost & Sullivan-TERI Sustainability 4.0 for Sustainable Factory of the Year.

- Retaining the status of getting listed on the Dow Jones Sustainability Index-2017 under the ''Emerging Market Index'' for the fourth year with improvement in percentile scores.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached as Annexure VII and forms part of this Report.

N. SECRETARIAL

Compliance with the provisions of Secretarial Standard 1 and Secretarial Standard 2

The applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ''Meetings of the Board of Directors'' and ''General Meetings'', respectively, have been duly complied by your Company.

Extract of Annual Return

Pursuant to section 134(3)(a) and section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return as on 31^st March, 2018 in Form No. MGT-9 is attached as Annexure VIII and forms part of this Report.

GENERAL

The Executive Chairman of the Company did not receive any remuneration or commission from any of the subsidiary of your Company. The Managing Director of the Company did not receive any remuneration or commission from any of the subsidiary of your Company. However, the Managing Director has exercised ESOPs of a subsidiary company during the year, which were granted in the earlier year(s).

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions/ events on these items during the year under review except as stated hereunder:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of Shares (Including Sweat Equity Shares) to employees of the Company under any Scheme save and except ESOS referred to in this Report.

3. Significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and the Company''s operation in future.

4. Voting rights which are not directly exercised by the employees in respect of shares for the subscription/ purchase of which loan was given by the Company (as there is no scheme pursuant to which such persons can beneficially hold shares as envisaged under section 67(3) (c) of the Companies Act, 2013).

For and on behalf of the Board

ANAND G. MAHINDRA

Executive Chairman

Mumbai, 29^th May, 2018

---

Mar 31, 2018

DIRECTORS'' REPORT

The Directors present their Thirty First Annual Report together with the audited accounts of your Company for the year ended March 31, 2018.

FINANCIAL RESULTS (STANDALONE)

(Rs, in Million)

For the year ended March 31	2018	2017
Income	253,919	240,583
Profit before Interest, Depreciation and tax	56,335	45,647
Interest	(708)	(638)
Depreciation	(6,562)	(6,222)
Profit Before Tax	49,065	38,787
Provision for taxation	(9,072)	(8,314)
Profit after tax	39,993	30,473
Other Comprehensive Income	128	(1)
Balance brought forward from previous year	120,789	106,118
Profit available for appropriation	160,910	136,590
Final Dividend Including tax	(10,361)1	(13,787)2
Transfer from Share Option Outstanding Account	51	28
Transfer from General Reserve	-	-
Transferred on merger of US branch with US subsidiary	-	(2,042)
Transferred to Special Economic Zone re-investment reserve	(42)	-
Balance carried forward	150,558	120,789

¹ Dividend for the financial year ended March 31, 2017

² Dividend for the financial year ended March 31, 2016

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs, 14/- per Equity Share (280%), payable to those Shareholders whose names appear in the Register of Members as on the Book Closure Date.

Your Company has formulated a Dividend Policy and disclosed it on the website of the Company

https://www.techmahindra.com/sites/ResourceCenter/

brochures/investors/corporategovernence/Dividend-

Policy.pdf

SHARE CAPITAL

During the year under review, your Company allotted 5,637,728 equity shares on the exercise of stock options under various Employee Stock Option Plans. Consequently the issued, subscribed and paid-up equity share capital has increased from Rs, 4,870.48 Million divided into 974,096,080 equity shares of Rs, 5/- each to Rs, 4,898.67 Million divided into 979,733,808 equity shares of Rs, 5/- each.

BUSINESS PERFORMANCE / FINANCIAL OVERVIEW

Your Company represents the connected world, offering innovative and customer-centric information technology experiences, enabling Enterprises, Associates and the Society to Rise™. The Company has presence across 90 countries and helps over 900 global customers including Fortune 500 companies. The Company''s convergent, digital, design experiences, innovation platforms and reusable assets connect across a number of technologies to deliver tangible business value and experiences to the stakeholders.

In the fiscal year 2017-18 the Company''s consolidated revenues increased to Rs, 307,729 Million from Rs, 291,408 Million in the previous year, a growth of 5.6%. The geographic split of revenue is well balanced across regions, with 46% share from the Americas, 30% share from Europe and 24% from the Rest of the World.

The Consolidated Profit Before Interest, Depreciation and Tax (EBITDA) was at Rs, 47,096 Million, against Rs, 41,844 Million in the previous year.

The Consolidated Profit after Tax (PAT), amounted to Rs, 37,998 million, as against Rs, 28,129 million in the previous year.

In the emerging areas of Big Data, Mobility, Networks, Cloud, Security, Platforms and Engineering Services, the Company is well placed with its breadth of Service offerings and has a diversified customer base. Tech Mahindra also has intellectual property in various

Products & Services and Platforms, and is committed towards building a synergistic relationship with its partners, to deliver a complete and customized end-to-end solutions to its customers.

There are no material changes or commitments affecting the financial position of the Company between the end of the financial year and the date of the report.

ACQUISITIONS

CJS Solutions Group, LLC (HCI), USA:

The Company, on May 4, 2017, through its wholly owned subsidiary Tech Mahindra (Americas) Inc. acquired 84.7% stake in CJS Solutions Group, LLC (doing business as HCI) for an initial consideration of Rs, 5,742 Million (USD 89.5 Million). Further the subsidiary of the Company acquired a call and a written put option on the 15.3% Non-Controlling Interest to be exercised over a three year period ending December 31, 2019. The HCI Group works with some of the world''s most prestigious Tier-I healthcare service providers, primarily in the US and UK, focusing on providing end-to-end implementation of Electronic Health Record (EHR) and Electronic Medical Record (EMR) software, training and support services. This will help scale up Healthcare revenue, as provider sub vertical is a key element of Healthcare and Life Sciences (HLS) strategy. The Company offers innovative and end-to-end integrated solutions for healthcare providers. Its solutions enhances the efficiency of physicians, hospitals, ancillary facilities, clinics, governmental health bodies and public health organizations.

Increase in stake in Comviva Technologies Limited:

The Company, in accordance with the shareholders agreement, acquired an additional 32.07% stake in Comviva Technologies Limited from Bharati Group and Westbridge Ventures II Investment holdings for a total consideration of '' 3,618 Million. The Company also acquired 0.68% from some shareholders for a total consideration of '' 70 Million. As a result of this, the Company now holds 99.85% stake in Comviva Technologies.

Comviva is amongst the leaders in mobility solutions. Its expansive suite of productized solutions is deployed with over 130 service providers and banks, in over 90 countries across Asia, Africa, Middle East, Latin America and Europe, and powers services to over two billion mobile subscribers.

Altiostar Inc:

The Company, through its wholly owned subsidiary Tech Mahindra (Americas) Inc. has invested an amount of US$ 15 Million in return for a 22.5% shareholding in Altiostar. Altiostar is the mobile broadband industry''s first provider of vRAN (virtualized Radio Access Networks) solution for LTE technology.

DETAILS OF SUBSIDIARIES/JOINT VENTURES/ASSOCIATE COMPANIES

During the year under review, the Board of Directors of the Company at their meeting held on November 1, 2017 approved a proposal to amalgamate Sofgen India Private Limited, a step-down subsidiary with the Company in accordance with the provisions of Companies Act, 2013.

The Company and Sofgen India Private Limited have filed the Company Scheme Petitions before the Hon''ble National Company Law Tribunals at Mumbai and Chennai respectively and are pending for approval.

The performance and financial position of the subsidiaries, associate companies and joint venture companies included in the consolidated financial statement is provided in accordance with the provisions of Section 129 read with Rule 5 of the Companies (Accounts) Rules, 2014 containing the salient features of the financial statement of Company''s subsidiaries/joint ventures or associate companies in Form AOC - 1 in "Annexure I" to this report.

Pursuant to Rule 8(5) (iv) of the Companies (Accounts) Rules, 2014, the names of the companies which have become or ceased to be the subsidiaries, joint ventures or associate companies during the year are provided in "Annexure II" to this report.

The policy for determining Material Subsidiaries formulated by the Board of Directors is disclosed on the Company''s website and is accessible on https://www.techmahindra.com/sites/ResourceCenter/ brochures/investors/corporategovernance/policy-For-determining-Material-Subsidiaries.pdf

HUMAN RESOURCES

During 2017-18, your Company focused on unlocking experiences for a connected future and deliver an enterprise of Future. Along with establishing as DT (Digital Transformation) provider, your Company has also taken a step towards being a social enterprise. Your Company''s mission is to attain growth while respecting and supporting the stakeholder network. The Company aims to be the organization that will shoulder the responsibility of being a good citizen, inspire associates and be role model for peers. With the intent of future proofing the associates and preparing them for future, your Company has embarked on journey of FUTURise that ensures continuous learning, unlearning, re-learning, and contribution to innovation for our customers. Increasing number of enterprises are embracing new technologies like Digital, Automation, Cloud, Augmented Reality to provide enhanced user experience, the need to transform skillset of IT workforce is prominent than ever. Your Company is investing heavily in re-skilling and up-skilling its associates to enable them to RISE™ to future challenges and opportunities and achieve customer delight.

Building Future ready workforce and Continuous Learning Organization

Your Company has launched ''DEXT'' - a cloud based new age learning platform to facilitate an Integrated, Social, Personalized and Device Agnostic Learning experience for its associates and building a continuous learning organization. Further, your Company has partnered with some of the best in industry players like edX, Pluralsight, SumTotal and new age AI based learning platforms to provide world-class learning experience to its associates and accelerate their learning.

The ''Role Based Academy'' provides a structured, holistic approach to building role based competencies for critical and new age roles in the organization and provide career path to the associates. Your Company has trained and certified 80,000 associates in digital technologies, 20,000 associates in automation and trained 50,000 associates in emerging and digital technologies. This focus has positioned your Company to service leading global Enterprises in their transformation journey and enhance growth and profitability. Emphasizing on the new age learning methods and platforms, your Company has launched the Reverse Mentoring program, where Gen Y/Z grooms Leadership on new age practices and tools. Your organization has taken steps in the direction of building a workplace of future by building UVO, a chat bot that is always available for instant query resolution, handle transactions and acts as your virtual office assistant.

Skill building through job adjacency in the form of eXtra Mile platform allows the associates to opt for small assignments posted pan organization and utilize their skills for the benefit of the assigned project. Career counseling platform provides guidance by experienced leaders when lacking direction or clarity.

In order to keep the associates aligned to the digital mission of the organization - Mission 2020, your Company has been continuously hosting conclaves like Mission Innovation and TechM NXT that allows Tech Mighties to express their views about the big bets and trends of the world, connect with internal and external stakeholders, co-create new age ventures and also celebrate the realization of ideation. Iris, Appify, helped spark the entrepreneurial spirit among associates of the Company. In order to reach out to the multicultural and diverse workforce your Company has embarked on the journey of Gasification and launched Career Turbo for career exploration and Rise with Dice to help ingrain the culture.

Rewarding and Recognizing

Your Company believes that timely appreciation remains key to creating a happy organization and recognized over 45,000 Tech Mighties through multiple channels. In line with the digitization focus, the entire Reward and Recognition process is digital and associates share their rewards and pride on their respective social networks.

Strive, Sustain and Safety

Your Company took various steps to ensure the safety and work-life balance of associates working at Tech Mahindra. The Associate Welfare Trust established for the associates, by the associates, helped associates and their family members in their medical exigencies. Company''s Mantra of "Wellness before Business" is reflected in the medical camps, wellness programs, work from home facility and numerous other facilities across all the large campuses. Your Company has established a robust Emergency contact process with toll free numbers across India, US, UK, and Australia and conducted self-defence training sessions across many locations.

During the year under review, Tech Mahindra''s people practices, policies and programs have been awarded in various external forums representing members from not just the Information Technology industry but the entire spectrum of the corporate world. Some of the awards/accomplishments during FY 2017-18 are -

- Society for Human Resource Management - HR Excellence 2017 in Learning and Development (runner up) and Employer with Best Health and Wellness initiatives.

- Business World HR Award in HR Technology 2017

- Featured in AVTAR - 100 Best Companies of 2017 Working Mother and AVTAR Best Companies for Women in India.

- Featured in HR Asia Best Companies To Work For In Asia 2017 - Malaysia

- Excellence in Workplace Diversity Award at Mercer NDTV Employer Excellence Awards 2017.

These awards and recognitions have positioned Tech Mahindra as an organization that puts people first, delivers future focused excellence in the field of People Management and recognizes the importance of human capital as a key driver of business growth.

QUALITY

Your Company continues its focus on quality and strives to exceed customer expectations at all times. It is certified under various standards to meet client demands and enhance value delivery - Successfully assessed for, ISO 9001:2015, ISO 20000:2011, ISO 27001: 2013, TL9000 R 5.5, ISO 13485, AS9100 (Standard for Aerospace domain - scope of certification limited to the aerospace business within Tech Mahindra). In addition to these, your Company also maintains its commitment to health, safety and environment by continually improving its processes in accordance with ISO 14001 and OHSAS 18001 standards. Your Company is also certified on ISO 22301:2012 (Societal Security) and has a comprehensive Business Continuity and Disaster Recovery framework, to prevent potential business disruptions in the event of any disaster. It has processes that will help resume services to customers'' acceptable service levels. Automated Service Desk with SLAs for enabling business and Vulnerability Assessment and Penetration Testing Lab for secured corporate network operations are highlights showcasing information security posture of the Organization.

Tech Mahindra (IT Division) has been assessed for implementation of high maturity business excellence practices'' at Mahindra Group (Services Sector). It has been assessed at TMW Maturity Stage 5 (on scale of 1-10 stages) of Mahindra Business Excellence Framework - The Mahindra Way. These certifications are testimony of the robustness of business processes and at large the quality culture imbibed in the organization.

Your Company has also strengthened Process/Practice and Tools Industrialization of various Engineering activities for Development, Testing and Managed service portfolio to achieve standardization, better efficiency and best practices being implemented across the businesses.

Your Company has continued to strengthen the process for transforming Quality Assurance processes to New Age Delivery processes with focus to achieve better customer experience and faster quality delivery; these are measured and monitored through various indices.

One such initiative is "Execution Excellence Index" focusing on achieving high project maturity, improved tools usage and standardization, knowledge management and performance on key business metrics, in order to strengthen further the Business Excellence in what we deliver to the customers, thereby achieve better Customer satisfaction. Your Company is putting all the initiatives in place in order to ensure the Company delivers as stated in Quality Policy.

DIRECTORS

During the year under review all Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations And Disclosure Requirements) Regulations, 2015.

Pursuant to the provisions of Section 152(6)(c) of the Companies Act, 2013, Mr. Vineet Nayyar, Director (DIN: 00018243) is liable to retire by rotation and does not offer himself for reappointment. The Board has decided, not to fill the vacancy caused by retirement of Mr. Vineet Nayyar.

Mr. Vineet Nayyar served on your Board since January 17, 2005. He served as Managing Director & CEO till August 10, 2012. Mr. Vineet Nayyar was appointed as Executive Vice Chairman with effect from August 10, 2012 till August 10, 2015. Thereafter, he continued as Vice Chairman.

Mr. Vineet Nayyar is one of the strongest pillars in the Tech Mahindra success story. The Board places on record its sincere appreciation for the valuable advice and guidance of Mr. Vineet Nayyar during his tenure as a Director on the Board.

Training & Familiarization Programme

The Company has laid down a policy on training for Independent Directors as part of the governance policies.

The Board Members are regularly updated on changes in Corporate and allied laws, Taxation laws & matters thereto. MD & CEO along with Senior Leadership conducts an exclusive quarterly session for the Board Members sharing updates about the Company''s business strategy, operations and the key trends in the IT industry relevant for the Company. These updates help the Board Members to keep themselves abreast with the key changes and their impact on the Company.

The details of programmes for familiarization of the Independent Directors with the Company are available on the Company''s website and can be accessed at the we blink; https://www.techmahindra. com/sites/ResourceCenter/brochures/investors/ corporategovernence/Familiarization-Programme-to-Independent-Directors.pdf

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Regulation 19 read with Schedule II, Part D of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has devised a policy on evaluation of performance of Board of Directors, Committees and Individual directors. Accordingly, the Chairman of the Nomination and Remuneration Committee obtained from all the board members duly filled in evaluation templates for evaluation of the Board as a whole, evaluation of the Committees and peer evaluation. The summary of the evaluation reports was presented to the respective Committees and the Board for their consideration.

Policy on Directors'' Appointment and Remuneration

The Governance policies laid down by the Board of Directors of your Company include:

i. Policy on appointment and removal of Directors, Key Managerial Personnel and Senior Management

ii. Policy on remuneration to the Directors, Key Managerial Personnel and Senior Management and other Employees

The extract of these two policies are provided in "Annexure III".

SUCCESSION PLAN

In accordance with the principles of transparency and consistency, your Company has adopted governance policies for Board of Directors, KMP & Senior Management appointments, remuneration & evaluation. These governance policies inter alia outline Succession Planning for the Board, Key Managerial Personnel and Senior Management.

Key Managerial Personnel (KMPs)

Pursuant to provisions of Section 203 of the Companies Act, 2013, Mr. C. P. Gurnani, Managing Director & Chief Executive Officer, Mr. Milind Kulkarni, Chief Financial Officer and Mr. Anil Khatri, Company Secretary & Compliance Officer were the Key Managerial Personnel of the Company during the year.

Mr. Milind Kulkarni is superannuating on May 31, 2018 as Chief Financial Officer of the Company. Mr. Manoj Bhat is appointed as Chief Financial Officer of the Company w.e.f. June 1, 2018.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, your Directors, based on the representation(s) received from the Operating Management and after due enquiry, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. they have selected such accounting polices and these have been applied consistently and, reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for the year ended on that date;

iii. proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts have been prepared on a going concern basis;

v. they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

vi. the proper systems to ensure compliance with the provisions of all applicable laws are in place and are adequate and operating effectively.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has internal financial controls which are adequate and were operating effectively. The controls are adequate for ensuring the orderly & efficient conduct of the business, including adherence to the Company''s policies, the safe guarding of assets, the prevention & detection of frauds & errors, the accuracy & completeness of accounting records and timely preparation of reliable financial information.

STATUTORY AUDITORS

The members, in the 30^th Annual General Meeting held on August 1, 2017, appointed M/s. B S R & Co. LLP, Chartered Accountants, [Firm''s Registration No. 101248W/W-100022] as the Statutory Auditors (''BSR'') of the Company, to hold office for a term of five years from the conclusion of the 30^th Annual General Meeting (AGM) of the Company held in the financial year 2017-18 until the conclusion of the AGM of the Company for the financial year 2021-22 on such remuneration as may be determined by the Board of Directors.

Pursuant to the amendment to Section 139 of the Companies Act, 2013 which was notified on May 7, 2018, ratification of appointment of Statutory Auditors at every AGM is no longer required.

There are no qualifications, reservation or adverse remark or disclaimer made in the audit report for the Financial Year 2017-18.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Dr. K. R. Chandratre, Practicing Company Secretary, Pune to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is provided as "Annexure IV". There are no qualifications, reservation or adverse remark or disclaimer made in the Secretarial Audit Report.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with the applicable Secretarial Standards.

EXTRACT OF THE ANNUAL RETURN

Pursuant to the provisions of Section 134(3) (a) of the Companies Act, 2013, the extract of the Annual Return in Form MGT-9 is attached as "Annexure V".

MANAGERIAL REMUNERATION

Disclosures of the ratio of the remuneration of each director to the median employee''s remuneration and other details as required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time, are provided in "Annexure VI".

None of the directors or Managing Director of the Company, received any remuneration or commission from Subsidiary Companies of your Company.

The details of remuneration paid to the Directors including the Managing Director of the Company are given in Form MGT-9 forming part of the Directors Report.

PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Companies Act, 2013 ("the Act") read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. However, pursuant to first proviso to Section 136(1) of the Act, this Report is being sent to the Shareholders excluding the aforesaid information. Any shareholder interested in obtaining said information, may write to the Company Secretary at the Registered Office / Corporate Office of the Company and the said information is open for inspection at the Registered Office of the Company.

PREVENTION OF SEXUAL HARASSMENT POLICY

Your Company laid down Prevention of Sexual Harassment policy and it is made available on the website of the Company. The Company has zero tolerance on Sexual Harassment at workplace. During the year under review there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

EMPLOYEE STOCK OPTION SCHEMES

During the year under review, there were no material changes in the Employee Stock Option Schemes (ESOPs) of the Company and the Schemes are in compliance with the SEBI Regulations on ESOPs. As per Regulation 14 of SEBI (Share Based Employee Benefits) Regulations, 2014 read with SEBI circular dated June 16, 2015 the details of the ESOPs are uploaded on the Company''s website; https://www. techmahindra.com/sites/Resource Center/brochures/ investors/corporate governance/Details-of-ESOPs.pdf

The Board of Directors have approved a new Employee Stock Option Scheme viz. "Employee Stock Option Scheme 2018", earmarking 50,00,000 Options to be granted to the employees exercisable into equity shares. This is forming part of the Notice of the ensuing Annual General Meeting for approval of shareholders.

CORPORATE GOVERNANCE

A report on Corporate Governance covering among others composition, details of meetings of the Board and Committees along with a certificate for compliance with the conditions of Corporate Governance in accordance with the Securities and Exchange Board of India (Listing Obligations And Disclosure Requirements) Regulations, 2015, issued by the Statutory Auditors of the Company, forms part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of your Company''s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

RISK MANAGEMENT

The Risk Management Committee of the Board of Directors periodically reviews the Risk Management framework, identifies risks with criticality and mitigation plan. The elements of risk as identified for the Company with impact and mitigation strategy are set out in the Management Discussion and Analysis Report (MDA).

ESTABLISHMENT OF VIGIL MECHANISM

Your Company has laid down Whistle Blower Policy covering Vigil Mechanism with protective clauses for the Whistle Blowers. The Whistle Blower Policy is made available on the website of the Company.

DEPOSITS / LOANS & ADVANCES, GUARANTEES OR INVESTMENTS

Your Company has not accepted any deposits from the public during the year under review. The particulars of loans/advances, guarantees and investments under Section 186 of the Companies Act, 2013 are given in the notes forming part of the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All transactions entered into with Related Parties as defined under Section 2(76) of the Companies Act, 2013 and Regulation 23 of the Securities and Exchange Board of India (Listing Obligations And Disclosure Requirements) Regulations, 2015, ("The Listing Regulations"), during the financial year were in the ordinary course of business and at an arm''s length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no transactions with related parties in the financial year which were in conflict with the interest of the Company and requiring compliance of the provisions of Regulation 23 of the Listing Regulations. Suitable disclosure as required by the Indian Accounting Standards (Ind AS 24) has been made in the notes forming part of the Financial Statements.

The Company has formulated a policy on materiality of Related Party Transactions and dealing with Related Party Transactions which has been uploaded on the Company''s website; https://www.techmahindra.com/sites/ Resource Center/Brochures/investors/corporate governance / Related-Party-Transactions-Policy.pdf

The particulars of related party transactions in prescribed Form AOC - 2 are attached as "Annexure VII".

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the

Companies (Accounts) Rules, 2014 are provided in "Annexure VIII" which forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR vision of your Company is "Empowerment through Education."

In compliance with the guidelines prescribed under Section 135 of the Companies Act, 2013, your Company constituted a Corporate Social Responsibility (CSR) Committee. Your Board of Directors laid down the CSR Policy, covering the Objectives, Focus Areas, Governance Structure and Monitoring & Reporting Framework among others. The policy is available at https://www.techmahindra.com/society/default.aspx.

Your Company''s social initiatives are carried out by Tech Mahindra Foundation and Mahindra Educational Institutions.

TECH MAHINDRA FOUNDATION (TMF)

The Foundation was set up in 2007, as a Section 25 Company (referred to as a Section 8 Company in the Companies Act, 2013). Since then, it has worked tirelessly towards the vision of "Educated, skilled and able women and men are a country''s true strength", establishing itself as a prominent CSR player within the Mahindra Group as well as a leading social organization at the national level. The Foundation essentially works with children and youth from urban, disadvantaged communities in India. During the year under review, Tech Mahindra Foundation has successfully steered 160 high-impact projects with 90 partners, reaching out to 150,000 children and youth across these locations.

The key initiatives in the School Education include:

All Round Improvement in School Education (ARISE)

Tech Mahindra Foundation''s educational initiatives under ARISE are long-term school improvement programmes, in partnership with local governments and partner organizations. The Foundation has adopted 60 schools across India and is working with 18 partners to turn them around completely into model schools of excellence. ARISE initiatives encompass educational empowerment programmes for children with disabilities.

Shikshaantar

Shikshaantar, envisioned as a programme for enhancing capacity of government school teachers, has taken rapid strides during the year. TMF has been working with the East Delhi Municipal Corporation to manage its In-Service Teacher Education Institute (ITEI), where teachers from nearly 400 primary schools receive quality training on a regular basis. In addition, the Foundation has also worked with Municipal Corporations in Chennai, Bengaluru, Hyderabad, Pune & Thane for strengthening capacities of government school teachers.

Employability

Skills for Market Training (SMART) is the Foundation''s flagship programme in employability. It is built on the vision of an educated, enlightened and employed India, and a belief that educated and skilled youth are the country''s true strength. The programme started with 3 Centres in 2012 and is currently running 100 Centres at 11 locations across India. These include SMART Centres, SMART Centres (training for people with disabilities), and SMART-T Centres (training in technical trades).

In 2017-18, your Company trained more than 16,000 young women and men under its SMART programme. More than 70% of the graduates are placed in jobs upon successful completion of the training, across multiple industries.

The Foundation has partnered with the Banasthali University for Women in Rajasthan for setting up of the Tech Mahindra College of Nursing. The College will start offering Bachelor’s and Master''s Degree Programs in Nursing.

MAHINDRA EDUCATIONAL INSTITUTIONS (MEI) Technical Education

Your Company''s initiatives in technical education are carried out through Mahindra Educational Institutions (MEI), under which the Company has extended infrastructural and operational support to Mahindra Ecole Centrale, a state of-the-art technical institution in Hyderabad.

Mahindra Ecole Centrale (MEC), College of Engineering, established by Tech Mahindra in collaboration with Ecole Centrale Paris (now Centrale Supelec) and Jawaharlal Nehru Technological University, Hyderabad is set to deliver its first batch of graduates this year, after a successful four year presence on the technical education landscape of the country, characterized by its rising popularity.

This high impact, Indo-French collaboration in engineering education has emerged as a disruptive player with its keen focus on Industry-aligned and industry-sponsored education; all Ph.D. faculty roster, global internships and a distinct curriculum that includes the French language.

The Executive Council of MEC features leaders both from Tech Mahindra and the Mahindra Group. The

MEC campus, surrounded by the sprawling green Tech Mahindra Technology Centre in Hyderabad, India, is equipped with state-of-the-art academic infrastructure. To support its strong research vision MEC has set up relevant high technology laboratories for learning, media, design thinking and research.

MEC has hosted many of the Company''s customers on their visit to Tech Mahindra Technology Center (TMTC), Hyderabad. The customers express surprise and delight at the presence of MEC and its pedagogy aimed at shaping world class engineers, with global relevance and a strong European influence.

The Annual Report on CSR activities is provided as "Annexure IX".

SUSTAINABILITY

As a responsible business entity, Tech Mahindra concentrates on integrating sustainability into all aspects of the business and develop strategies for Environmental, Social and Governance (ESG) dimensions. The Company has defined strategies to leverage sustainable opportunities to create value for its stakeholders and help emerge as a more efficient organization with increasingly optimized business processes. With a structured stakeholder programme the Company has been able to design strategies and initiatives to build solutions which not just improve its sustainability credentials but reinforce the overall business philosophy too.

The Company''s responsibilities and emphasis on its green eco-system is seen through various energy, water and waste reduction initiatives that have helped cut down carbon emissions, made it more energy-efficient and help mitigate its environmental impact. Tech Mahindra is moving towards carbon neutrality through various Sustainability initiatives and best practices. The Company is striving to reduce the carbon footprint by installing solar modules, retrofitting LEDs, installing motion sensors, using star rated equipment and recycling waste water. The Company has digitalized internal communications with virtual meetings through tele/audio conferencing, which brings down meeting-related travel and other costs considerably. Your Company is investing in Green Solutions like smart grid, smart cities, smart waste management systems and electric vehicle charging systems. Your Company is also working with suppliers and vendors to cut down on logistics and transportation and thus reduce the emissions.

The recent leadership position and achievements across platforms encourage us to strive for excellence and aim even higher.

Few of the recognitions bestowed upon are:

- Recognized as World Leader for Supplier Engagement on Climate Change 2018 by CDP-the only Indian Company on this Leader Board

- Member of DJSI World Index for 2017- one amongst the only 4 Indian companies to be listed

- One of the 11 Indian Companies who are part of the DJSI Emerging Markets category

- Listed as a ''Rising Star'' in the CDP''s India Leaders 2017

- Silver Class distinction for excellent sustainability performance in the RobecoSAM 2018 Sustainability Yearbook

- Constituent of the FTSE4Good Emerging Index 2017

Tech Mahindra developed its first Integrated Report last year which is externally assured in accordance with Global Reporting Initiatives (GRI Guidelines) the latest guidelines of the internationally accepted Global Reporting Initiative (GRI) and CDSB format. The detailed reports can be accessed at https://www. techmahindra.com/company/Sustainability.aspx

AWARDS AND RECOGNITION

Your Company continued its quest for excellence in its chosen area of business to emerge as a true global brand. Several awards and rankings continue to endorse your Company as a thought leader in the industry. The Awards / recognitions received by the Company during the year 2017-18 include:

- Digital Transformation Service Provider of the Year - Telecom 2017 from Frost and Sullivan

- CP Gurnani wins the Digital Warrior award from IMC

- Tech Mahindra Performance Engineering wins IT Europa Award for "Storage/Information Management Solution of the Year"

- Recognized as a Most Honoured Company by the Institutional Investor''s 2017 All-Asia (ex-Japan) Executive Team rankings

- Oracle ASEAN Digital Transformation Partner

- Frost & Sullivan Digital Transformation Award

- Tech Mahindra recognized at SHRM Awards 2017

- Tech Mahindra retains ranking in Dow Jones Sustainability Index 2017

- Features in 100 Best organizations in 2017 Working Mother & AVTAR Best Companies for Women in India

- Business World HR Excellence Award In Technology & Learning

- Best Company in terms of Information Security Implementation at the IT Innovation & Excellence Awards 2017 in the Annual Technology Conference held by CSI (Computer Society of India)

- BlockChain solution for State Bank of India wins the SKOCH Award 2017

- Recognized amongst world''s top 100 technology companies by Thomson Reuters

- 2018 AT&T Supplier Award for its outstanding performance and service to AT&T affiliates

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the contributions made by employees towards the success of your Company. Your Directors gratefully acknowledge the co-operation and support received from the shareholders, customers, vendors, bankers, regulatory and Governmental authorities in India and abroad.

For and on behalf of the Board

Place: Mumbai Anand G. Mahindra

Date: May 25, 2018 Chairman

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Mar 31, 2018

DIRECTORS'' REPORT

The Directors present their Thirty First Annual Report together with the audited accounts of your Company for the year ended March 31, 2018.

FINANCIAL RESULTS (STANDALONE)

(Rs, in Million)

For the year ended March 31	2018	2017
Income	253,919	240,583
Profit before Interest, Depreciation and tax	56,335	45,647
Interest	(708)	(638)
Depreciation	(6,562)	(6,222)
Profit Before Tax	49,065	38,787
Provision for taxation	(9,072)	(8,314)
Profit after tax	39,993	30,473
Other Comprehensive Income	128	(1)
Balance brought forward from previous year	120,789	106,118
Profit available for appropriation	160,910	136,590
Final Dividend Including tax	(10,361)1	(13,787)2
Transfer from Share Option Outstanding Account	51	28
Transfer from General Reserve	-	-
Transferred on merger of US branch with US subsidiary	-	(2,042)
Transferred to Special Economic Zone re-investment reserve	(42)	-
Balance carried forward	150,558	120,789

¹ Dividend for the financial year ended March 31, 2017

² Dividend for the financial year ended March 31, 2016

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs, 14/- per Equity Share (280%), payable to those Shareholders whose names appear in the Register of Members as on the Book Closure Date.

Your Company has formulated a Dividend Policy and disclosed it on the website of the Company

https://www.techmahindra.com/sites/ResourceCenter/

brochures/investors/corporategovernence/Dividend-

Policy.pdf

SHARE CAPITAL

During the year under review, your Company allotted 5,637,728 equity shares on the exercise of stock options under various Employee Stock Option Plans. Consequently the issued, subscribed and paid-up equity share capital has increased from Rs, 4,870.48 Million divided into 974,096,080 equity shares of Rs, 5/- each to Rs, 4,898.67 Million divided into 979,733,808 equity shares of Rs, 5/- each.

BUSINESS PERFORMANCE / FINANCIAL OVERVIEW

Your Company represents the connected world, offering innovative and customer-centric information technology experiences, enabling Enterprises, Associates and the Society to Rise™. The Company has presence across 90 countries and helps over 900 global customers including Fortune 500 companies. The Company''s convergent, digital, design experiences, innovation platforms and reusable assets connect across a number of technologies to deliver tangible business value and experiences to the stakeholders.

In the fiscal year 2017-18 the Company''s consolidated revenues increased to Rs, 307,729 Million from Rs, 291,408 Million in the previous year, a growth of 5.6%. The geographic split of revenue is well balanced across regions, with 46% share from the Americas, 30% share from Europe and 24% from the Rest of the World.

The Consolidated Profit Before Interest, Depreciation and Tax (EBITDA) was at Rs, 47,096 Million, against Rs, 41,844 Million in the previous year.

The Consolidated Profit after Tax (PAT), amounted to Rs, 37,998 million, as against Rs, 28,129 million in the previous year.

In the emerging areas of Big Data, Mobility, Networks, Cloud, Security, Platforms and Engineering Services, the Company is well placed with its breadth of Service offerings and has a diversified customer base. Tech Mahindra also has intellectual property in various

Products & Services and Platforms, and is committed towards building a synergistic relationship with its partners, to deliver a complete and customized end-to-end solutions to its customers.

There are no material changes or commitments affecting the financial position of the Company between the end of the financial year and the date of the report.

ACQUISITIONS

CJS Solutions Group, LLC (HCI), USA:

The Company, on May 4, 2017, through its wholly owned subsidiary Tech Mahindra (Americas) Inc. acquired 84.7% stake in CJS Solutions Group, LLC (doing business as HCI) for an initial consideration of Rs, 5,742 Million (USD 89.5 Million). Further the subsidiary of the Company acquired a call and a written put option on the 15.3% Non-Controlling Interest to be exercised over a three year period ending December 31, 2019. The HCI Group works with some of the world''s most prestigious Tier-I healthcare service providers, primarily in the US and UK, focusing on providing end-to-end implementation of Electronic Health Record (EHR) and Electronic Medical Record (EMR) software, training and support services. This will help scale up Healthcare revenue, as provider sub vertical is a key element of Healthcare and Life Sciences (HLS) strategy. The Company offers innovative and end-to-end integrated solutions for healthcare providers. Its solutions enhances the efficiency of physicians, hospitals, ancillary facilities, clinics, governmental health bodies and public health organizations.

Increase in stake in Comviva Technologies Limited:

The Company, in accordance with the shareholders agreement, acquired an additional 32.07% stake in Comviva Technologies Limited from Bharati Group and Westbridge Ventures II Investment holdings for a total consideration of '' 3,618 Million. The Company also acquired 0.68% from some shareholders for a total consideration of '' 70 Million. As a result of this, the Company now holds 99.85% stake in Comviva Technologies.

Comviva is amongst the leaders in mobility solutions. Its expansive suite of productized solutions is deployed with over 130 service providers and banks, in over 90 countries across Asia, Africa, Middle East, Latin America and Europe, and powers services to over two billion mobile subscribers.

Altiostar Inc:

The Company, through its wholly owned subsidiary Tech Mahindra (Americas) Inc. has invested an amount of US$ 15 Million in return for a 22.5% shareholding in Altiostar. Altiostar is the mobile broadband industry''s first provider of vRAN (virtualized Radio Access Networks) solution for LTE technology.

DETAILS OF SUBSIDIARIES/JOINT VENTURES/ASSOCIATE COMPANIES

During the year under review, the Board of Directors of the Company at their meeting held on November 1, 2017 approved a proposal to amalgamate Sofgen India Private Limited, a step-down subsidiary with the Company in accordance with the provisions of Companies Act, 2013.

The Company and Sofgen India Private Limited have filed the Company Scheme Petitions before the Hon''ble National Company Law Tribunals at Mumbai and Chennai respectively and are pending for approval.

The performance and financial position of the subsidiaries, associate companies and joint venture companies included in the consolidated financial statement is provided in accordance with the provisions of Section 129 read with Rule 5 of the Companies (Accounts) Rules, 2014 containing the salient features of the financial statement of Company''s subsidiaries/joint ventures or associate companies in Form AOC - 1 in "Annexure I" to this report.

Pursuant to Rule 8(5) (iv) of the Companies (Accounts) Rules, 2014, the names of the companies which have become or ceased to be the subsidiaries, joint ventures or associate companies during the year are provided in "Annexure II" to this report.

The policy for determining Material Subsidiaries formulated by the Board of Directors is disclosed on the Company''s website and is accessible on https://www.techmahindra.com/sites/ResourceCenter/ brochures/investors/corporategovernance/policy-For-determining-Material-Subsidiaries.pdf

HUMAN RESOURCES

During 2017-18, your Company focused on unlocking experiences for a connected future and deliver an enterprise of Future. Along with establishing as DT (Digital Transformation) provider, your Company has also taken a step towards being a social enterprise. Your Company''s mission is to attain growth while respecting and supporting the stakeholder network. The Company aims to be the organization that will shoulder the responsibility of being a good citizen, inspire associates and be role model for peers. With the intent of future proofing the associates and preparing them for future, your Company has embarked on journey of FUTURise that ensures continuous learning, unlearning, re-learning, and contribution to innovation for our customers. Increasing number of enterprises are embracing new technologies like Digital, Automation, Cloud, Augmented Reality to provide enhanced user experience, the need to transform skillset of IT workforce is prominent than ever. Your Company is investing heavily in re-skilling and up-skilling its associates to enable them to RISE™ to future challenges and opportunities and achieve customer delight.

Building Future ready workforce and Continuous Learning Organization

Your Company has launched ''DEXT'' - a cloud based new age learning platform to facilitate an Integrated, Social, Personalized and Device Agnostic Learning experience for its associates and building a continuous learning organization. Further, your Company has partnered with some of the best in industry players like edX, Pluralsight, SumTotal and new age AI based learning platforms to provide world-class learning experience to its associates and accelerate their learning.

The ''Role Based Academy'' provides a structured, holistic approach to building role based competencies for critical and new age roles in the organization and provide career path to the associates. Your Company has trained and certified 80,000 associates in digital technologies, 20,000 associates in automation and trained 50,000 associates in emerging and digital technologies. This focus has positioned your Company to service leading global Enterprises in their transformation journey and enhance growth and profitability. Emphasizing on the new age learning methods and platforms, your Company has launched the Reverse Mentoring program, where Gen Y/Z grooms Leadership on new age practices and tools. Your organization has taken steps in the direction of building a workplace of future by building UVO, a chat bot that is always available for instant query resolution, handle transactions and acts as your virtual office assistant.

Skill building through job adjacency in the form of eXtra Mile platform allows the associates to opt for small assignments posted pan organization and utilize their skills for the benefit of the assigned project. Career counseling platform provides guidance by experienced leaders when lacking direction or clarity.

In order to keep the associates aligned to the digital mission of the organization - Mission 2020, your Company has been continuously hosting conclaves like Mission Innovation and TechM NXT that allows Tech Mighties to express their views about the big bets and trends of the world, connect with internal and external stakeholders, co-create new age ventures and also celebrate the realization of ideation. Iris, Appify, helped spark the entrepreneurial spirit among associates of the Company. In order to reach out to the multicultural and diverse workforce your Company has embarked on the journey of Gasification and launched Career Turbo for career exploration and Rise with Dice to help ingrain the culture.

Rewarding and Recognizing

Your Company believes that timely appreciation remains key to creating a happy organization and recognized over 45,000 Tech Mighties through multiple channels. In line with the digitization focus, the entire Reward and Recognition process is digital and associates share their rewards and pride on their respective social networks.

Strive, Sustain and Safety

Your Company took various steps to ensure the safety and work-life balance of associates working at Tech Mahindra. The Associate Welfare Trust established for the associates, by the associates, helped associates and their family members in their medical exigencies. Company''s Mantra of "Wellness before Business" is reflected in the medical camps, wellness programs, work from home facility and numerous other facilities across all the large campuses. Your Company has established a robust Emergency contact process with toll free numbers across India, US, UK, and Australia and conducted self-defence training sessions across many locations.

During the year under review, Tech Mahindra''s people practices, policies and programs have been awarded in various external forums representing members from not just the Information Technology industry but the entire spectrum of the corporate world. Some of the awards/accomplishments during FY 2017-18 are -

- Society for Human Resource Management - HR Excellence 2017 in Learning and Development (runner up) and Employer with Best Health and Wellness initiatives.

- Business World HR Award in HR Technology 2017

- Featured in AVTAR - 100 Best Companies of 2017 Working Mother and AVTAR Best Companies for Women in India.

- Featured in HR Asia Best Companies To Work For In Asia 2017 - Malaysia

- Excellence in Workplace Diversity Award at Mercer NDTV Employer Excellence Awards 2017.

These awards and recognitions have positioned Tech Mahindra as an organization that puts people first, delivers future focused excellence in the field of People Management and recognizes the importance of human capital as a key driver of business growth.

QUALITY

Your Company continues its focus on quality and strives to exceed customer expectations at all times. It is certified under various standards to meet client demands and enhance value delivery - Successfully assessed for, ISO 9001:2015, ISO 20000:2011, ISO 27001: 2013, TL9000 R 5.5, ISO 13485, AS9100 (Standard for Aerospace domain - scope of certification limited to the aerospace business within Tech Mahindra). In addition to these, your Company also maintains its commitment to health, safety and environment by continually improving its processes in accordance with ISO 14001 and OHSAS 18001 standards. Your Company is also certified on ISO 22301:2012 (Societal Security) and has a comprehensive Business Continuity and Disaster Recovery framework, to prevent potential business disruptions in the event of any disaster. It has processes that will help resume services to customers'' acceptable service levels. Automated Service Desk with SLAs for enabling business and Vulnerability Assessment and Penetration Testing Lab for secured corporate network operations are highlights showcasing information security posture of the Organization.

Tech Mahindra (IT Division) has been assessed for implementation of high maturity business excellence practices'' at Mahindra Group (Services Sector). It has been assessed at TMW Maturity Stage 5 (on scale of 1-10 stages) of Mahindra Business Excellence Framework - The Mahindra Way. These certifications are testimony of the robustness of business processes and at large the quality culture imbibed in the organization.

Your Company has also strengthened Process/Practice and Tools Industrialization of various Engineering activities for Development, Testing and Managed service portfolio to achieve standardization, better efficiency and best practices being implemented across the businesses.

Your Company has continued to strengthen the process for transforming Quality Assurance processes to New Age Delivery processes with focus to achieve better customer experience and faster quality delivery; these are measured and monitored through various indices.

One such initiative is "Execution Excellence Index" focusing on achieving high project maturity, improved tools usage and standardization, knowledge management and performance on key business metrics, in order to strengthen further the Business Excellence in what we deliver to the customers, thereby achieve better Customer satisfaction. Your Company is putting all the initiatives in place in order to ensure the Company delivers as stated in Quality Policy.

DIRECTORS

During the year under review all Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations And Disclosure Requirements) Regulations, 2015.

Pursuant to the provisions of Section 152(6)(c) of the Companies Act, 2013, Mr. Vineet Nayyar, Director (DIN: 00018243) is liable to retire by rotation and does not offer himself for reappointment. The Board has decided, not to fill the vacancy caused by retirement of Mr. Vineet Nayyar.

Mr. Vineet Nayyar served on your Board since January 17, 2005. He served as Managing Director & CEO till August 10, 2012. Mr. Vineet Nayyar was appointed as Executive Vice Chairman with effect from August 10, 2012 till August 10, 2015. Thereafter, he continued as Vice Chairman.

Mr. Vineet Nayyar is one of the strongest pillars in the Tech Mahindra success story. The Board places on record its sincere appreciation for the valuable advice and guidance of Mr. Vineet Nayyar during his tenure as a Director on the Board.

Training & Familiarization Programme

The Company has laid down a policy on training for Independent Directors as part of the governance policies.

The Board Members are regularly updated on changes in Corporate and allied laws, Taxation laws & matters thereto. MD & CEO along with Senior Leadership conducts an exclusive quarterly session for the Board Members sharing updates about the Company''s business strategy, operations and the key trends in the IT industry relevant for the Company. These updates help the Board Members to keep themselves abreast with the key changes and their impact on the Company.

The details of programmes for familiarization of the Independent Directors with the Company are available on the Company''s website and can be accessed at the we blink; https://www.techmahindra. com/sites/ResourceCenter/brochures/investors/ corporategovernence/Familiarization-Programme-to-Independent-Directors.pdf

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Regulation 19 read with Schedule II, Part D of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has devised a policy on evaluation of performance of Board of Directors, Committees and Individual directors. Accordingly, the Chairman of the Nomination and Remuneration Committee obtained from all the board members duly filled in evaluation templates for evaluation of the Board as a whole, evaluation of the Committees and peer evaluation. The summary of the evaluation reports was presented to the respective Committees and the Board for their consideration.

Policy on Directors'' Appointment and Remuneration

The Governance policies laid down by the Board of Directors of your Company include:

i. Policy on appointment and removal of Directors, Key Managerial Personnel and Senior Management

ii. Policy on remuneration to the Directors, Key Managerial Personnel and Senior Management and other Employees

The extract of these two policies are provided in "Annexure III".

SUCCESSION PLAN

In accordance with the principles of transparency and consistency, your Company has adopted governance policies for Board of Directors, KMP & Senior Management appointments, remuneration & evaluation. These governance policies inter alia outline Succession Planning for the Board, Key Managerial Personnel and Senior Management.

Key Managerial Personnel (KMPs)

Pursuant to provisions of Section 203 of the Companies Act, 2013, Mr. C. P. Gurnani, Managing Director & Chief Executive Officer, Mr. Milind Kulkarni, Chief Financial Officer and Mr. Anil Khatri, Company Secretary & Compliance Officer were the Key Managerial Personnel of the Company during the year.

Mr. Milind Kulkarni is superannuating on May 31, 2018 as Chief Financial Officer of the Company. Mr. Manoj Bhat is appointed as Chief Financial Officer of the Company w.e.f. June 1, 2018.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, your Directors, based on the representation(s) received from the Operating Management and after due enquiry, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. they have selected such accounting polices and these have been applied consistently and, reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for the year ended on that date;

iii. proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts have been prepared on a going concern basis;

v. they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

vi. the proper systems to ensure compliance with the provisions of all applicable laws are in place and are adequate and operating effectively.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has internal financial controls which are adequate and were operating effectively. The controls are adequate for ensuring the orderly & efficient conduct of the business, including adherence to the Company''s policies, the safe guarding of assets, the prevention & detection of frauds & errors, the accuracy & completeness of accounting records and timely preparation of reliable financial information.

STATUTORY AUDITORS

The members, in the 30^th Annual General Meeting held on August 1, 2017, appointed M/s. B S R & Co. LLP, Chartered Accountants, [Firm''s Registration No. 101248W/W-100022] as the Statutory Auditors (''BSR'') of the Company, to hold office for a term of five years from the conclusion of the 30^th Annual General Meeting (AGM) of the Company held in the financial year 2017-18 until the conclusion of the AGM of the Company for the financial year 2021-22 on such remuneration as may be determined by the Board of Directors.

Pursuant to the amendment to Section 139 of the Companies Act, 2013 which was notified on May 7, 2018, ratification of appointment of Statutory Auditors at every AGM is no longer required.

There are no qualifications, reservation or adverse remark or disclaimer made in the audit report for the Financial Year 2017-18.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Dr. K. R. Chandratre, Practicing Company Secretary, Pune to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is provided as "Annexure IV". There are no qualifications, reservation or adverse remark or disclaimer made in the Secretarial Audit Report.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with the applicable Secretarial Standards.

EXTRACT OF THE ANNUAL RETURN

Pursuant to the provisions of Section 134(3) (a) of the Companies Act, 2013, the extract of the Annual Return in Form MGT-9 is attached as "Annexure V".

MANAGERIAL REMUNERATION

Disclosures of the ratio of the remuneration of each director to the median employee''s remuneration and other details as required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time, are provided in "Annexure VI".

None of the directors or Managing Director of the Company, received any remuneration or commission from Subsidiary Companies of your Company.

The details of remuneration paid to the Directors including the Managing Director of the Company are given in Form MGT-9 forming part of the Directors Report.

PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Companies Act, 2013 ("the Act") read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. However, pursuant to first proviso to Section 136(1) of the Act, this Report is being sent to the Shareholders excluding the aforesaid information. Any shareholder interested in obtaining said information, may write to the Company Secretary at the Registered Office / Corporate Office of the Company and the said information is open for inspection at the Registered Office of the Company.

PREVENTION OF SEXUAL HARASSMENT POLICY

Your Company laid down Prevention of Sexual Harassment policy and it is made available on the website of the Company. The Company has zero tolerance on Sexual Harassment at workplace. During the year under review there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

EMPLOYEE STOCK OPTION SCHEMES

During the year under review, there were no material changes in the Employee Stock Option Schemes (ESOPs) of the Company and the Schemes are in compliance with the SEBI Regulations on ESOPs. As per Regulation 14 of SEBI (Share Based Employee Benefits) Regulations, 2014 read with SEBI circular dated June 16, 2015 the details of the ESOPs are uploaded on the Company''s website; https://www. techmahindra.com/sites/Resource Center/brochures/ investors/corporate governance/Details-of-ESOPs.pdf

The Board of Directors have approved a new Employee Stock Option Scheme viz. "Employee Stock Option Scheme 2018", earmarking 50,00,000 Options to be granted to the employees exercisable into equity shares. This is forming part of the Notice of the ensuing Annual General Meeting for approval of shareholders.

CORPORATE GOVERNANCE

A report on Corporate Governance covering among others composition, details of meetings of the Board and Committees along with a certificate for compliance with the conditions of Corporate Governance in accordance with the Securities and Exchange Board of India (Listing Obligations And Disclosure Requirements) Regulations, 2015, issued by the Statutory Auditors of the Company, forms part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of your Company''s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

RISK MANAGEMENT

The Risk Management Committee of the Board of Directors periodically reviews the Risk Management framework, identifies risks with criticality and mitigation plan. The elements of risk as identified for the Company with impact and mitigation strategy are set out in the Management Discussion and Analysis Report (MDA).

ESTABLISHMENT OF VIGIL MECHANISM

Your Company has laid down Whistle Blower Policy covering Vigil Mechanism with protective clauses for the Whistle Blowers. The Whistle Blower Policy is made available on the website of the Company.

DEPOSITS / LOANS & ADVANCES, GUARANTEES OR INVESTMENTS

Your Company has not accepted any deposits from the public during the year under review. The particulars of loans/advances, guarantees and investments under Section 186 of the Companies Act, 2013 are given in the notes forming part of the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All transactions entered into with Related Parties as defined under Section 2(76) of the Companies Act, 2013 and Regulation 23 of the Securities and Exchange Board of India (Listing Obligations And Disclosure Requirements) Regulations, 2015, ("The Listing Regulations"), during the financial year were in the ordinary course of business and at an arm''s length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no transactions with related parties in the financial year which were in conflict with the interest of the Company and requiring compliance of the provisions of Regulation 23 of the Listing Regulations. Suitable disclosure as required by the Indian Accounting Standards (Ind AS 24) has been made in the notes forming part of the Financial Statements.

The Company has formulated a policy on materiality of Related Party Transactions and dealing with Related Party Transactions which has been uploaded on the Company''s website; https://www.techmahindra.com/sites/ Resource Center/Brochures/investors/corporate governance / Related-Party-Transactions-Policy.pdf

The particulars of related party transactions in prescribed Form AOC - 2 are attached as "Annexure VII".

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the

Companies (Accounts) Rules, 2014 are provided in "Annexure VIII" which forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR vision of your Company is "Empowerment through Education."

In compliance with the guidelines prescribed under Section 135 of the Companies Act, 2013, your Company constituted a Corporate Social Responsibility (CSR) Committee. Your Board of Directors laid down the CSR Policy, covering the Objectives, Focus Areas, Governance Structure and Monitoring & Reporting Framework among others. The policy is available at https://www.techmahindra.com/society/default.aspx.

Your Company''s social initiatives are carried out by Tech Mahindra Foundation and Mahindra Educational Institutions.

TECH MAHINDRA FOUNDATION (TMF)

The Foundation was set up in 2007, as a Section 25 Company (referred to as a Section 8 Company in the Companies Act, 2013). Since then, it has worked tirelessly towards the vision of "Educated, skilled and able women and men are a country''s true strength", establishing itself as a prominent CSR player within the Mahindra Group as well as a leading social organization at the national level. The Foundation essentially works with children and youth from urban, disadvantaged communities in India. During the year under review, Tech Mahindra Foundation has successfully steered 160 high-impact projects with 90 partners, reaching out to 150,000 children and youth across these locations.

The key initiatives in the School Education include:

All Round Improvement in School Education (ARISE)

Tech Mahindra Foundation''s educational initiatives under ARISE are long-term school improvement programmes, in partnership with local governments and partner organizations. The Foundation has adopted 60 schools across India and is working with 18 partners to turn them around completely into model schools of excellence. ARISE initiatives encompass educational empowerment programmes for children with disabilities.

Shikshaantar

Shikshaantar, envisioned as a programme for enhancing capacity of government school teachers, has taken rapid strides during the year. TMF has been working with the East Delhi Municipal Corporation to manage its In-Service Teacher Education Institute (ITEI), where teachers from nearly 400 primary schools receive quality training on a regular basis. In addition, the Foundation has also worked with Municipal Corporations in Chennai, Bengaluru, Hyderabad, Pune & Thane for strengthening capacities of government school teachers.

Employability

Skills for Market Training (SMART) is the Foundation''s flagship programme in employability. It is built on the vision of an educated, enlightened and employed India, and a belief that educated and skilled youth are the country''s true strength. The programme started with 3 Centres in 2012 and is currently running 100 Centres at 11 locations across India. These include SMART Centres, SMART Centres (training for people with disabilities), and SMART-T Centres (training in technical trades).

In 2017-18, your Company trained more than 16,000 young women and men under its SMART programme. More than 70% of the graduates are placed in jobs upon successful completion of the training, across multiple industries.

The Foundation has partnered with the Banasthali University for Women in Rajasthan for setting up of the Tech Mahindra College of Nursing. The College will start offering Bachelor’s and Master''s Degree Programs in Nursing.

MAHINDRA EDUCATIONAL INSTITUTIONS (MEI) Technical Education

Your Company''s initiatives in technical education are carried out through Mahindra Educational Institutions (MEI), under which the Company has extended infrastructural and operational support to Mahindra Ecole Centrale, a state of-the-art technical institution in Hyderabad.

Mahindra Ecole Centrale (MEC), College of Engineering, established by Tech Mahindra in collaboration with Ecole Centrale Paris (now Centrale Supelec) and Jawaharlal Nehru Technological University, Hyderabad is set to deliver its first batch of graduates this year, after a successful four year presence on the technical education landscape of the country, characterized by its rising popularity.

This high impact, Indo-French collaboration in engineering education has emerged as a disruptive player with its keen focus on Industry-aligned and industry-sponsored education; all Ph.D. faculty roster, global internships and a distinct curriculum that includes the French language.

The Executive Council of MEC features leaders both from Tech Mahindra and the Mahindra Group. The

MEC campus, surrounded by the sprawling green Tech Mahindra Technology Centre in Hyderabad, India, is equipped with state-of-the-art academic infrastructure. To support its strong research vision MEC has set up relevant high technology laboratories for learning, media, design thinking and research.

MEC has hosted many of the Company''s customers on their visit to Tech Mahindra Technology Center (TMTC), Hyderabad. The customers express surprise and delight at the presence of MEC and its pedagogy aimed at shaping world class engineers, with global relevance and a strong European influence.

The Annual Report on CSR activities is provided as "Annexure IX".

SUSTAINABILITY

As a responsible business entity, Tech Mahindra concentrates on integrating sustainability into all aspects of the business and develop strategies for Environmental, Social and Governance (ESG) dimensions. The Company has defined strategies to leverage sustainable opportunities to create value for its stakeholders and help emerge as a more efficient organization with increasingly optimized business processes. With a structured stakeholder programme the Company has been able to design strategies and initiatives to build solutions which not just improve its sustainability credentials but reinforce the overall business philosophy too.

The Company''s responsibilities and emphasis on its green eco-system is seen through various energy, water and waste reduction initiatives that have helped cut down carbon emissions, made it more energy-efficient and help mitigate its environmental impact. Tech Mahindra is moving towards carbon neutrality through various Sustainability initiatives and best practices. The Company is striving to reduce the carbon footprint by installing solar modules, retrofitting LEDs, installing motion sensors, using star rated equipment and recycling waste water. The Company has digitalized internal communications with virtual meetings through tele/audio conferencing, which brings down meeting-related travel and other costs considerably. Your Company is investing in Green Solutions like smart grid, smart cities, smart waste management systems and electric vehicle charging systems. Your Company is also working with suppliers and vendors to cut down on logistics and transportation and thus reduce the emissions.

The recent leadership position and achievements across platforms encourage us to strive for excellence and aim even higher.

Few of the recognitions bestowed upon are:

- Recognized as World Leader for Supplier Engagement on Climate Change 2018 by CDP-the only Indian Company on this Leader Board

- Member of DJSI World Index for 2017- one amongst the only 4 Indian companies to be listed

- One of the 11 Indian Companies who are part of the DJSI Emerging Markets category

- Listed as a ''Rising Star'' in the CDP''s India Leaders 2017

- Silver Class distinction for excellent sustainability performance in the RobecoSAM 2018 Sustainability Yearbook

- Constituent of the FTSE4Good Emerging Index 2017

Tech Mahindra developed its first Integrated Report last year which is externally assured in accordance with Global Reporting Initiatives (GRI Guidelines) the latest guidelines of the internationally accepted Global Reporting Initiative (GRI) and CDSB format. The detailed reports can be accessed at https://www. techmahindra.com/company/Sustainability.aspx

AWARDS AND RECOGNITION

Your Company continued its quest for excellence in its chosen area of business to emerge as a true global brand. Several awards and rankings continue to endorse your Company as a thought leader in the industry. The Awards / recognitions received by the Company during the year 2017-18 include:

- Digital Transformation Service Provider of the Year - Telecom 2017 from Frost and Sullivan

- CP Gurnani wins the Digital Warrior award from IMC

- Tech Mahindra Performance Engineering wins IT Europa Award for "Storage/Information Management Solution of the Year"

- Recognized as a Most Honoured Company by the Institutional Investor''s 2017 All-Asia (ex-Japan) Executive Team rankings

- Oracle ASEAN Digital Transformation Partner

- Frost & Sullivan Digital Transformation Award

- Tech Mahindra recognized at SHRM Awards 2017

- Tech Mahindra retains ranking in Dow Jones Sustainability Index 2017

- Features in 100 Best organizations in 2017 Working Mother & AVTAR Best Companies for Women in India

- Business World HR Excellence Award In Technology & Learning

- Best Company in terms of Information Security Implementation at the IT Innovation & Excellence Awards 2017 in the Annual Technology Conference held by CSI (Computer Society of India)

- BlockChain solution for State Bank of India wins the SKOCH Award 2017

- Recognized amongst world''s top 100 technology companies by Thomson Reuters

- 2018 AT&T Supplier Award for its outstanding performance and service to AT&T affiliates

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the contributions made by employees towards the success of your Company. Your Directors gratefully acknowledge the co-operation and support received from the shareholders, customers, vendors, bankers, regulatory and Governmental authorities in India and abroad.

For and on behalf of the Board

Place: Mumbai Anand G. Mahindra

Date: May 25, 2018 Chairman

---

Mar 31, 2018

To,

The Members of

Mahindna & Mahindra Financial Services Limited

The Directors are pleased to present their Twenty-Eighth Report together with the audited financial statements of your Company for the Financial Year ended 31st March, 2018.

The performance highlights and summarised financial results of the Company are given below:

PERFORMANCE HIGHLIGHTS

Consolidated income for the year increased by 19% to Rs. 8,573.5 Crores as compared to Rs. 7,200.7 Crores in 2016-17;

Consolidated income from operations for the year was Rs. 8,533.1 Crores as compared to Rs. 7,146.2 Crores in 2016-17, a growth of 19%;

Consolidated profit before tax for the year was Rs.1,661.7 Crores as compared to Rs. 837.8 Crores in 2016-17;

Consolidated profit after tax and minority interest for the year was Rs. 1,023.9 Crores as compared to Rs.511.6 Crores in 2016-17.

FINANCIAL RESULTS

Rs. in Crores

	CONSOLIDATED		STANDALONE
	March 2018	March 2017	March 2018	March 2017
Total Income	8,573.5	7,200.7	7,206.1	6,237.5
Less : Finance Costs	3,426.3	3,186.2	3,000.4	2,857.4
Expenditure	3,481.0	3,123.0	2,853.7	2,714.0
Depreciation/Amortisation	55.2	53.7	44.2	46.0
Total Expenses	6,962.5	6,362.9	5,898.3	5,617.4
Profit Before Exceptional Items and Taxes	1,611.0	837.8	1,307.8	620.1
Exceptional Items (net) - income / (expense)	50.7	-	65.0	-
Profit Before Tax	1,661.7	-	1,372.8	-
Less : Provision For Tax
Current Tax	676.3	463.5	543.1	363.5
Deferred Tax	[66.0]	(155.4)	(62.2)	[143.6]
Profit After Tax for the Year before Minority Interest	1,051.4	529.7	891.9	400.2
Less : Minority Interest	27.5	18.1	-	-
Profit After Tax for the Year after Minority Interest	1,023.9	511.6	891.9	400.2
Add : Amount brought forward from Previous Years	2,850.5	2,522.4	2,489.0	2,240.5
Less: Corporate Dividend and Dividend Distribution Tax	164.3	2.8	161.0	-
Less: Transitional charge in respect of Mark to Market loss on derivative transactions	-	5.1	-	5.1
Amount available for Appropriation	3,710.1	3,026.1	3,219.9	2,635.6
Appropriations
General Reserve	88.4	40.0	89.2	40.0
Statutory Reserve	224.3	109.1	178.4	80.1
Debenture Redemption Reserve	50.5	26.5	50.5	26.5
Surplus carried to Balance Sheet	3,346.9	2,850.5	2,901.8	2,489.0

TRANSFER TO RESERVES

The Company proposes to transfer an amount of Rs. 89.2 Crores to the General Reserve, Rs.178.4 Crores to the Statutory Reserve and Rs.50.5 Crores to the Debenture Redemption Reserve. An amount of Rs.2,901.8 Crores is proposed to be retained in the Statement of Profit and Loss.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 4 per Equity Share of the face value of Rs. 2 each payable to those Members whose names appear in the Register of Members as on the Book Closure date. The dividend including dividend tax for the Financial Year 2017-18 will absorb a sum of Rs. 293.8 Crores [as against 161.0 Crores on account of dividend of Rs. 2.4 per Equity Share and tax thereon, paid for the previous year].

DIVIDEND DISTRIBUTION POLICY

The Board of Directors at its Meeting held on 25th October, 2016, approved and adopted the Dividend Distribution Policy, containing the requirements prescribed in Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Policy is appended as Annexure I and forms part of this Annual Report.

The Dividend Distribution Policy can also be accessed on the Company’s website at the web-link http://www.mahindrafinance.com/policies.aspx.

During the year, an amount of Rs.3,39,065 being the unclaimed/unpaid dividend of the Company for the Financial Year ended 31st March, 2010 was transferred in September, 2017 to the Investor Education and Protection Fund Authority.

OPERATIONS

After three years of subdued rural consumption, there were increasing signs of rural growth recovery with catalysts driving the awaited revival in rural demand. While two successive years of normal monsoon portend well for farm output, the combination of Minimum Support Price (MSP) hikes, direct benefit transfers and farm loan waivers contributed to disposable incomes. The rural sentiments turned positive and the Company did see an improvement in its performance, both in sales as well as overall collections.

Being largely engaged in the semi-urban and rural areas of the country, major part of the Company’s collection is in cash. Your Company however continues to educate its customers to adopt digital and online modes of repayment including Unified Payments Interface (UPI) and Aadhaar Enabled Payment System (AEPS).

While fulfilling its mission of Financial Inclusion, your Company has also built a deep knowledge of customers with micro-data points ranging from income, payment behaviours, socio-economic status and other indirect data. The Company is successfully mining this data to build powerful analytics models extended through digital platforms for customer acquisition, collections, NPA management, customer engagement, forecasting business trends, etc. Your Company has also successfully integrated India Stack capabilities like eKYC, eSign, etc., and digital payment channels in its platforms to serve customers even in low-connectivity remote locations. Among the early adopters of blockchain technology, your Company has in the year under review, launched a vendor financing platform powered by blockchain. This cloud based application is one of the first such blockchain-enabled projects in South Asia, outside of traditional banking.

Your Company remains a significant financier to its customers in rural and semi-urban geographies by providing a wide range of easy and affordable products and services. Your Company consolidated its position as a leading financier in all Aggregator and Self-drive vehicles segment. Your Company expanded vide its channel connect with leading car dealers, and yet again emerged as a major financier for Maruti vehicles in semi-urban and rural India during this fiscal. Your Company has retained its leadership position in financing the Mahindra range of vehicles and tractors in addition to extending its lending to vehicles of other Original Equipment Manufacturers (OEMs) and also continued to be the preferred financier for Hyundai, Renault and Nissan range of vehicles.

Your Company further expanded its geographical presence by reaching out to untapped villages and increased its footprint by opening new branches and making it more accessible to its customers. New financial products and services were introduced during the year, to meet various lifecycle needs of its customers and your Company focused on building additional skill sets and digital capabilities to meet such requirements. Your Company has also enhanced the offerings in-used tractor financing and agri-implements, thereby playing a key role in farm mechanisation across the country.

Your Company strengthened its pan-India presence with a network of 1,284 offices, which is one of the largest amongst Non-Banking Financial Companies. In addition to these offices, your Company has during the year under review, set up over 200 smart branches at dealerships of OEMs and works closely with dealers and customers. Your Company’s nationwide network of branches and locally recruited employees have facilitated in catering to the diverse financial requirements of its customers by identifying and understanding the needs and aspirations of the people.

With its strong presence covering even the most remote areas of the country, your Company is providing flexible financing opportunities to aspiring individuals to realise their dreams and helping them to ‘RISE’. Your Company believes that incessantly serving its customers and channel partners and enhancing customer relationship is the starting point of a great successful journey.

Your Company has earned the trust and confidence of its customers with its consistent, transparent and reliable services and as a result, customer satisfaction across its network continues to remain high. Your Company has cumulatively financed the aspirations of over 5.3 million customers since its inception, most of whom had no prior credit history. Your Company’s philosophy of helping rural customers by providing easy finance at their doorstep has given a big boost in transforming rural lives.

During the year under review, your Company continued to expand its reach in the Micro Small and Medium Enterprises (MSME) segment. MSME Assets Under Management crossed more than Rs. 4,988.04 Crores during the period under review, covering 3,017 customers.

In the year under review, the effect of demonetisation has substantially come down with improved availability of currency notes. Further with the stabilization of the Goods and Services Tax (GST) the temporary downward impact witnessed during the roll-out has been adequately addressed.

The overall disbursement registered a growth of 19% at Rs. 31,659.1 Crores as compared to Rs. 26,706.3 Crores in the previous year. Total Income grew by Rs. 968.6 Crores to Rs.7,206.1 Crores for the year ended 31st March, 2018 as compared to Rs.6,237.5 Crores for the previous year. Profit Before Tax (PBT) grew by Rs.752.6 Crores to Rs.1,372.7 Crores as compared to Rs. 620.1 Crores for the previous year. Profit After Tax (PAT) increased by Rs. 491.7 Crores to Rs.891.9 Crores as compared to Rs.400.2 Crores in the previous year

During the year under review, the Assets Under Management stood at Rs. 55,101 Crores as at 31st March, 2018 as against Rs. 46,776 Crores as at 31st March, 2017, a growth of 18%.

There is no change in the nature of business of the Company during the year under review.

DISTRIBUTION OF MUTUAL FUND PRODUCTS

During the year under review, the activity of distribution of Mutual Fund Products (MFP) was carried out across 161 branches covering 23 States.

As on 31st March, 2018, the amount of Assets Under Management outstanding through the Company’s Distribution Services on MFP aggregate of institutional and retail segment, was Rs. 2,331.40 Crores and the number of clients stood at 59,506.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of the Company’s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

CORPORATE GOVERNANCE

Your Company practices a culture that is built on core values and ethical governance practices. Your Company is committed to transparency in all its dealings and places high emphasis on business ethics. A Report on Corporate Governance along with a Certificate from the Statutory Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated in Regulations 17 to 27, clauses (b) to (i) of sub-regulation (2) of Regulation 46 and paragraphs C, D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements] Regulations, 2015, forms part of the Annual Report.

SHARE CAPITAL

During the year under review, your Company received the approval of its shareholders to issue upto 2.5 Crores Equity Shares by way of Preferential Allotment to its promoter, Mahindra & Mahindra Limited (“Promoter”) and upto 2.4 Crores Equity Shares by way of Qualified Institutions Placement (“QIP”) and successfully raised a total of Rs. 2,111 Crores through the above issuances made to both its Promoter and a mix of domestic and international Qualified Institutional Buyers.

Preferential Allotment

The Company made a preferential allotment of 2,50,00,000 Equity Shares on 30th November 2017, to its holding company, Mahindra & Mahindra Limited at a price of Rs.422 per Equity Share, including a premium of Rs. 420 per Equity Share, raising a sum of Rs.1,055 Crores.

Qualified Institutions Placement (QIP)

On 7th December, 2017, your Company successfully concluded the QIP issue to Qualified Institutional Buyers aggregating Rs. 1,056 Crores through the issue of 2,40,00,000 Equity Shares of the Face Value of Rs. 2 each at an issue price of Rs. 440 per Equity Share including a premium of Rs. 438 per Equity Share, which is a premium to the price of Rs. 439.63 per share, arrived at as per Regulation 85 of Securities and Exchange Board of India [Issue of Capital and Disclosure Requirements] Regulations, 2009. The QIP launched by your Company received an overwhelming response, as seen by the issue being subscribed multiple times and the strong participation from renowned International and Domestic Institutional Investors.

Consequent to the Preferential Allotment and QIP the issued, subscribed and paid-up Equity Share Capital of the Company stood at Rs.123.55 Crores as at 31st March, 2018, comprising of 61,77,64,960 Equity Shares of the face value of Rs. 2 each, fully paid-up.

With the Promoter maintaining majority shareholding, your Company continues to benefit by leveraging the financial and operational synergies with its Promoter and with the simultaneous QIP issuance, it has been able to diversify its investor base.

Your Company has duly utilised the issue proceeds raised through the Preferential Issue and QIP to augment its long-term resources for meeting business growth and funding requirements, strengthen its capital adequacy, make investments in its Subsidiaries and Joint Venture, for other general corporate purposes and for payment of Issue expenses. This is in line with the issue purpose mentioned in the Explanatory Statement of the Notice of the Extraordinary General Meeting dated 1st November, 2017 and the Placement Document filed with various Regulatory Authorities. Details of these Issues and the end use of funds were furnished to the Audit Committee.

During the year under review, your Company has neither issued shares with differential rights as to dividend, voting or otherwise, nor has issued sweat equity, other than Employee Stock Options under the Employees’ Stock Option Scheme referred to in this Report, during the year under review.

As on 31st March, 2018, none of the Directors of the Company holds instruments convertible into Equity Shares of the Company.

STOCK OPTIONS

During the year under review, on the recommendation of the Nomination and Remuneration Committee of your Company, the Trustees of the Mahindra & Mahindra Financial Services Limited Employees’

Stock Option Trust have granted 62,130 Stock Options to Eligible Employees under the Mahindra & Mahindra Financial Services Limited Employees’ Stock Option Scheme-2010 [“2010 Scheme”]. No new Options have been granted under the Mahindra & Mahindra Financial Services Limited Employees’ Stock Option Scheme-2005 [“2005 Scheme”] [hereinafter collectively referred to as “the Schemes”]. The Company does not have any scheme to fund its employees to purchase the shares of the Company. No employee has been issued stock options during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant.

The Schemes of the Company are in compliance with the Securities and Exchange Board of India [Share Based Employee Benefits] Regulations, 2014 [“SBEB Regulations”] and there were no material changes made to the said Schemes. Messrs. B S R & Co. LLP, Chartered Accountants, Statutory Auditors of the Company, have certified that the abovementioned Schemes have been implemented in accordance with the SBEB Regulations, and the Resolutions passed by the Members for the 2005 Scheme and the 2010 Scheme. The Certificate would be placed at the Annual General Meeting for inspection by Members.

Voting rights on the Shares issued to employees under the aforesaid Schemes are either exercised by them directly or through their appointed proxy.

The details of the Employees’ Stock Options and the Company’s Employees’ Stock Option Trust as required under the SBEB Regulations read with SEBI Circular CIR/CFD/ POLICY CELL/2/2015 dated 16th June, 2015 have been uploaded on the Company’s website and can be accessed at the web-link: http://www. mahindrafinance.com/annual-reports.aspx.

ECONOMY

Global

At 3.8 percent, global growth last year was 0.5 percentage point faster than in 2016 and the strongest since 2011. Two-thirds of countries accounting for about three-fourths of global output experienced faster growth in 2017 than in the previous year [the highest share of countries experiencing a year-over-year growth pickup since 2010]. The preliminary outcome for global growth in 2017 was 0.2 percentage point stronger than forecast, in the October 2017 World Economic Outlook [WEO], with upside surprises in the second half of 2017 in advanced as well as emerging markets and developing economies.

Resurgent investment spending in advanced economies and an end to the investment decline in some commodity exporting emerging markets and developing economies were important drivers of the uptick in global GDP growth and manufacturing activity. Across advanced economies, the 0.6 percentage point pickup in 2017 growth relative to 2016 is explained almost entirely by investment spending, which remained weak since the 2008-09 global financial crisis and was particularly subdued in 2016. Both stronger gross fixed capital formation and an acceleration in stock building contributed to the pickup in investment, with accommodative monetary policy, stronger balance sheets, and an improved outlook helping release pent-up demand for capital goods.

Global growth is projected to strengthen from 3.8 percent in 2017 to 3.9 percent in 2018 and 2019, driven by a projected pickup in growth in emerging markets and developing economies and resilient growth in advanced economies. The forecast for 2018 and 2019 is stronger than in the October 2017 WEO by 0.2 percentage point for each year, with positive revisions compared with the October 2017 WEO for emerging markets and developing economies and especially for advanced economies. The global effects of US fiscal policy changes account for almost half of the global growth upgrade for 2018-19 compared with October. Beyond 2019, global growth is projected to gradually decline to 3.7 percent by the end of the forecast horizon. The slowdown is entirely because of advanced economies, where growth is projected to moderate in line with their modest potential growth; growth across emerging markets and developing economies is expected to stabilize close to the current level. (Source: IMF)

Domestic

Domestic economic activity shrugged off the loss of speed that had characterised the period Q1:2016-17 to Q1:2017-18 and a turning point appears to have taken hold in Q2-Q3, with lead indicators pointing to further acceleration in Q4. In terms of aggregate demand, the drivers around this inflexion are shifting, with consumption-led growth of the recent past handing over the baton to investment, which had restrained growth since Q3:2016-17. At the same time, the strong impetus from fiscal spending during Q3:2016-17 to Q1:2017-18 appears to be waning and the rapid pace of import growth is sapping net external demand. On the supply side, the pickup in industrial output from Q2:2017-18 and the strengthening of construction activity in the services sector from Q1 are noteworthy. Meanwhile, agriculture and allied activities have turned out to be resilient to temporary weather disruptions in both kharif and rabi sowing seasons and going by recent estimates of foodgrains production, the outlook appears better than before.

Consumer price inflation rose sharply in Q3:2017-18, driven up by a spike in food prices and by the disbursement of enhanced House Rent Allowance (HRA) for central government employees, the latter alone contributing an estimated 35 basis points. It moderated somewhat in Q4 on a delayed seasonal easing of prices of vegetables. Industrial input costs increased through H2:2017-18, tracking movements in international commodity prices. Wage pressures have remained moderate in both the organised and rural sectors. The increase in HRA for central government employees, which became effective from July 2017 and continued to accumulate till December 2017, shaped the path of headline inflation during Q3, with unseasonal hardening of prices of vegetables, accentuating a spike to 4.9 per cent in November. While prices of vegetables did undergo a shallower than usual moderation in December, an unfavourable base effect came into play, pulling up inflation to a peak of 5.2 per cent in December. In Q4, headline inflation moderated with a fall in momentum due to a delayed but steep reversal in prices of vegetables.

A stark feature of India’s recent growth experience has been the protracted downturn in investment, however, a turnaround set in during Q2:2017-18. Gross Fixed Capital Formation (GFCF) strengthened further to touch a six-quarter high in Q3. The share of GFCF in GDP, which was trapped in a downturn from a high of 34.3 per cent in 2011-12 to 30.3 per cent in 2015-16, broke free and increased to 31.4 per cent in 2017-18. As alluded to earlier, this pick-up in the investment rate could be signalling a turning point in the cyclical component of growth oscillations in India and if sustained by a determined policy push, it could produce a level shift in the trajectory of the Indian economy. Capital goods production - a key element of investment demand - turned around in August 2017 and clocked a 19-month high in terms of growth rates in January 2018. During 2017-18 so far (up to December), the construction of highway projects is on the rise and is expected to have improved further in Q4.

Going forward, a key risk to the inflation outlook is the risk of fiscal slippages in a scenario of rising aggregate demand. As noted in the MPC resolution of February 2018, apart from the direct impact on inflation, the fiscal risks could also engender a broader weakening of macro-financial conditions. The revised guidelines for arriving at the MSPs for kharif crops proposed in the Union Budget 2018-19, along with proposed increase in customs duty on a number of items, is likely to pushup inflation over the year. In addition, how various state governments implement and disburse HRA increases would have a considerable bearing on CPI housing inflation and consequently on the headline inflation trajectory, albeit statistically, during 2018-19; therefore, the latter should be looked through for monetary policy purposes, other than for their second-round effects. Although the central government’s HRA effects on CPI inflation would gradually wane from July 2018, this moderating impact could be more than offset if several state governments simultaneously implement HRA increases in H2:2018-19. (Source: RBI)

Finance

During the current year, the Reserve Bank of India (RBI) held six Bi-monthly Monetary Policy Committee meetings. The Policy Repo rates under the Liquidity Adjustment Facility (LAF) was at 6.25% at the beginning of the year. During the year, the RBI reduced the Policy Repo rates by 0.25% once in its third Bi-monthly Monetary Policy Committee meeting to 6.00% and since then maintained at such levels.

Yields in the government securities (G-Sec) has shown continuous increase through the year since the reduction of policy rates. Yields on the 10 year benchmark paper has increased by around 150 bps from the lows. A sharp reduction in G-Sec yields were seen in the month of March when the government announced its intent to reduce its borrowing in the first half. However the reduced rates were short lived and within a month the yields were higher than preannouncement. An important element of the yield rising has been the continuous rise in the crude prices (nearing -80/barrel). The depreciation of rupee is not helping either which shall lead to inflationary pressure which together is resulting in rising yields.

Private Placement Issues of Non-Convertible Debentures

During the year under review, your Company issued secured redeemable non-convertible debentures (“NCDs”) aggregating to Rs. 4,497.80 Crores on a private placement basis, in various tranches.

As specified in the respective offer documents, the funds raised from NCDs were utilised for the purpose of financing, repayment of dues of other financial institutions/Banks or for long term working capital.

Public Issuance of Non-Convertible Debentures

Your Company continues to broaden the liability mix by bringing in new instruments as well as diversifying the investor base and profile. During the year under review, your Company successfully raised Rs. 1,150.5 Crores through its second public issuance of 1,15,05,313 Unsecured Subordinated Redeemable Non-Convertible Debentures (“NCDs”) of face value of Rs. 1,000 each. With this issuance, approximately 5% of your Company’s borrowing is funded through this instrument. The NCDs were allotted on 24th July, 2017 and listed on BSE Limited on 26th July, 2017.

The net proceeds received from the Public Issue were used for the purpose of onward lending, financing, refinancing the existing indebtedness of the Company, long term working capital requirements, Issue expenses and for general corporate purposes. Details of the Issue and the end use were furnished to the Audit Committee.

The Company has been regular in making payments of principal and interest on the NCDs. There are no NCDs which have not been claimed by investors or not paid by the Company after the date on which the NCDs became due for redemption.

Rupee Denominated Medium Term Note (MTN)

As a risk management measure diversification of its resources is one of the focus areas of the Company. To this end, your Company has received approval from the Reserve Bank of India for issuance of Masala Bonds. Your Company has also updated its Offering Circular of Rupee Denominated Medium Term Note (MTN) programme, listed on the Singapore Exchange Securities Trading Limited, and subject to market conditions, plans to issue bonds under the MTN programme during the current year.

INVESTOR RELATIONS

Your Company continuously endeavors to improve its engagement with Domestic and International investors/analysts through multiple mechanisms, including structured conference-calls, individual meetings, Telepresence meetings, participating in investor conferences and undertaking quarterly and annual earnings calls. Your Company attended multiple investor meets organised by reputed Global and Domestic Broking Houses during the year, both in India and abroad, to communicate details of its performance, important regulatory and market developments and exchange of information. These interactions with institutional shareholders, fund managers and analysts are based on generally available information that is accessible to the public on a non-discriminatory basis. Your Company uploads the transcript of the quarterly earnings call on its website which can be accessed by existing and potential investors and lenders.

Your Company believes in transparent communication and building a relationship of mutual understanding and trust. Your Company further ensures that critical information about the Company is available to all the investors by hosting all such information on the Company’s website.

CAPITAL ADEQUACY

Consequent upon the allotment of Equity Shares issued on a Preferential Allotment basis to the Promoter and through a Qualified Institutions Placement to Qualified Institutional Buyers, the paid-up share capital of the Company has increased to Rs.123.6 Crores as on 31st March, 2018 from Rs. 113.8 Crores as on 31st March, 2017. The securities premium account has also increased to Rs. 4,113.2 Crores from Rs.2,025.6 Crores.

As a result of the increased net worth, your Company was able to enhance the Capital to Risk Assets Ratio (CRAR) to 21.9 % as on 31st March, 2018, well above the minimum requirement of 15% CRAR prescribed by the Reserve Bank of India. Out of the above, Tier I capital adequacy ratio stood at 16.0% and Tier II capital adequacy ratio stood at 5.9%, respectively.

RBI GUIDELINES

The Company has complied with all the applicable regulations of the Reserve Bank of India (RBI).

As a prudent practice, your Company makes accelerated provisioning for Non-Performing Assets (NPAs) than that required by RBI for NBFCs. Your Company continues to make a general provision at 0.40% on the standard assets outstanding as mandated by the RBI.

DISCLOSURE PERTAINING TO GOLD LOAN AUCTION(S)

During the fiscal 2016-17, your Company conducted the auction of its Gold Stock and sold the entire stock. With this auction the Company has closed its entire gold loan business.

CREDIT RATING

The credit rating details of the Company as on 31st March, 2018 were as follows:

Rating Agency	Type of Instrument	Rating*	Remarks
India Ratings & Research Private Limited	Commercial Paper Programme	‘IND A1 ’	The ‘A1 ’ rating indicates the Highest Level of Rating. Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
	Long-term Debt Instruments and Subordinated Debt Programme	‘IND AAA/Stable’
CARE Ratings Limited (Formerly known as Credit Analysis & Research Limited)	Long-term Debt Instruments and Subordinated Debt Programme	‘CARE AAA/Stable’	The ‘AAA’ ratings denote the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk.
Brickwork Ratings India Private Limited	Long-term Subordinated Debt Programme	‘BWR AAA/Stable’
CRISIL Limited	Fixed Deposit Programme	‘CRISIL FAAA/Stable’
	Long-term Debt Instruments, Subordinated Debt Programme and Bank Facilities	‘CRISIL AA /Stable’	The ‘AA ’ rating indicates a high degree of safety with regard to timely payment of financial obligations. Such instruments carry very low credit risk.
	Short-term Debt and Bank Loans	‘CRISIL A1 ’	The ‘A1 ’ rating indicates the Highest Level of Rating. Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.

* The ratings mentioned above were reaffirmed by the Rating Agencies during the Financial Year 2017-18. With the above rating affirmations, your Company continues to enjoy the highest level of rating from all major rating agencies at the same time.

ACHIEVEMENTS

Your Company won several awards and accolades during the year under review. Select few awards/ recognition are enumerated hereunder:

Corporate Governance

India’s Most Trusted Companies Awards 2017” as per the Research Report 2017 by Media Research Group, MRG.

Listed amongst the top 10 companies with a high Corporate Governance score in a study jointly conducted by International Finance Corporation (IFC), BSE Limited (BSE) and Institutional Investor Advisory Services (IiAS).

Business & Marketing:

- Ranked 108th in the “Dun & Bradstreet India’s Top 500 Companies 2017” based on Net Profit.

- Adjudged as one of the “Best BFSI Brands 2018” by the Economic Times.

- Award for the ‘Most Effective use of Direct Marketing to Rural Consumers’ at the Rural Marketing Forum & Awards 2018 for MF SUTRADHAAR initiative.

Ranked 13th based on Total Income in “Dun & Bradstreet India’s Leading BFSI Companies 2018” among NBFCs, Financial Institutions and Financial Services Companies.

Won the PRCI (Public Relations Council of India) Collateral Awards 2018 in the following categories:

a. Crystal Award for Corporate Advertising Campaign (SME Ad campaign)

b. Crystal Award for Radio/Jingle (SME Radio Campaign)

c. Gold Award for Rural or Development -Communication (MF SUTRADHAAR Program)

d. Gold Award for Financial Communication (Suvidha Loans Communication Campaign)

e. Silver Award for Radio Communication (SME Radio Campaign)

f. Appreciation Award for Diary 2018

g. Appreciation Award for In-house Digital Newsletter (In-box Select)

h. Appreciation Award for Annual Report

Human Resources

Listed in Aon Best Employer List 2017, as Aon Best Employer

Certified Top 50 India’s Best Companies to Work for - 2017 by Great Place to work.

Adjudged Runner-up in the BusinessWorld HR Excellence Award 2017 by BusinessWorld.

“Best Learning & Development Strategy Award” at World HRD Congress 2017.

Listed in the Avtar and Working Mothers Best Companies to work for.

Appeared in Top 100 Record Holders for Excellence in Learning Sessions.

Attained Level 5 certification for People Capability Maturity Model (PCMM) Level 5.

CSR & Sustainability

Honoured with IDF CSR Award by Indian Development Foundation (IDF) for excellent participation in Resource Mobilization for Humanitarian Projects.

Bestowed with the Equal Opportunity Employer Award by Sarthak Educational Trust for ensuring equal employment opportunities and sustainable employment prospects to person with disability.

Listed in Dow Jones Sustainability Index (DJSI) Emerging Markets category for the 5th consecutive year.

Included in the “Sustainability Yearbook 2018” released by RobecoSAM, being the only Indian Financial Company in Diversified Financial Services and Capital Markets sector to be selected.

Information & Technology

Pride of India Award” for Best Enterprise Learning Platform

FIXED DEPOSITS AND LOANS/ ADVANCES

Your Company offers a bouquet of Fixed Deposit schemes to suit the investment needs of various classes of investors. These Deposits carry attractive interest rates with superior service enabled by robust processes and technology. In order to tap rural and semi-urban savings and reach out to the farthest customers, your Company continues to expand its network and make its presence felt in the most remote areas of the country.

During the year, CRISIL has reaffirmed a rating of ‘CRISIL FAAA/Stable’ for your Company’s Fixed Deposits. This rating represents the highest degree of safety regarding timely servicing of financial obligations and carries the lowest credit risk. Your Company’s deposits continue to be a preferred investment amongst the investors.

As on 31st March, 2018, your Company has mobilised funds from Fixed Deposits to the tune of Rs. 3,137.37 Crores, with an investor base of over 1,30,413 investors.

Your Company continues to serve the investors by introducing several customer centric measures on an ongoing basis to further strengthen its processes in sync with the requirements of the Fixed Deposit holders. The Company communicates various intimations via SMS, e-mails, post, etc., to its investors as well as sends reminder emails to clients whose TDS is likely to be deducted before any payout/ accrual. Your Company also provides online renewal facility, online generation of TDS certificates from customer/broker portal and Seamless Investment process for employees.

During the year under review, your Company has rolled out several initiatives aimed at offering a superior customer experience. Some key ones are:

Increased the number of offices from 198 in the previous fiscal to 304 offices in the current fiscal for collection of Fixed Deposits.

Customer self-profile update on the Fixed Deposit-Customer Portal available on the Company’s website.

Default auto renewal of Fixed Deposits option to facilitate timely renewal of deposits in case the physical request for renewal of Deposits is not received four weeks prior to the maturity date.

Introduced online Swift Loan[s] against Deposits.

Convenience of investment made available through mobile phones.

As at 31st March, 2018, 4,662 deposits amounting to Rs. 8.61 Crores had matured for payment and remained unclaimed. The unclaimed deposits have since reduced to 3,761 deposits amounting to Rs. 6.10 Crores. There has been no default in repayment of deposits or payment of interest during the year.

Your Company being a Non-Banking Financial Company, the disclosures required as per Rule 8 [5] [v] and [vi] of the Companies [Accounts] Rules, 2014 read with sections 73 and 74 of the Companies Act, 2013, are not applicable to it.

The information pursuant to Clause 35[1] of Master Direction DNBR.PD.002/03.10.119/2016-17 dated 25th August, 2016 issued by Reserve Bank of India on Non-Banking Financial Companies Acceptance of Public Deposits [Reserve Bank] Directions, 2016, regarding unpaid/unclaimed public deposits as on 31st March, 2018, is furnished below:

i. total number of accounts of public deposits of the Company which have not been claimed by the depositors or not paid by the Company after the date on which the deposit became due for repayment: 4,662.

ii. the total amounts due under such accounts remaining unclaimed or unpaid beyond the dates referred to in clause [i] as aforesaid: Rs. 8,60,67,196.

Depositors were intimated regarding the maturity of deposits with a request to either renew or claim their deposits. Your Company continues to send intimation letters via registered post every 3 months to all those Fixed Deposit holders whose deposits have matured as well as to those whose deposits remain unclaimed. Where the Deposit remains unclaimed, follow-up action is also initiated through the concerned agent or branch.

Pursuant to section 125[2] [i] of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority [Accounting, Audit, Transfer and Refund] Rules, 2016 [“the IEPF Rules”] as amended from time to time, matured Deposits remaining unclaimed for a period of seven years from the date they became due for payment are required to be transferred to the Investor Education and Protection Fund [IEPF] Authority established by the Central Government. The concerned depositor can claim the Deposit from the IEPF Authority by following the procedure laid down in the IEPF Rules.

During the year, an amount of Rs.0.02 Crores has been transferred to the IEPF Authority.

During the year under review, the Company has not given any loans and advances in the nature of loans to its subsidiaries or associate or loans and advances in the nature of loans to firms/companies in which Directors are interested.

Accordingly, the disclosure of particulars of loans/ advances, etc., as required to be furnished in the Annual Accounts of the Company pursuant to Regulation 34 read with paragraph A of Schedule V of the SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015 is not applicable to the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS IN SECURITIES

Pursuant to section 186[11] of the Companies Act, 2013 [“the Act”], the provisions of section 186 [4] of the Act requiring disclosure in the Financial Statements of the full particulars of the loans made and guarantees given or securities provided by a NonBanking Financial Company in the ordinary course of its business and the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient of the loan or guarantee or security are exempted from disclosure in the Annual Report.

Further, pursuant to the provisions of section 186 (4) of the Act, the details of investments made by the Company are given in the Notes to the Financial Statements.

SUSTAINABILITY INITIATIVES

Sustainability has always been a key success factor for the ambit of the Company’s businesses. Through its unique business model the Company is making a difference in the lives of many by addressing the essential requirements of people in rural and semi-urban parts of India. Your Company’s businesses focus on key necessities of people and enable them to meet their aspirations through a wide-range of financial products and services offered by it. By providing the right set of opportunities in the remote areas and handholding its customers to advance in their lives, your Company continues to make positive contribution to multiple stakeholders. Your Company lays strong emphasis on customer centricity with its customer base spread across more than 3.5 Lakh villages in India with majority of them belonging to the earn and pay segment.

Your Company commenced its journey towards reporting sustainability performance since 2008-09 through Mahindra Group’s Sustainability Report and in the year 2012-13 your Company released its first standalone Sustainability Report. In the reporting year the Company released its fifth Sustainability Report for the Financial Year 2016-17 with the theme ‘Towards Value Creation’ based on the Global Reporting Initiative’s (GRI) G4 Guidelines which highlights its progress and efforts on creating long term benefits and opportunities on social, environmental and economic dimensions for all its stakeholders. This Report is hosted on your Company’s website at the web-link: www.mahindrafinance.com/sustainability.aspx.

Your Company continued to focus on sustainability awareness for different stakeholders by building on the initiatives of the previous years as also initiating new ones. In the year under review, your Company formulated its Sustainability Policy and developed a new Sustainability Roadmap aligned to the Mahindra Group’s Sustainability Framework to ensure mutual initiatives for sustainability across the Group. Interventions on energy efficiency, technology deployment and waste management have been taken throughout the reporting year at different locations. The Company continued its focus on encouraging employees and field staff in adopting Road Safety measures.

Your Company has been listed on the Dow Jones Sustainability Index (DJSI) Emerging Market Trends for the fifth consecutive year. Your Company is the only Company from amongst the Diversified Financial Services Companies in India to have made it to this list. To be incorporated in DJSI, companies are assessed and selected based on their long term Environmental, Social and Governance (ESG) management plans. Your Company got selected in ‘The Sustainability Yearbook’ 2018 being the only Financial Services Sector Company to qualify amongst 9 companies from India. This signifies your Company being amongst the top Sustainability performers in Diversified Financial Services Sector across the world based on Corporate Sustainability Assessment done by RobecoSAM.

In addition to this, your Company continues to report on Carbon Disclosure Project (CDP) since the Financial Year 2011-12. CDP seeks information on management of carbon emissions covering world’s largest companies and how they are geared up to mitigate challenges pertaining to climate change and global warming in future. During the reporting year, your Company retained CDP Performance Band - B which affirms that the Company is taking coordinated action on climate change issues. Your Company made proactive efforts to reduce CO2 emissions (carbon footprint) through Project ‘Mahindra Hariyali’, by planting over 1.2 Lakh saplings throughout the country.

Your Company is gearing up to be future ready by making sustainability and climate change an integral part of the risk framework and taking measures to mitigate and manage them. Weather reports are assessed on a regular basis and aligned with business operations to protect the customers and minimise the risk impact. Your Company is well equipped to enable its customers and communities progress through its inclusive and sustainable business model.

BUSINESS RESPONSIBILITY REPORT

The ‘Business Responsibility Report’ (BRR) of your Company for the year 2017-18 forms part of this Annual Report as required under Regulation 34(2)(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is appended as Annexure II. Your Company is building an inclusive organization by engaging with stakeholders and creating value in the ecosystem it operates in. Your Company’s businesses focus on the key necessities of people and enable them to earn their livelihood through its varied portfolio of financial products and services. Through its wide network of branches with locally-recruited employees, strong and lasting relationships with its stakeholders, large customer base, vast experience and market knowledge, your Company is providing financial resources to underserviced regions of the country and building livelihood for such sections of the population, who are aspiring for a better living in the villages.

The BRR can also be accessed on the Company’s website at the web-link: www.mahindrafinance. com/sustainability.aspx.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

With an objective to empower rural India and transform the rural landscape, your Company during the year, continued to undertake several initiatives in the key thrust areas of Healthcare, Education (including Livelihood) and Environment. It is only through these sustained and consistent efforts that your Company can build and consolidate its CSR initiatives which contribute to nation building.

In the year under review, your Company organised a nationwide blood donation drive, conducted health check-up camps, Swachh Bharat activities, visits to Municipal schools, orphanages, differently-abled homes and old-age homes to re-affirm its pledge to the society.

Your Company also contributed to the environment through planting of over one Lakh trees thus helping restore the diminishing green cover in the country. In the area of public health, your Company sponsored Lifeline Express, a hospital on wheels program, through which medical care and treatment was provided to communities who do not have access to any medical facilities. The Lifeline Express executed in association with Impact India Foundation, catered to the medical needs of 8,010 underprivileged people in Balharshah, in the State of Maharashtra.

In an effort to unleash the potential of the rural population, during the year your Company implemented some of the notable ongoing projects such as providing scholarships to 2,500 undergraduate and 500 graduate students, conducting vocational training for 513 rural youths and Drivers’ training for 220 women, setting-up a vocational skill building center with an aim to train 250 People with Disability and a donation of 14 ambulances that have made access to primary healthcare centers easy for 12,000 tribal and rural patients across the nation. Your Company has expanded the Medical Equipment Donation project to contribute equipment to 30 family planning centers and supported the maintenance of two more Thalassemia Day Care Centers apart from the four existing ones in Maharashtra and one in Jharkhand. Additionally, in the area of healthcare, your Company contributed for the launch of a Maternal & Child Health Care project which provides nutritional supplementation to anemic pregnant and lactating women, adolescents and malnourished children in the areas of Singbhum (Jharkhand), Bhubaneswar (Odisha), Palghar and Thane (Maharashtra).

In the year under review, your Company continued to provide assistance to over 9,400 Nanhi Kalis which supports the education of underprivileged girls. Your Company also continued its commitment to projects such as Mahindra Pride Schools, which helped in providing livelihood training to 2,612 youths from socially and economically disadvantaged communities.

During the year under review, your Company has spent Rs. 27.16 Crores on CSR projects/programs. The amount equal to 2% of the average net profit for the past three financial years required to be spent on CSR activities was Rs. 27.07 Crores. Your Company is in compliance with the statutory requirements in this regard.

CSR COMMITTEE

The CSR Committee presently comprises of Mr. Piyush Mankad (Chairman), Mr. Ramesh Iyer, Mr. V. Ravi and Dr. Anish Shah. The Committee, inter alia, monitors the CSR activities.

CSR POLICY

The CSR Policy of the Company is hosted on the Company’s website at the web-link: http://www. mahindrafinance.com/csr.aspx and a brief outline of the CSR Policy and the CSR initiatives undertaken by the Company during the year as per Annexure prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been appended as Annexure III to this Report.

EXTRACT OF ANNUAL RETURN

Pursuant to sub-section 3(a) of section 134 and subsection (3) of section 92 of the Companies Act, 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return as at 31st March, 2018 forms part of this Report and is appended as Annexure IV.

BOARD MEETINGS, ANNUAL GENERAL MEETING AND EXTRAORDINARY GENERAL MEETING

The calendar of the Board/Committee Meetings and the Annual General Meeting is circulated to the Directors in advance to enable them to plan their schedule for effective participation at the respective meetings. Additional Board Meetings are convened by giving appropriate notice to address business exigencies. At times certain decisions are taken by the Board/Committee through circular resolutions.

All the decisions and urgent matters approved by way of circular resolutions are placed and noted at the subsequent Board/Committee Meeting.

The Board of Directors met seven times during the year under review, on 25th April, 2017, 24th July, 2017, 6th October, 2017, 25th October, 2017, 1st November, 2017, 24th January, 2018 and 16th March, 2018. The requisite quorum was present for all the Meetings. The maximum time gap between any two Meetings was not more than one hundred and twenty days. These Meetings were well attended. The 27th Annual General Meeting [AGM] of the Company was held on 24th July, 2017.

During the year under review, an Extraordinary General Meeting [EGM] of the Members was held on 29th November, 2017 to approve the issuance of Equity Shares on Qualified Institutions Placement to Qualified Institutional Buyers, approve Related Party transaction for Preferential Issue of Shares to Mahindra & Mahindra Limited [M&M], the holding company and accord consent for issue of Equity Shares to M&M on a Preferential Allotment basis.

Detailed information on the Meetings of the Board, its Committees, the AGM and EGM is included in the Report on Corporate Governance, which forms part of this Annual Report.

MEETINGS OF INDEPENDENT DIRECTORS

The Independent Directors met twice during the year under review, on 23rd January, 2018 and 15th March, 2018. The Meetings were conducted in an informal manner without the presence of the Wholetime Directors, the Non-Executive Non-Independent Directors, or any other Management Personnel.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company has various Committees which have been constituted as a part of good corporate governance practices and the same are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

Your Company has an adequately qualified and experienced Audit Committee with Mr. C. B. Bhave as the Chairman and Mr. Dhananjay Mungale, Mr. M. G. Bhide, Ms. Rama Bijapurkar, Mr. Piyush Mankad, Mr. V S. Parthasarathy and Dr. Anish Shah as Members.

The recommendations of the Audit Committee were duly approved and accepted by the Board during the year under review.

The other Committees of the Board are:

i] Nomination and Remuneration Committee

ii] Stakeholders Relationship Committee

iii] Corporate Social Responsibility Committee

iv] Risk Management Committee

v] Asset Liability Committee

vi] Committee for Strategic Investments

vii] IT Strategy Committee

The details with respect to the composition, powers, roles, terms of reference, Meetings held and attendance of the Directors at such Meetings of the relevant Committees are given in detail in the Report on Corporate Governance of the Company which forms part of this Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Directors

Dr. Anish Shah, Non-Executive Non-Independent Director, retires by rotation at the forthcoming Annual General Meeting and, being eligible, offers himself for reappointment. The detailed profile of Dr. Anish Shah has been included in the Notice convening the ensuing AGM.

All the Directors of the Company have confirmed that they satisfy the fit and proper criteria as prescribed under paragraph 69[1][iv] of Chapter XI of RBI Master Direction No. DNBR. PD. 008/03.10.119/2016-17 dated 1st September, 2016 and that they are not disqualified from being appointed as Directors in terms of section 164[2] of the Companies Act, 2013.

None of the Independent Directors are due for re-appointment.

Key Managerial Personnel

Mr. Ramesh Iyer, Vice-Chairman & Managing Director, Mr. V Ravi, Executive Director & Chief Financial Officer and Ms. Arnavaz M. Pardiwalla, Company Secretary of the Company have been designated as the Key Managerial Personnel of the Company [KMP] pursuant to the provisions of sections 2[51] and 203 of the Companies Act, 2013 read with the Companies [Appointment and Remuneration of Managerial Personnel] Rules, 2014.

There has been no change in the KMP during the year under review.

Declaration by Independent Directors The Company has received declarations from all the Independent Directors of the Company confirming that they fulfill the criteria of independence as prescribed under sub-section [6] of section 149 of the Companies Act, 2013 and the Securities and Exchange Board of India [Listing Obligations and Disclosure Requirements] Regulations, 2015.

Directors’ Responsibility Statement

Pursuant to the provisions of section 134[5] of the Companies Act, 2013, [“the Act”] your Directors, based on the representations received from the Operating Management and after due enquiry, confirm that:

i. i n the preparation of the annual accounts for financial year ended 31st March, 2018, the applicable accounting standards have been followed and there are no material departures in adoption of these standards.

ii. they have in consultation with the Statutory Auditors selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2018 and of the profit of the Company for the year ended on that date.

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. they have prepared the annual accounts for financial year ended 31st March, 2018 on a going concern basis.

v. they have laid down adequate internal financial controls to be followed by the Company and that such internal financial controls were operating effectively during the financial year ended 31st March, 2018.

vi. they have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively during the financial year ended 31st March, 2018.

Performance Evaluation of the Board

The Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“the Listing Regulations”) stipulate the evaluation of the performance of the Board, its Committees, Individual Directors and the Chairperson.

The Company has formulated a Policy for performance evaluation of the Independent Directors, the Board, its Committees and other individual Directors which includes criteria for performance evaluation of the Non-Executive Directors and Executive Directors.

The evaluation framework for assessing the performance of Directors comprises of various key areas such as attendance at Board and Committee Meetings, quality of contribution to Board discussions and decisions, strategic insights or inputs regarding future growth of the Company and its performance, ability to challenge views in a constructive manner, knowledge acquired with regard to the Company’s business/activities, understanding of industry and global trends, etc.

The evaluation involves self-evaluation by the Board Member and subsequent assessment by the Board of Directors. A member of the Board will not participate in the discussion of his/her evaluation.

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of 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 the Directors individually (including Independent Directors).

Feedback was sought by way of well-defined and structured questionnaires covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board culture, areas of responsibility, execution and performance of specific duties, obligations and governance, compliance, oversight of Company’s subsidiaries, etc.

A separate exercise was carried out by the Nomination and Remuneration Committee of the Board to evaluate the performance of individual Directors who were evaluated on several parameters such as level of engagement and contribution, independence of judgment safeguarding the interest of the Company and its minority shareholders and knowledge acquired with regard to the Company’s business/activities.

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 Directors and NonExecutive Directors.

The performance evaluation of the Independent Directors was carried out by the entire Board excluding the Director being evaluated. Qualitative comments and suggestions of Directors were taken into consideration by the Chairman of the Board and the Chairman of the Nomination and Remuneration Committee. The Directors have expressed their satisfaction with the evaluation process.

Familiarisation Programme for Independent Directors

The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters along with details of number of programmes and number of hours spent by each of the Independent Directors during the Financial Year 2017-18, in terms of the requirements of SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015 are available on the website of the Company and can be accessed at the web-link: http://www.mahindrafinance.com/ pdf/familiarisation-programme for-IDs.pdf

Policies on Appointment of Directors and Remuneration of Directors, Key Managerial Personnel and Employees

In accordance with the provisions of section 134[3] [e] of the Companies Act, 2013 [“the Act”] read with section 178[2] of the Act and Regulation 17 of the SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015, your Company has adopted a Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management, which inter alia, includes the criteria for determining qualifications, positive attributes and independence of Directors.

Your Company has also adopted the Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel and Employees of the Company in accordance with the provisions of sub-section [4] of section 178, and the same are appended as Annexure V-A and Annexure V-B, respectively and form part of this Report.

The criteria for determining qualifications, positive attributes and independence of a Director and the Remuneration Policies for Directors, Key Managerial Personnel and other employees have been discussed in detail in the Report on Corporate Governance.

AUDITORS

Statutory Auditors

Messrs. B S R & Co. LLP, Chartered Accountants [ICAI Firm Registration No.101248W/W-100022], were appointed as the Statutory Auditors of the Company to hold office for a period of 5 years, commencing from the conclusion of the 27th Annual General Meeting [“AGM”] held on 24th July, 2017 till the conclusion of the 32nd AGM of the Company to be held in the year 2022, subject to ratification of their appointment by the Members at every AGM, as may be applicable.

As required under the provisions of section 139[1] of the Companies Act, 2013, the Company has received a written consent from Messrs. B S R & Co. LLR Chartered Accountants to their appointment and a Certificate, to the effect that their appointment, if made, would be in accordance with the Companies Act, 2013 and the Rules framed thereunder and that they satisfy the criteria provided in section 141 of the Companies Act, 2013.

The Members are requested to ratify the appointment of the Statutory Auditors as aforesaid and fix their remuneration.

The Auditors’ Report is unmodified and does not contain any qualification, reservation, adverse remark or disclaimer.

Secretarial Auditor

The Board of Directors of the Company has appointed Messrs. KSR & Co., Company Secretaries LLP to conduct the Secretarial Audit of the Company pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies [Appointment and Remuneration of Managerial Personnel] Rules, 2014. In accordance with the provisions of sub-section [1] of section 204, the Secretarial Audit Report for the Financial Year 2017-18 is appended to this Report as Annexure VI.

The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

Reporting of Frauds by Auditors

During the year under review, the Statutory Auditors and the 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 need to be mentioned in this Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts/arrangements/transactions entered into by the Company during the Financial Year with related parties were in the ordinary course of business and on an arm’s length basis.

During the year under review, your Company had entered into a Material Related Party Transaction, i.e. transaction exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, with Mahindra & Mahindra Limited, the Holding Company. This transaction too was in the Ordinary Course of Business of your Company and was at Arm’s Length Basis, details of which, as required to be provided under section 134[3][h] of the Companies Act, 2013 are disclosed in Form AOC-2 as Annexure VII and forms part of this Annual Report.

The Policy on Related Party Transactions as approved by the Board of Directors of the Company is uploaded on the website of the Company and same can be accessed on the web-link: http://www. mahindrafinance.com/policies.aspx.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

No material changes and commitments have occurred after the closure of the Financial Year 2017-18 till the date of this Report, which would affect the financial position of your Company.

RISK MANAGEMENT POLICY

Your Company has a comprehensive Risk Management Policy in place and has laid down a well-defined risk management framework to identify, assess and monitor risks and strengthen controls to mitigate risks. Your Company has established procedures to periodically place before the Risk Management Committee and the Board of Directors, the risk assessment and minimisation procedures being followed by the Company and steps taken by it to mitigate these risks.

The Risk Management Policy, 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. The 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.

The development and implementation of Risk Management Policy adopted by the Company is discussed in detail in the Management Discussion and Analysis chapter, which forms part of this Annual Report.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company promotes ethical behaviour in all its business activities and has established a vigil mechanism for its Directors, Employees and Stakeholders associated with the Company to report their genuine concerns. The Vigil Mechanism as envisaged in the Companies Act, 2013 and the Rules prescribed thereunder and the Listing Regulations is implemented through the Whistle Blower 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 per the Whistle Blower Policy implemented by the Company, the Employees, Directors, customers, dealers, vendors, suppliers, or any Stakeholders associated with the Company are free to report illegal or unethical behaviour, actual or suspected fraud or violation of the Company’s Codes of Conduct or Corporate Governance Policies or any improper activity to the Chairman of the Audit Committee of the Company or Chairman of the Company or Convenor of the Corporate Governance Cell.

The Whistle Blower Policy provides for protected disclosure and protection to the Whistle Blower. Under the Whistle Blower Policy, the confidentiality of those reporting violation(s) is protected and they are not subject to any discriminatory practices. Protected disclosures can also be made by sending an email at the designated email id : mmfsl_whistleblower@ mahindra.com.

The Whistle Blower Policy has been appropriately communicated within the Company and is available on the website of your Company at the web-link: http://www.mahindrafinance.com/pdf/MMFSL VigilMechanism.pdf

No personnel have been denied access to the Audit Committee.

SUBSIDIARIES, JOINT VENTURE AND ASSOCIATES

The Company’s subsidiaries and joint venture continue to contribute to the overall growth in revenues and overall performance of your Company.

A Report on the performance and financial position of each of the subsidiaries and the joint venture company included in the Consolidated Financial Statements and their contribution to the overall performance of the Company is provided in Form AOC-1 as Annexure A to the Consolidated Financial Statements and forms part of this Annual Report.

The Policy for determining material subsidiaries as approved by the Board is hosted on the Company’s website and can be accessed at the web-link: http:// www.mahindrafinance.com/policies.aspx.

SUBSIDIARIES

Mahindra Insurance Brokers Limited

During the year under review, Mahindra Insurance Brokers Limited (MIBL), the subsidiary in the business of Direct and Re-insurance Broking, serviced approximately 2.59 million insurance cases, with a total of 20,58,613 cases for both Life and Non-Life Retail business. The customized Life insurance cover “Mahindra Loan Suraksha” (MLS) increased from 5,82,949 lives covered with a Sum Assured of Rs. 18,027.6 Crores in the Financial Year 2016-17 to 6,85,264 lives covered with a Sum Assured of Rs. 21,359.2 Crores in the Financial Year 2017-18. A substantial portion of MLS continues to be covered in the rural markets.

MIBL achieved a growth of 31% in Gross Premium facilitated for the Corporate and Retail business lines, increasing from Rs. 1,567.9 Crores in the Financial Year 2016-17 to Rs. 2,049.1 Crores in the Financial Year 2017-18. The Total Income increased by 41% from Rs. 174.2 Crores in the Financial Year 201617 to Rs. 245.1 Crores in the Financial Year 2017-18. The Profit Before Tax (PBT) recorded a marginal degrowth of 0.6% at Rs.81.2 Crores as compared to Rs.81.7 Crores in the same period of the previous year. The Profit After Tax (PAT) recorded a degrowth of 1.5% at Rs.52.2 Crores as against Rs.53.0 Crores in the same period of the previous year.

MIBL has been able to reach the benefit of insurance to over 2,00,000 villages across India.

Sale of 1,28,866 Equity Shares representing 5% of the total share capital of MIBL

During the year, your Company sold 1,28,866 Equity Shares aggregating 5% of the share capital of MIBL in favour of Inclusion Resources Private Limited for an overall consideration of Rs. 65 Crores, resulting in a profit of Rs. 65 Crores on sale of this investment. Post the sale, the shareholding of your Company stands reduced from 85% to 80% of MIBL’s share capital.

Mahindra Rural Housing Finance Limited

Mahindra Rural Housing Finance Limited (MRHFL), the Company’s subsidiary in the business of providing loans for purchase, renovation, construction of houses to individuals in the rural and semi-urban areas of the country, registered a total income of Rs. 1,000.0 Crores as compared to Rs. 703.4 Crores for the previous year, registering a growth of 42%. Profit before tax was 77% higher at Rs.224.6 Crores as compared to Rs. 126.9 Crores for the previous year. Profit after tax was 75% higher at Rs.145.5 Crores as compared to Rs. 83.0 Crores for the previous year.

During the year under review, MRHFL disbursed loans aggregating to Rs. 2,789.2 Crores (previous year Rs.2,116.2 Crores) achieving a growth of 32 percent over the previous year.

MRHFL continued its focus on serving customers in rural India. Majority of the loans disbursed were to customers in villages with an average annual household income of less than Rs.1.9 lakhs. During the year under consideration, MRHFL disbursed home loans to around 2,18,000 households (in addition to around 5,60,000 existing households as on 31st March, 2017). MRHFL has been expanding its geographical presence to provide affordable services for rural households.

During the year under review, operations of MRHFL were strengthened in the States of Maharashtra, Gujarat, Rajasthan, Tamil Nadu, Andhra Pradesh, Telangana, Chhattisgarh, Kerala, Karnataka, Madhya Pradesh, Uttar Pradesh, Uttarakhand and Bihar.

Mahindra Asset Management Company Private Limited

Mahindra Asset Management Company Private Limited (MAMCPL), a wholly-owned subsidiary of the Company acts as an Investment Manager for the schemes of Mahindra Mutual Fund. As on 31st March, 2018, MAMCPL was acting as the Investment Manager for six schemes.

The Assets under Management in these six schemes were Rs. 3,352 Crores in March 2018 as compared to Rs. 2,050 Crores in March 2017. Of these assets, Rs. 1,173 Crores were in retail schemes in March 2018 as compared to Rs. 319 Crores in March 2017. MAMCPL has empanelled more than 7,500 distributors and opened 1,26,737 investor accounts in these schemes recording a rise of more than 235%.

During the year under review, the total income of MAMCPL was Rs. 23.4 Crores as compared to Rs. 8.8 Crores for the previous year, registering a growth of 165%. The operations for the year have resulted in a loss of Rs. 38.1 Crores as against a loss of Rs. 20.5 Crores during the previous year.

Mahindra Trustee Company Private Limited

Mahindra Trustee Company Private Limited (MTCPL), your Company’s wholly-owned subsidiary, acts as the Trustee to Mahindra Mutual Fund.

During the year, MTCPL earned trusteeship fees of Rs.23.87 lakhs and other income of Rs.0.73 lakhs as compared to Rs.3.11 lakhs and Rs.0.06 lakhs respectively, for the previous year. The total expenses for the year were Rs.24.25 lakhs as against Rs. 23.52 lakhs in the previous year. MTCPL recorded a profit of Rs.0.35 lakhs for the year under review as against a loss of Rs. 20.4 lakhs in the previous year.

JOINT VENTURE Mahindra Finance USA LLC.

The joint venture company’s disbursement registered a growth of 8.34% to USD 828.38 Million for the year ended 31st March, 2018 as compared to USD 764.61 Million for the previous year.

Income grew by 27.98% to USD 54.61 Million for the year ended 31st March, 2018 as compared to USD 42.67 Million for the previous year. Profit before tax was 27.34% higher at USD 16.44 Million as compared to USD 12.91 Million for the previous year. Profit after tax grew at a healthy rate of 19.02% to USD 9.70 Million as compared to USD 8.15 Million in the previous year.

Names of companies which have become or ceased to be subsidiaries, joint ventures or associate companies during the year

During the year under review, no company has become or ceased to be a subsidiary, joint venture or associate of your Company.

The Company shall provide the copy of the annual accounts of its subsidiary companies and the related information to the Members of the Company on their request. The annual accounts of the subsidiary companies will also be kept open for inspection by any Member at the Registered Office of the Company and also at the Registered Office of the respective subsidiary companies during working hours upto the date of the Annual General Meeting.

The Annual Reports of the subsidiaries will also be available on your Company’s website at the web-link: http://www.mahindrafinance.com/annual-reports.aspx.

Material Subsidiary

Regulation 16[1][c] of the SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015 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 material subsidiary, during the year under review.

The Policy for determining material subsidiaries as approved by the Board is uploaded on the Company’s website and can be accessed at the Web-link: http://www.mahindrafinance.com/pdf/ determining material subsidiaries.pdf

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company and its four subsidiaries, viz. Mahindra Insurance Brokers Limited, Mahindra Rural Housing Finance Limited, Mahindra Asset Management Company Private Limited and Mahindra Trustee Company Private Limited prepared in accordance with the Companies Act, 2013 and Accounting Standard AS 21 prescribed by The Institute of Chartered Accountants of India, along with all relevant documents and the Auditors’ Report form part of this Annual Report. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies and its joint venture viz. Mahindra Finance USA LLC.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY’S OPERATIONS IN FUTURE

There are no significant and material orders passed by the regulators or courts or tribunals that would impact the going concern status of the Company and its future operations.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Your Company has in place adequate internal financial controls with reference to financial statements, commensurate with the size, scale and complexity of its operations. Your Company uses Oracle based Systems as a business enabler and also to maintain its Books of Account. The transactional controls built into these systems ensure appropriate segregation of duties, appropriate level of approval mechanisms and maintenance of supporting records. The systems, Standard Operating Procedures and controls are reviewed by Management. These systems and controls are audited by Internal Audit and their findings and recommendations are reviewed by the Audit Committee which ensures the implementation. Review of the internal financial controls environment of the Company was undertaken during the year which covered verification of entity level control, process level control and IT controls, identification, assessment and definition of key business processes and analysis of risk control matrices, etc. The risk and control matrices are reviewed on a quarterly basis and control measures are tested and documented.

Reasonable Financial Controls are operative for all the business activities of the Company and no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.

Nonetheless your Company recognises that any internal control framework, no matter how well designed, has inherent limitations and accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.

COMPLIANCE WITH THE PROVISIONS OF SECRETARIAL STANDARD - 1 AND SECRETARIAL STANDARD - 2

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

PARTICULARS OF REMUNERATION AND RELATED DISCLOSURES

Disclosures with respect to the remuneration of Directors, Key Managerial Personnel and Employees as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are as under:

			Disclosure Details
				Ratio of the
Sl. No.	Disclosure Requirement	Name of Director/ KMP	Designation	remuneration of each Director to median remuneration of Employees
1.	Ratio of the remuneration of each Director to the median remuneration	Mr. Dhananjay Mungale	Chairman (Independent Director)	11.06X
	of the employees of the Company for	Mr. M. G. Bhide	Independent Director	9.14X
	the Financial Year 2017-18.	Mr. Piyush Mankad	Independent Director	8.78X
		Mr. C. B. Bhave	Independent Director	8.45X
		Ms. Rama Bijapurkar	Independent Director	7.85X
		Mr. V. S. Parthasarathy	Non-Executive Director	NIL*
		Dr. Anish Shah	Non-Executive Director	NIL*
		Mr. Ramesh Iyer	Vice-Chairman & Managing Director	196.96X
		Mr. V. Ravi	Executive Director & Chief Financial Officer	84.99X
		Ms. Arnavaz M.	Company Secretary &	19.76X
		Pardiwalla	Compliance Officer

* Mr. V. S. Parthasarathy and Dr. Anish Shah do not receive any remuneration from the Company.

Sl. No.			Disclosure Details
	Disclosure Requirement	Name of Director/KMP	Designation	% increase in Remuneration
2.	Percentage increase in Remuneration of each Director, Chief Financial	Mr. Dhananjay Mungale	Chairman (Independent Director)	1.82
	Officer and Company Secretary during	Mr. M. G. Bhide	Independent Director	4.53
	the Financial Year 2017-18.	Mr. Piyush Mankad	Independent Director	6.83
		Mr. C. B. Bhave	Independent Director	2.81
		Ms. Rama Bijapurkar	Independent Director	1.71
		Mr. V. S. Parthasarathy	Non-Executive Director	NIL*
		Dr. Anish Shah	Non-Executive Director	NIL*
		Mr. Ramesh Iyer	Vice-Chairman & Managing Director	-11.53
		Mr. V. Ravi	Executive Director & Chief Financial Officer	-13.94
		Ms. Arnavaz M.	Company Secretary &	-11.16
		Pardiwalla	Compliance Officer
* Mr. V. S. Parthasarathy and Dr. Anish Shah do not receive any remuneration from the Company.
3.	Percentage increase in the median	5.22% considering employees who were in employment for the whole of the
	Remuneration of employees in the	Financial Year 2016-17 and Financial Year 2017-18.
	Financial Year 2017-18.
4.	Number of Permanent employees on the rolls of the Company as on 31st March, 2018.	18,733

5. Average percentile increase already made in the salaries of employees other than the Managerial Personnel in the last Financial Year i.e. 201718 and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration.	For employees other than Managerial Personnel who were in employment for the whole of the Financial Year 2016-17 and Financial Year 2017-18, the average increase is 5.62%. Average decrease for Managerial Personnel is 12.20% Justification: The remuneration of the Vice-Chairman & Managing Director and Executive Director & Chief Financial Officer is decided based on the individual performance, inflation, prevailing industry trends and benchmarks. The remuneration of eligible Non-Executive Directors consists of commission and sitting fees. While deciding the remuneration, various factors such as Director’s participation in Board and Committee Meetings during the year other responsibilities undertaken, such as Membership or Chairmanship/ Chairpersonship of Committees, etc., were taken into consideration. The increment given to each individual employee is based on the employees’ potential, experience as also their performance and contribution to the Company’s progress over a period of time and also benchmarked against a comparator basket of relevant companies in India.
6. Affirmation that the remuneration is	The remuneration paid/payable is as per the Policy on Remuneration of
as per the Remuneration Policy of the	Directors and Remuneration Policy for Key Managerial Personnel and
Company	Employees of the Company.

Notes:

1] The remuneration calculated is as per Section 2[78] of the Companies Act, 2013 and includes the perquisite value of Stock Options of the Company exercised during the year

2] The calculations are based on Employees who were on the rolls of the Company for the whole of the Financial Year 2016-17 and Financial Year 2017-18.

Mr. Ramesh Iyer, Vice-Chairman & Managing Director and Mr. V. Ravi, Executive Director & Chief Financial Officer of the Company do not receive any remuneration or commission from its Holding Company. However, Mr. Iyer has been granted stock options under the Employees’ Stock Option Scheme of the Holding Company, Mahindra & Mahindra Limited. Mr. Iyer has not exercised ESOPs of the Holding Company, during the year, which were granted in the earlier year[s].

During the year under review, Mr. Ramesh Iyer and Mr. V. Ravi have received a commission of Rs. 76,56,314 and Rs. 19,15,000, respectively, from Mahindra Insurance Brokers Limited, a subsidiary of the Company. Further in the year under review, 1,14,273 stock options have been granted to Mr. Ramesh Iyer and 28,568 stock options have been granted to Mr. V. Ravi under the Employees’ Stock Option Scheme of Mahindra Rural Housing Finance Limited, the Company’s subsidiary company.

The Company had 14 employees who were in receipt of remuneration of not less than Rs. 1,02,00,000 during the year ended 31st March, 2018 or not less than Rs.8,50,000 per month during any part of the year.

Details of employee remuneration as required under provisions of Section 197 [12] of the Companies Act, 2013 read with Rule 5 [2] and 5 [3] of Companies [Appointment and Remuneration of Managerial Personnel] Rules, 2014 are available at the Registered Office of the Company during working hours, 21 days before the

Annual General Meeting and shall be made available to any shareholder on request. Such details are also available on your Company’s website and can be accessed at the web-link: http://www.mahindrafinance.com/annual-reports.aspx. None of these employees is a relative of any Director of the Company.

None of the employees holds either by himself/herself or along with his/her spouse or dependent children, more than two per cent of the Equity Shares of the Company.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company is an equal opportunity employer and is committed to ensuring that the work environment at all its locations is conducive to fair, safe and harmonious relations between employees. It strongly believes in upholding the dignity of all its employees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictly prohibited.

The Company has in place an appropriate Policy in accordance with the provisions of the Sexual Harassment of Women at Workplace [Prevention, Prohibition and Redressal] Act, 2013, to prevent sexual harassment of its employees.

Internal Complaints Committee [ICC] has been set up to redress complaints received regarding sexual harassment.

All employees (permanent, contractual, temporary and trainees) are covered under this Policy. The Policy has been widely communicated internally and is placed on the Company’s intranet portal. The Company ensures that no employee is disadvantaged by way of gender discrimination.

The following is a summary of Sexual Harassment complaint(s) received and disposed off during the year 2017-18, pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder:

(a) Number of complaint(s) of Sexual Harassment received during the year - 1

(b) Number of complaint(s) disposed off during the year - 1

(c) Number of cases pending for more than 90 days - 0

(d) Number of workshops/awareness programme against sexual harassment carried out - 1 workshop was conducted at the Company’s Corporate Office. Awareness on sexual harassment was carried out to sensitize employees of the Company at branches pan-India.

(e) Nature of action taken by the employer or District Officer - Warning letter was issued to the alleged employee.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under sub-section (3) (m) of section 134 of the Companies Act, 2013 read with Rule (8)(3)of the Companies (Accounts) Rules, 2014 are given as under :

(A) Conservation of Energy

(i) The steps taken or impact on conservation of energy:

The operations of your Company are not energy intensive. However, adequate measures have been initiated to reduce energy consumption.

Select few steps are listed:

a) Replacement of conventional lighting with Light Emitting Diode (LED) lighting :

The Company has installed LED lighting in Regional Offices of the Company during the year under review and the same has been monitored in terms of electrical consumption and expenses.

b) Replacement of old air-conditioning with updated version of machines with R-410A gas, which helps in reducing Ozone depletion.

c) Reduction in water and energy consumption and recycling of waste generation at various locations.

(ii) The steps taken by the Company for utilising alternate sources of energy: Nil.

(iii) The capital investment on energy conservation equipments: Nil.

(B) Technology Absorption

(i) The efforts made towards technology absorption:

Not Applicable.

(ii) The benefits derived like product improvement, cost reduction, product development or import substitution: Not Applicable.

(iii) I n case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year): Not Applicable.

(a) Details of Technology Imported;

(b) Year of Import;

(c) Whether the Technology has been fully absorbed;

(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof.

(iv) Your Company has not incurred any expenditure on Research and Development during the year under review.

(C) Foreign Exchange Earnings and Outgo

The information on foreign exchange outgo is furnished in the Notes to the Accounts. There were no foreign exchange earnings during the year.

For and on behalf of the Board

Dhananjay Mungale

Chairman

Place: Mumbai

Date : 25th April, 2018

---

Mar 31, 2018

To,

The Members of

Mahindna & Mahindra Financial Services Limited

The Directors are pleased to present their Twenty-Eighth Report together with the audited financial statements of your Company for the Financial Year ended 31st March, 2018.

The performance highlights and summarised financial results of the Company are given below:

PERFORMANCE HIGHLIGHTS

Consolidated income for the year increased by 19% to Rs. 8,573.5 Crores as compared to Rs. 7,200.7 Crores in 2016-17;

Consolidated income from operations for the year was Rs. 8,533.1 Crores as compared to Rs. 7,146.2 Crores in 2016-17, a growth of 19%;

Consolidated profit before tax for the year was Rs.1,661.7 Crores as compared to Rs. 837.8 Crores in 2016-17;

Consolidated profit after tax and minority interest for the year was Rs. 1,023.9 Crores as compared to Rs.511.6 Crores in 2016-17.

FINANCIAL RESULTS

Rs. in Crores

	CONSOLIDATED		STANDALONE
	March 2018	March 2017	March 2018	March 2017
Total Income	8,573.5	7,200.7	7,206.1	6,237.5
Less : Finance Costs	3,426.3	3,186.2	3,000.4	2,857.4
Expenditure	3,481.0	3,123.0	2,853.7	2,714.0
Depreciation/Amortisation	55.2	53.7	44.2	46.0
Total Expenses	6,962.5	6,362.9	5,898.3	5,617.4
Profit Before Exceptional Items and Taxes	1,611.0	837.8	1,307.8	620.1
Exceptional Items (net) - income / (expense)	50.7	-	65.0	-
Profit Before Tax	1,661.7	-	1,372.8	-
Less : Provision For Tax
Current Tax	676.3	463.5	543.1	363.5
Deferred Tax	[66.0]	(155.4)	(62.2)	[143.6]
Profit After Tax for the Year before Minority Interest	1,051.4	529.7	891.9	400.2
Less : Minority Interest	27.5	18.1	-	-
Profit After Tax for the Year after Minority Interest	1,023.9	511.6	891.9	400.2
Add : Amount brought forward from Previous Years	2,850.5	2,522.4	2,489.0	2,240.5
Less: Corporate Dividend and Dividend Distribution Tax	164.3	2.8	161.0	-
Less: Transitional charge in respect of Mark to Market loss on derivative transactions	-	5.1	-	5.1
Amount available for Appropriation	3,710.1	3,026.1	3,219.9	2,635.6
Appropriations
General Reserve	88.4	40.0	89.2	40.0
Statutory Reserve	224.3	109.1	178.4	80.1
Debenture Redemption Reserve	50.5	26.5	50.5	26.5
Surplus carried to Balance Sheet	3,346.9	2,850.5	2,901.8	2,489.0

TRANSFER TO RESERVES

The Company proposes to transfer an amount of Rs. 89.2 Crores to the General Reserve, Rs.178.4 Crores to the Statutory Reserve and Rs.50.5 Crores to the Debenture Redemption Reserve. An amount of Rs.2,901.8 Crores is proposed to be retained in the Statement of Profit and Loss.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 4 per Equity Share of the face value of Rs. 2 each payable to those Members whose names appear in the Register of Members as on the Book Closure date. The dividend including dividend tax for the Financial Year 2017-18 will absorb a sum of Rs. 293.8 Crores [as against 161.0 Crores on account of dividend of Rs. 2.4 per Equity Share and tax thereon, paid for the previous year].

DIVIDEND DISTRIBUTION POLICY

The Board of Directors at its Meeting held on 25th October, 2016, approved and adopted the Dividend Distribution Policy, containing the requirements prescribed in Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Policy is appended as Annexure I and forms part of this Annual Report.

The Dividend Distribution Policy can also be accessed on the Company’s website at the web-link http://www.mahindrafinance.com/policies.aspx.

During the year, an amount of Rs.3,39,065 being the unclaimed/unpaid dividend of the Company for the Financial Year ended 31st March, 2010 was transferred in September, 2017 to the Investor Education and Protection Fund Authority.

OPERATIONS

After three years of subdued rural consumption, there were increasing signs of rural growth recovery with catalysts driving the awaited revival in rural demand. While two successive years of normal monsoon portend well for farm output, the combination of Minimum Support Price (MSP) hikes, direct benefit transfers and farm loan waivers contributed to disposable incomes. The rural sentiments turned positive and the Company did see an improvement in its performance, both in sales as well as overall collections.

Being largely engaged in the semi-urban and rural areas of the country, major part of the Company’s collection is in cash. Your Company however continues to educate its customers to adopt digital and online modes of repayment including Unified Payments Interface (UPI) and Aadhaar Enabled Payment System (AEPS).

While fulfilling its mission of Financial Inclusion, your Company has also built a deep knowledge of customers with micro-data points ranging from income, payment behaviours, socio-economic status and other indirect data. The Company is successfully mining this data to build powerful analytics models extended through digital platforms for customer acquisition, collections, NPA management, customer engagement, forecasting business trends, etc. Your Company has also successfully integrated India Stack capabilities like eKYC, eSign, etc., and digital payment channels in its platforms to serve customers even in low-connectivity remote locations. Among the early adopters of blockchain technology, your Company has in the year under review, launched a vendor financing platform powered by blockchain. This cloud based application is one of the first such blockchain-enabled projects in South Asia, outside of traditional banking.

Your Company remains a significant financier to its customers in rural and semi-urban geographies by providing a wide range of easy and affordable products and services. Your Company consolidated its position as a leading financier in all Aggregator and Self-drive vehicles segment. Your Company expanded vide its channel connect with leading car dealers, and yet again emerged as a major financier for Maruti vehicles in semi-urban and rural India during this fiscal. Your Company has retained its leadership position in financing the Mahindra range of vehicles and tractors in addition to extending its lending to vehicles of other Original Equipment Manufacturers (OEMs) and also continued to be the preferred financier for Hyundai, Renault and Nissan range of vehicles.

Your Company further expanded its geographical presence by reaching out to untapped villages and increased its footprint by opening new branches and making it more accessible to its customers. New financial products and services were introduced during the year, to meet various lifecycle needs of its customers and your Company focused on building additional skill sets and digital capabilities to meet such requirements. Your Company has also enhanced the offerings in-used tractor financing and agri-implements, thereby playing a key role in farm mechanisation across the country.

Your Company strengthened its pan-India presence with a network of 1,284 offices, which is one of the largest amongst Non-Banking Financial Companies. In addition to these offices, your Company has during the year under review, set up over 200 smart branches at dealerships of OEMs and works closely with dealers and customers. Your Company’s nationwide network of branches and locally recruited employees have facilitated in catering to the diverse financial requirements of its customers by identifying and understanding the needs and aspirations of the people.

With its strong presence covering even the most remote areas of the country, your Company is providing flexible financing opportunities to aspiring individuals to realise their dreams and helping them to ‘RISE’. Your Company believes that incessantly serving its customers and channel partners and enhancing customer relationship is the starting point of a great successful journey.

Your Company has earned the trust and confidence of its customers with its consistent, transparent and reliable services and as a result, customer satisfaction across its network continues to remain high. Your Company has cumulatively financed the aspirations of over 5.3 million customers since its inception, most of whom had no prior credit history. Your Company’s philosophy of helping rural customers by providing easy finance at their doorstep has given a big boost in transforming rural lives.

During the year under review, your Company continued to expand its reach in the Micro Small and Medium Enterprises (MSME) segment. MSME Assets Under Management crossed more than Rs. 4,988.04 Crores during the period under review, covering 3,017 customers.

In the year under review, the effect of demonetisation has substantially come down with improved availability of currency notes. Further with the stabilization of the Goods and Services Tax (GST) the temporary downward impact witnessed during the roll-out has been adequately addressed.

The overall disbursement registered a growth of 19% at Rs. 31,659.1 Crores as compared to Rs. 26,706.3 Crores in the previous year. Total Income grew by Rs. 968.6 Crores to Rs.7,206.1 Crores for the year ended 31st March, 2018 as compared to Rs.6,237.5 Crores for the previous year. Profit Before Tax (PBT) grew by Rs.752.6 Crores to Rs.1,372.7 Crores as compared to Rs. 620.1 Crores for the previous year. Profit After Tax (PAT) increased by Rs. 491.7 Crores to Rs.891.9 Crores as compared to Rs.400.2 Crores in the previous year

During the year under review, the Assets Under Management stood at Rs. 55,101 Crores as at 31st March, 2018 as against Rs. 46,776 Crores as at 31st March, 2017, a growth of 18%.

There is no change in the nature of business of the Company during the year under review.

DISTRIBUTION OF MUTUAL FUND PRODUCTS

During the year under review, the activity of distribution of Mutual Fund Products (MFP) was carried out across 161 branches covering 23 States.

As on 31st March, 2018, the amount of Assets Under Management outstanding through the Company’s Distribution Services on MFP aggregate of institutional and retail segment, was Rs. 2,331.40 Crores and the number of clients stood at 59,506.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of the Company’s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

CORPORATE GOVERNANCE

Your Company practices a culture that is built on core values and ethical governance practices. Your Company is committed to transparency in all its dealings and places high emphasis on business ethics. A Report on Corporate Governance along with a Certificate from the Statutory Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated in Regulations 17 to 27, clauses (b) to (i) of sub-regulation (2) of Regulation 46 and paragraphs C, D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements] Regulations, 2015, forms part of the Annual Report.

SHARE CAPITAL

During the year under review, your Company received the approval of its shareholders to issue upto 2.5 Crores Equity Shares by way of Preferential Allotment to its promoter, Mahindra & Mahindra Limited (“Promoter”) and upto 2.4 Crores Equity Shares by way of Qualified Institutions Placement (“QIP”) and successfully raised a total of Rs. 2,111 Crores through the above issuances made to both its Promoter and a mix of domestic and international Qualified Institutional Buyers.

Preferential Allotment

The Company made a preferential allotment of 2,50,00,000 Equity Shares on 30th November 2017, to its holding company, Mahindra & Mahindra Limited at a price of Rs.422 per Equity Share, including a premium of Rs. 420 per Equity Share, raising a sum of Rs.1,055 Crores.

Qualified Institutions Placement (QIP)

On 7th December, 2017, your Company successfully concluded the QIP issue to Qualified Institutional Buyers aggregating Rs. 1,056 Crores through the issue of 2,40,00,000 Equity Shares of the Face Value of Rs. 2 each at an issue price of Rs. 440 per Equity Share including a premium of Rs. 438 per Equity Share, which is a premium to the price of Rs. 439.63 per share, arrived at as per Regulation 85 of Securities and Exchange Board of India [Issue of Capital and Disclosure Requirements] Regulations, 2009. The QIP launched by your Company received an overwhelming response, as seen by the issue being subscribed multiple times and the strong participation from renowned International and Domestic Institutional Investors.

Consequent to the Preferential Allotment and QIP the issued, subscribed and paid-up Equity Share Capital of the Company stood at Rs.123.55 Crores as at 31st March, 2018, comprising of 61,77,64,960 Equity Shares of the face value of Rs. 2 each, fully paid-up.

With the Promoter maintaining majority shareholding, your Company continues to benefit by leveraging the financial and operational synergies with its Promoter and with the simultaneous QIP issuance, it has been able to diversify its investor base.

Your Company has duly utilised the issue proceeds raised through the Preferential Issue and QIP to augment its long-term resources for meeting business growth and funding requirements, strengthen its capital adequacy, make investments in its Subsidiaries and Joint Venture, for other general corporate purposes and for payment of Issue expenses. This is in line with the issue purpose mentioned in the Explanatory Statement of the Notice of the Extraordinary General Meeting dated 1st November, 2017 and the Placement Document filed with various Regulatory Authorities. Details of these Issues and the end use of funds were furnished to the Audit Committee.

During the year under review, your Company has neither issued shares with differential rights as to dividend, voting or otherwise, nor has issued sweat equity, other than Employee Stock Options under the Employees’ Stock Option Scheme referred to in this Report, during the year under review.

As on 31st March, 2018, none of the Directors of the Company holds instruments convertible into Equity Shares of the Company.

STOCK OPTIONS

During the year under review, on the recommendation of the Nomination and Remuneration Committee of your Company, the Trustees of the Mahindra & Mahindra Financial Services Limited Employees’

Stock Option Trust have granted 62,130 Stock Options to Eligible Employees under the Mahindra & Mahindra Financial Services Limited Employees’ Stock Option Scheme-2010 [“2010 Scheme”]. No new Options have been granted under the Mahindra & Mahindra Financial Services Limited Employees’ Stock Option Scheme-2005 [“2005 Scheme”] [hereinafter collectively referred to as “the Schemes”]. The Company does not have any scheme to fund its employees to purchase the shares of the Company. No employee has been issued stock options during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant.

The Schemes of the Company are in compliance with the Securities and Exchange Board of India [Share Based Employee Benefits] Regulations, 2014 [“SBEB Regulations”] and there were no material changes made to the said Schemes. Messrs. B S R & Co. LLP, Chartered Accountants, Statutory Auditors of the Company, have certified that the abovementioned Schemes have been implemented in accordance with the SBEB Regulations, and the Resolutions passed by the Members for the 2005 Scheme and the 2010 Scheme. The Certificate would be placed at the Annual General Meeting for inspection by Members.

Voting rights on the Shares issued to employees under the aforesaid Schemes are either exercised by them directly or through their appointed proxy.

The details of the Employees’ Stock Options and the Company’s Employees’ Stock Option Trust as required under the SBEB Regulations read with SEBI Circular CIR/CFD/ POLICY CELL/2/2015 dated 16th June, 2015 have been uploaded on the Company’s website and can be accessed at the web-link: http://www. mahindrafinance.com/annual-reports.aspx.

ECONOMY

Global

At 3.8 percent, global growth last year was 0.5 percentage point faster than in 2016 and the strongest since 2011. Two-thirds of countries accounting for about three-fourths of global output experienced faster growth in 2017 than in the previous year [the highest share of countries experiencing a year-over-year growth pickup since 2010]. The preliminary outcome for global growth in 2017 was 0.2 percentage point stronger than forecast, in the October 2017 World Economic Outlook [WEO], with upside surprises in the second half of 2017 in advanced as well as emerging markets and developing economies.

Resurgent investment spending in advanced economies and an end to the investment decline in some commodity exporting emerging markets and developing economies were important drivers of the uptick in global GDP growth and manufacturing activity. Across advanced economies, the 0.6 percentage point pickup in 2017 growth relative to 2016 is explained almost entirely by investment spending, which remained weak since the 2008-09 global financial crisis and was particularly subdued in 2016. Both stronger gross fixed capital formation and an acceleration in stock building contributed to the pickup in investment, with accommodative monetary policy, stronger balance sheets, and an improved outlook helping release pent-up demand for capital goods.

Global growth is projected to strengthen from 3.8 percent in 2017 to 3.9 percent in 2018 and 2019, driven by a projected pickup in growth in emerging markets and developing economies and resilient growth in advanced economies. The forecast for 2018 and 2019 is stronger than in the October 2017 WEO by 0.2 percentage point for each year, with positive revisions compared with the October 2017 WEO for emerging markets and developing economies and especially for advanced economies. The global effects of US fiscal policy changes account for almost half of the global growth upgrade for 2018-19 compared with October. Beyond 2019, global growth is projected to gradually decline to 3.7 percent by the end of the forecast horizon. The slowdown is entirely because of advanced economies, where growth is projected to moderate in line with their modest potential growth; growth across emerging markets and developing economies is expected to stabilize close to the current level. (Source: IMF)

Domestic

Domestic economic activity shrugged off the loss of speed that had characterised the period Q1:2016-17 to Q1:2017-18 and a turning point appears to have taken hold in Q2-Q3, with lead indicators pointing to further acceleration in Q4. In terms of aggregate demand, the drivers around this inflexion are shifting, with consumption-led growth of the recent past handing over the baton to investment, which had restrained growth since Q3:2016-17. At the same time, the strong impetus from fiscal spending during Q3:2016-17 to Q1:2017-18 appears to be waning and the rapid pace of import growth is sapping net external demand. On the supply side, the pickup in industrial output from Q2:2017-18 and the strengthening of construction activity in the services sector from Q1 are noteworthy. Meanwhile, agriculture and allied activities have turned out to be resilient to temporary weather disruptions in both kharif and rabi sowing seasons and going by recent estimates of foodgrains production, the outlook appears better than before.

Consumer price inflation rose sharply in Q3:2017-18, driven up by a spike in food prices and by the disbursement of enhanced House Rent Allowance (HRA) for central government employees, the latter alone contributing an estimated 35 basis points. It moderated somewhat in Q4 on a delayed seasonal easing of prices of vegetables. Industrial input costs increased through H2:2017-18, tracking movements in international commodity prices. Wage pressures have remained moderate in both the organised and rural sectors. The increase in HRA for central government employees, which became effective from July 2017 and continued to accumulate till December 2017, shaped the path of headline inflation during Q3, with unseasonal hardening of prices of vegetables, accentuating a spike to 4.9 per cent in November. While prices of vegetables did undergo a shallower than usual moderation in December, an unfavourable base effect came into play, pulling up inflation to a peak of 5.2 per cent in December. In Q4, headline inflation moderated with a fall in momentum due to a delayed but steep reversal in prices of vegetables.

A stark feature of India’s recent growth experience has been the protracted downturn in investment, however, a turnaround set in during Q2:2017-18. Gross Fixed Capital Formation (GFCF) strengthened further to touch a six-quarter high in Q3. The share of GFCF in GDP, which was trapped in a downturn from a high of 34.3 per cent in 2011-12 to 30.3 per cent in 2015-16, broke free and increased to 31.4 per cent in 2017-18. As alluded to earlier, this pick-up in the investment rate could be signalling a turning point in the cyclical component of growth oscillations in India and if sustained by a determined policy push, it could produce a level shift in the trajectory of the Indian economy. Capital goods production - a key element of investment demand - turned around in August 2017 and clocked a 19-month high in terms of growth rates in January 2018. During 2017-18 so far (up to December), the construction of highway projects is on the rise and is expected to have improved further in Q4.

Going forward, a key risk to the inflation outlook is the risk of fiscal slippages in a scenario of rising aggregate demand. As noted in the MPC resolution of February 2018, apart from the direct impact on inflation, the fiscal risks could also engender a broader weakening of macro-financial conditions. The revised guidelines for arriving at the MSPs for kharif crops proposed in the Union Budget 2018-19, along with proposed increase in customs duty on a number of items, is likely to pushup inflation over the year. In addition, how various state governments implement and disburse HRA increases would have a considerable bearing on CPI housing inflation and consequently on the headline inflation trajectory, albeit statistically, during 2018-19; therefore, the latter should be looked through for monetary policy purposes, other than for their second-round effects. Although the central government’s HRA effects on CPI inflation would gradually wane from July 2018, this moderating impact could be more than offset if several state governments simultaneously implement HRA increases in H2:2018-19. (Source: RBI)

Finance

During the current year, the Reserve Bank of India (RBI) held six Bi-monthly Monetary Policy Committee meetings. The Policy Repo rates under the Liquidity Adjustment Facility (LAF) was at 6.25% at the beginning of the year. During the year, the RBI reduced the Policy Repo rates by 0.25% once in its third Bi-monthly Monetary Policy Committee meeting to 6.00% and since then maintained at such levels.

Yields in the government securities (G-Sec) has shown continuous increase through the year since the reduction of policy rates. Yields on the 10 year benchmark paper has increased by around 150 bps from the lows. A sharp reduction in G-Sec yields were seen in the month of March when the government announced its intent to reduce its borrowing in the first half. However the reduced rates were short lived and within a month the yields were higher than preannouncement. An important element of the yield rising has been the continuous rise in the crude prices (nearing -80/barrel). The depreciation of rupee is not helping either which shall lead to inflationary pressure which together is resulting in rising yields.

Private Placement Issues of Non-Convertible Debentures

During the year under review, your Company issued secured redeemable non-convertible debentures (“NCDs”) aggregating to Rs. 4,497.80 Crores on a private placement basis, in various tranches.

As specified in the respective offer documents, the funds raised from NCDs were utilised for the purpose of financing, repayment of dues of other financial institutions/Banks or for long term working capital.

Public Issuance of Non-Convertible Debentures

Your Company continues to broaden the liability mix by bringing in new instruments as well as diversifying the investor base and profile. During the year under review, your Company successfully raised Rs. 1,150.5 Crores through its second public issuance of 1,15,05,313 Unsecured Subordinated Redeemable Non-Convertible Debentures (“NCDs”) of face value of Rs. 1,000 each. With this issuance, approximately 5% of your Company’s borrowing is funded through this instrument. The NCDs were allotted on 24th July, 2017 and listed on BSE Limited on 26th July, 2017.

The net proceeds received from the Public Issue were used for the purpose of onward lending, financing, refinancing the existing indebtedness of the Company, long term working capital requirements, Issue expenses and for general corporate purposes. Details of the Issue and the end use were furnished to the Audit Committee.

The Company has been regular in making payments of principal and interest on the NCDs. There are no NCDs which have not been claimed by investors or not paid by the Company after the date on which the NCDs became due for redemption.

Rupee Denominated Medium Term Note (MTN)

As a risk management measure diversification of its resources is one of the focus areas of the Company. To this end, your Company has received approval from the Reserve Bank of India for issuance of Masala Bonds. Your Company has also updated its Offering Circular of Rupee Denominated Medium Term Note (MTN) programme, listed on the Singapore Exchange Securities Trading Limited, and subject to market conditions, plans to issue bonds under the MTN programme during the current year.

INVESTOR RELATIONS

Your Company continuously endeavors to improve its engagement with Domestic and International investors/analysts through multiple mechanisms, including structured conference-calls, individual meetings, Telepresence meetings, participating in investor conferences and undertaking quarterly and annual earnings calls. Your Company attended multiple investor meets organised by reputed Global and Domestic Broking Houses during the year, both in India and abroad, to communicate details of its performance, important regulatory and market developments and exchange of information. These interactions with institutional shareholders, fund managers and analysts are based on generally available information that is accessible to the public on a non-discriminatory basis. Your Company uploads the transcript of the quarterly earnings call on its website which can be accessed by existing and potential investors and lenders.

Your Company believes in transparent communication and building a relationship of mutual understanding and trust. Your Company further ensures that critical information about the Company is available to all the investors by hosting all such information on the Company’s website.

CAPITAL ADEQUACY

Consequent upon the allotment of Equity Shares issued on a Preferential Allotment basis to the Promoter and through a Qualified Institutions Placement to Qualified Institutional Buyers, the paid-up share capital of the Company has increased to Rs.123.6 Crores as on 31st March, 2018 from Rs. 113.8 Crores as on 31st March, 2017. The securities premium account has also increased to Rs. 4,113.2 Crores from Rs.2,025.6 Crores.

As a result of the increased net worth, your Company was able to enhance the Capital to Risk Assets Ratio (CRAR) to 21.9 % as on 31st March, 2018, well above the minimum requirement of 15% CRAR prescribed by the Reserve Bank of India. Out of the above, Tier I capital adequacy ratio stood at 16.0% and Tier II capital adequacy ratio stood at 5.9%, respectively.

RBI GUIDELINES

The Company has complied with all the applicable regulations of the Reserve Bank of India (RBI).

As a prudent practice, your Company makes accelerated provisioning for Non-Performing Assets (NPAs) than that required by RBI for NBFCs. Your Company continues to make a general provision at 0.40% on the standard assets outstanding as mandated by the RBI.

DISCLOSURE PERTAINING TO GOLD LOAN AUCTION(S)

During the fiscal 2016-17, your Company conducted the auction of its Gold Stock and sold the entire stock. With this auction the Company has closed its entire gold loan business.

CREDIT RATING

The credit rating details of the Company as on 31st March, 2018 were as follows:

Rating Agency	Type of Instrument	Rating*	Remarks
India Ratings & Research Private Limited	Commercial Paper Programme	‘IND A1 ’	The ‘A1 ’ rating indicates the Highest Level of Rating. Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.
	Long-term Debt Instruments and Subordinated Debt Programme	‘IND AAA/Stable’
CARE Ratings Limited (Formerly known as Credit Analysis & Research Limited)	Long-term Debt Instruments and Subordinated Debt Programme	‘CARE AAA/Stable’	The ‘AAA’ ratings denote the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk.
Brickwork Ratings India Private Limited	Long-term Subordinated Debt Programme	‘BWR AAA/Stable’
CRISIL Limited	Fixed Deposit Programme	‘CRISIL FAAA/Stable’
	Long-term Debt Instruments, Subordinated Debt Programme and Bank Facilities	‘CRISIL AA /Stable’	The ‘AA ’ rating indicates a high degree of safety with regard to timely payment of financial obligations. Such instruments carry very low credit risk.
	Short-term Debt and Bank Loans	‘CRISIL A1 ’	The ‘A1 ’ rating indicates the Highest Level of Rating. Instruments with this rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk.

* The ratings mentioned above were reaffirmed by the Rating Agencies during the Financial Year 2017-18. With the above rating affirmations, your Company continues to enjoy the highest level of rating from all major rating agencies at the same time.

ACHIEVEMENTS

Your Company won several awards and accolades during the year under review. Select few awards/ recognition are enumerated hereunder:

Corporate Governance

India’s Most Trusted Companies Awards 2017” as per the Research Report 2017 by Media Research Group, MRG.

Listed amongst the top 10 companies with a high Corporate Governance score in a study jointly conducted by International Finance Corporation (IFC), BSE Limited (BSE) and Institutional Investor Advisory Services (IiAS).

Business & Marketing:

- Ranked 108th in the “Dun & Bradstreet India’s Top 500 Companies 2017” based on Net Profit.

- Adjudged as one of the “Best BFSI Brands 2018” by the Economic Times.

- Award for the ‘Most Effective use of Direct Marketing to Rural Consumers’ at the Rural Marketing Forum & Awards 2018 for MF SUTRADHAAR initiative.

Ranked 13th based on Total Income in “Dun & Bradstreet India’s Leading BFSI Companies 2018” among NBFCs, Financial Institutions and Financial Services Companies.

Won the PRCI (Public Relations Council of India) Collateral Awards 2018 in the following categories:

a. Crystal Award for Corporate Advertising Campaign (SME Ad campaign)

b. Crystal Award for Radio/Jingle (SME Radio Campaign)

c. Gold Award for Rural or Development -Communication (MF SUTRADHAAR Program)

d. Gold Award for Financial Communication (Suvidha Loans Communication Campaign)

e. Silver Award for Radio Communication (SME Radio Campaign)

f. Appreciation Award for Diary 2018

g. Appreciation Award for In-house Digital Newsletter (In-box Select)

h. Appreciation Award for Annual Report

Human Resources

Listed in Aon Best Employer List 2017, as Aon Best Employer

Certified Top 50 India’s Best Companies to Work for - 2017 by Great Place to work.

Adjudged Runner-up in the BusinessWorld HR Excellence Award 2017 by BusinessWorld.

“Best Learning & Development Strategy Award” at World HRD Congress 2017.

Listed in the Avtar and Working Mothers Best Companies to work for.

Appeared in Top 100 Record Holders for Excellence in Learning Sessions.

Attained Level 5 certification for People Capability Maturity Model (PCMM) Level 5.

CSR & Sustainability

Honoured with IDF CSR Award by Indian Development Foundation (IDF) for excellent participation in Resource Mobilization for Humanitarian Projects.

Bestowed with the Equal Opportunity Employer Award by Sarthak Educational Trust for ensuring equal employment opportunities and sustainable employment prospects to person with disability.

Listed in Dow Jones Sustainability Index (DJSI) Emerging Markets category for the 5th consecutive year.

Included in the “Sustainability Yearbook 2018” released by RobecoSAM, being the only Indian Financial Company in Diversified Financial Services and Capital Markets sector to be selected.

Information & Technology

Pride of India Award” for Best Enterprise Learning Platform

FIXED DEPOSITS AND LOANS/ ADVANCES

Your Company offers a bouquet of Fixed Deposit schemes to suit the investment needs of various classes of investors. These Deposits carry attractive interest rates with superior service enabled by robust processes and technology. In order to tap rural and semi-urban savings and reach out to the farthest customers, your Company continues to expand its network and make its presence felt in the most remote areas of the country.

During the year, CRISIL has reaffirmed a rating of ‘CRISIL FAAA/Stable’ for your Company’s Fixed Deposits. This rating represents the highest degree of safety regarding timely servicing of financial obligations and carries the lowest credit risk. Your Company’s deposits continue to be a preferred investment amongst the investors.

As on 31st March, 2018, your Company has mobilised funds from Fixed Deposits to the tune of Rs. 3,137.37 Crores, with an investor base of over 1,30,413 investors.

Your Company continues to serve the investors by introducing several customer centric measures on an ongoing basis to further strengthen its processes in sync with the requirements of the Fixed Deposit holders. The Company communicates various intimations via SMS, e-mails, post, etc., to its investors as well as sends reminder emails to clients whose TDS is likely to be deducted before any payout/ accrual. Your Company also provides online renewal facility, online generation of TDS certificates from customer/broker portal and Seamless Investment process for employees.

During the year under review, your Company has rolled out several initiatives aimed at offering a superior customer experience. Some key ones are:

Increased the number of offices from 198 in the previous fiscal to 304 offices in the current fiscal for collection of Fixed Deposits.

Customer self-profile update on the Fixed Deposit-Customer Portal available on the Company’s website.

Default auto renewal of Fixed Deposits option to facilitate timely renewal of deposits in case the physical request for renewal of Deposits is not received four weeks prior to the maturity date.

Introduced online Swift Loan[s] against Deposits.

Convenience of investment made available through mobile phones.

As at 31st March, 2018, 4,662 deposits amounting to Rs. 8.61 Crores had matured for payment and remained unclaimed. The unclaimed deposits have since reduced to 3,761 deposits amounting to Rs. 6.10 Crores. There has been no default in repayment of deposits or payment of interest during the year.

Your Company being a Non-Banking Financial Company, the disclosures required as per Rule 8 [5] [v] and [vi] of the Companies [Accounts] Rules, 2014 read with sections 73 and 74 of the Companies Act, 2013, are not applicable to it.

The information pursuant to Clause 35[1] of Master Direction DNBR.PD.002/03.10.119/2016-17 dated 25th August, 2016 issued by Reserve Bank of India on Non-Banking Financial Companies Acceptance of Public Deposits [Reserve Bank] Directions, 2016, regarding unpaid/unclaimed public deposits as on 31st March, 2018, is furnished below:

i. total number of accounts of public deposits of the Company which have not been claimed by the depositors or not paid by the Company after the date on which the deposit became due for repayment: 4,662.

ii. the total amounts due under such accounts remaining unclaimed or unpaid beyond the dates referred to in clause [i] as aforesaid: Rs. 8,60,67,196.

Depositors were intimated regarding the maturity of deposits with a request to either renew or claim their deposits. Your Company continues to send intimation letters via registered post every 3 months to all those Fixed Deposit holders whose deposits have matured as well as to those whose deposits remain unclaimed. Where the Deposit remains unclaimed, follow-up action is also initiated through the concerned agent or branch.

Pursuant to section 125[2] [i] of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority [Accounting, Audit, Transfer and Refund] Rules, 2016 [“the IEPF Rules”] as amended from time to time, matured Deposits remaining unclaimed for a period of seven years from the date they became due for payment are required to be transferred to the Investor Education and Protection Fund [IEPF] Authority established by the Central Government. The concerned depositor can claim the Deposit from the IEPF Authority by following the procedure laid down in the IEPF Rules.

During the year, an amount of Rs.0.02 Crores has been transferred to the IEPF Authority.

During the year under review, the Company has not given any loans and advances in the nature of loans to its subsidiaries or associate or loans and advances in the nature of loans to firms/companies in which Directors are interested.

Accordingly, the disclosure of particulars of loans/ advances, etc., as required to be furnished in the Annual Accounts of the Company pursuant to Regulation 34 read with paragraph A of Schedule V of the SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015 is not applicable to the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS IN SECURITIES

Pursuant to section 186[11] of the Companies Act, 2013 [“the Act”], the provisions of section 186 [4] of the Act requiring disclosure in the Financial Statements of the full particulars of the loans made and guarantees given or securities provided by a NonBanking Financial Company in the ordinary course of its business and the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient of the loan or guarantee or security are exempted from disclosure in the Annual Report.

Further, pursuant to the provisions of section 186 (4) of the Act, the details of investments made by the Company are given in the Notes to the Financial Statements.

SUSTAINABILITY INITIATIVES

Sustainability has always been a key success factor for the ambit of the Company’s businesses. Through its unique business model the Company is making a difference in the lives of many by addressing the essential requirements of people in rural and semi-urban parts of India. Your Company’s businesses focus on key necessities of people and enable them to meet their aspirations through a wide-range of financial products and services offered by it. By providing the right set of opportunities in the remote areas and handholding its customers to advance in their lives, your Company continues to make positive contribution to multiple stakeholders. Your Company lays strong emphasis on customer centricity with its customer base spread across more than 3.5 Lakh villages in India with majority of them belonging to the earn and pay segment.

Your Company commenced its journey towards reporting sustainability performance since 2008-09 through Mahindra Group’s Sustainability Report and in the year 2012-13 your Company released its first standalone Sustainability Report. In the reporting year the Company released its fifth Sustainability Report for the Financial Year 2016-17 with the theme ‘Towards Value Creation’ based on the Global Reporting Initiative’s (GRI) G4 Guidelines which highlights its progress and efforts on creating long term benefits and opportunities on social, environmental and economic dimensions for all its stakeholders. This Report is hosted on your Company’s website at the web-link: www.mahindrafinance.com/sustainability.aspx.

Your Company continued to focus on sustainability awareness for different stakeholders by building on the initiatives of the previous years as also initiating new ones. In the year under review, your Company formulated its Sustainability Policy and developed a new Sustainability Roadmap aligned to the Mahindra Group’s Sustainability Framework to ensure mutual initiatives for sustainability across the Group. Interventions on energy efficiency, technology deployment and waste management have been taken throughout the reporting year at different locations. The Company continued its focus on encouraging employees and field staff in adopting Road Safety measures.

Your Company has been listed on the Dow Jones Sustainability Index (DJSI) Emerging Market Trends for the fifth consecutive year. Your Company is the only Company from amongst the Diversified Financial Services Companies in India to have made it to this list. To be incorporated in DJSI, companies are assessed and selected based on their long term Environmental, Social and Governance (ESG) management plans. Your Company got selected in ‘The Sustainability Yearbook’ 2018 being the only Financial Services Sector Company to qualify amongst 9 companies from India. This signifies your Company being amongst the top Sustainability performers in Diversified Financial Services Sector across the world based on Corporate Sustainability Assessment done by RobecoSAM.

In addition to this, your Company continues to report on Carbon Disclosure Project (CDP) since the Financial Year 2011-12. CDP seeks information on management of carbon emissions covering world’s largest companies and how they are geared up to mitigate challenges pertaining to climate change and global warming in future. During the reporting year, your Company retained CDP Performance Band - B which affirms that the Company is taking coordinated action on climate change issues. Your Company made proactive efforts to reduce CO2 emissions (carbon footprint) through Project ‘Mahindra Hariyali’, by planting over 1.2 Lakh saplings throughout the country.

Your Company is gearing up to be future ready by making sustainability and climate change an integral part of the risk framework and taking measures to mitigate and manage them. Weather reports are assessed on a regular basis and aligned with business operations to protect the customers and minimise the risk impact. Your Company is well equipped to enable its customers and communities progress through its inclusive and sustainable business model.

BUSINESS RESPONSIBILITY REPORT

The ‘Business Responsibility Report’ (BRR) of your Company for the year 2017-18 forms part of this Annual Report as required under Regulation 34(2)(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is appended as Annexure II. Your Company is building an inclusive organization by engaging with stakeholders and creating value in the ecosystem it operates in. Your Company’s businesses focus on the key necessities of people and enable them to earn their livelihood through its varied portfolio of financial products and services. Through its wide network of branches with locally-recruited employees, strong and lasting relationships with its stakeholders, large customer base, vast experience and market knowledge, your Company is providing financial resources to underserviced regions of the country and building livelihood for such sections of the population, who are aspiring for a better living in the villages.

The BRR can also be accessed on the Company’s website at the web-link: www.mahindrafinance. com/sustainability.aspx.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

With an objective to empower rural India and transform the rural landscape, your Company during the year, continued to undertake several initiatives in the key thrust areas of Healthcare, Education (including Livelihood) and Environment. It is only through these sustained and consistent efforts that your Company can build and consolidate its CSR initiatives which contribute to nation building.

In the year under review, your Company organised a nationwide blood donation drive, conducted health check-up camps, Swachh Bharat activities, visits to Municipal schools, orphanages, differently-abled homes and old-age homes to re-affirm its pledge to the society.

Your Company also contributed to the environment through planting of over one Lakh trees thus helping restore the diminishing green cover in the country. In the area of public health, your Company sponsored Lifeline Express, a hospital on wheels program, through which medical care and treatment was provided to communities who do not have access to any medical facilities. The Lifeline Express executed in association with Impact India Foundation, catered to the medical needs of 8,010 underprivileged people in Balharshah, in the State of Maharashtra.

In an effort to unleash the potential of the rural population, during the year your Company implemented some of the notable ongoing projects such as providing scholarships to 2,500 undergraduate and 500 graduate students, conducting vocational training for 513 rural youths and Drivers’ training for 220 women, setting-up a vocational skill building center with an aim to train 250 People with Disability and a donation of 14 ambulances that have made access to primary healthcare centers easy for 12,000 tribal and rural patients across the nation. Your Company has expanded the Medical Equipment Donation project to contribute equipment to 30 family planning centers and supported the maintenance of two more Thalassemia Day Care Centers apart from the four existing ones in Maharashtra and one in Jharkhand. Additionally, in the area of healthcare, your Company contributed for the launch of a Maternal & Child Health Care project which provides nutritional supplementation to anemic pregnant and lactating women, adolescents and malnourished children in the areas of Singbhum (Jharkhand), Bhubaneswar (Odisha), Palghar and Thane (Maharashtra).

In the year under review, your Company continued to provide assistance to over 9,400 Nanhi Kalis which supports the education of underprivileged girls. Your Company also continued its commitment to projects such as Mahindra Pride Schools, which helped in providing livelihood training to 2,612 youths from socially and economically disadvantaged communities.

During the year under review, your Company has spent Rs. 27.16 Crores on CSR projects/programs. The amount equal to 2% of the average net profit for the past three financial years required to be spent on CSR activities was Rs. 27.07 Crores. Your Company is in compliance with the statutory requirements in this regard.

CSR COMMITTEE

The CSR Committee presently comprises of Mr. Piyush Mankad (Chairman), Mr. Ramesh Iyer, Mr. V. Ravi and Dr. Anish Shah. The Committee, inter alia, monitors the CSR activities.

CSR POLICY

The CSR Policy of the Company is hosted on the Company’s website at the web-link: http://www. mahindrafinance.com/csr.aspx and a brief outline of the CSR Policy and the CSR initiatives undertaken by the Company during the year as per Annexure prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been appended as Annexure III to this Report.

EXTRACT OF ANNUAL RETURN

Pursuant to sub-section 3(a) of section 134 and subsection (3) of section 92 of the Companies Act, 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return as at 31st March, 2018 forms part of this Report and is appended as Annexure IV.

BOARD MEETINGS, ANNUAL GENERAL MEETING AND EXTRAORDINARY GENERAL MEETING

The calendar of the Board/Committee Meetings and the Annual General Meeting is circulated to the Directors in advance to enable them to plan their schedule for effective participation at the respective meetings. Additional Board Meetings are convened by giving appropriate notice to address business exigencies. At times certain decisions are taken by the Board/Committee through circular resolutions.

All the decisions and urgent matters approved by way of circular resolutions are placed and noted at the subsequent Board/Committee Meeting.

The Board of Directors met seven times during the year under review, on 25th April, 2017, 24th July, 2017, 6th October, 2017, 25th October, 2017, 1st November, 2017, 24th January, 2018 and 16th March, 2018. The requisite quorum was present for all the Meetings. The maximum time gap between any two Meetings was not more than one hundred and twenty days. These Meetings were well attended. The 27th Annual General Meeting [AGM] of the Company was held on 24th July, 2017.

During the year under review, an Extraordinary General Meeting [EGM] of the Members was held on 29th November, 2017 to approve the issuance of Equity Shares on Qualified Institutions Placement to Qualified Institutional Buyers, approve Related Party transaction for Preferential Issue of Shares to Mahindra & Mahindra Limited [M&M], the holding company and accord consent for issue of Equity Shares to M&M on a Preferential Allotment basis.

Detailed information on the Meetings of the Board, its Committees, the AGM and EGM is included in the Report on Corporate Governance, which forms part of this Annual Report.

MEETINGS OF INDEPENDENT DIRECTORS

The Independent Directors met twice during the year under review, on 23rd January, 2018 and 15th March, 2018. The Meetings were conducted in an informal manner without the presence of the Wholetime Directors, the Non-Executive Non-Independent Directors, or any other Management Personnel.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company has various Committees which have been constituted as a part of good corporate governance practices and the same are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

Your Company has an adequately qualified and experienced Audit Committee with Mr. C. B. Bhave as the Chairman and Mr. Dhananjay Mungale, Mr. M. G. Bhide, Ms. Rama Bijapurkar, Mr. Piyush Mankad, Mr. V S. Parthasarathy and Dr. Anish Shah as Members.

The recommendations of the Audit Committee were duly approved and accepted by the Board during the year under review.

The other Committees of the Board are:

i] Nomination and Remuneration Committee

ii] Stakeholders Relationship Committee

iii] Corporate Social Responsibility Committee

iv] Risk Management Committee

v] Asset Liability Committee

vi] Committee for Strategic Investments

vii] IT Strategy Committee

The details with respect to the composition, powers, roles, terms of reference, Meetings held and attendance of the Directors at such Meetings of the relevant Committees are given in detail in the Report on Corporate Governance of the Company which forms part of this Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Directors

Dr. Anish Shah, Non-Executive Non-Independent Director, retires by rotation at the forthcoming Annual General Meeting and, being eligible, offers himself for reappointment. The detailed profile of Dr. Anish Shah has been included in the Notice convening the ensuing AGM.

All the Directors of the Company have confirmed that they satisfy the fit and proper criteria as prescribed under paragraph 69[1][iv] of Chapter XI of RBI Master Direction No. DNBR. PD. 008/03.10.119/2016-17 dated 1st September, 2016 and that they are not disqualified from being appointed as Directors in terms of section 164[2] of the Companies Act, 2013.

None of the Independent Directors are due for re-appointment.

Key Managerial Personnel

Mr. Ramesh Iyer, Vice-Chairman & Managing Director, Mr. V Ravi, Executive Director & Chief Financial Officer and Ms. Arnavaz M. Pardiwalla, Company Secretary of the Company have been designated as the Key Managerial Personnel of the Company [KMP] pursuant to the provisions of sections 2[51] and 203 of the Companies Act, 2013 read with the Companies [Appointment and Remuneration of Managerial Personnel] Rules, 2014.

There has been no change in the KMP during the year under review.

Declaration by Independent Directors The Company has received declarations from all the Independent Directors of the Company confirming that they fulfill the criteria of independence as prescribed under sub-section [6] of section 149 of the Companies Act, 2013 and the Securities and Exchange Board of India [Listing Obligations and Disclosure Requirements] Regulations, 2015.

Directors’ Responsibility Statement

Pursuant to the provisions of section 134[5] of the Companies Act, 2013, [“the Act”] your Directors, based on the representations received from the Operating Management and after due enquiry, confirm that:

i. i n the preparation of the annual accounts for financial year ended 31st March, 2018, the applicable accounting standards have been followed and there are no material departures in adoption of these standards.

ii. they have in consultation with the Statutory Auditors selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2018 and of the profit of the Company for the year ended on that date.

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. they have prepared the annual accounts for financial year ended 31st March, 2018 on a going concern basis.

v. they have laid down adequate internal financial controls to be followed by the Company and that such internal financial controls were operating effectively during the financial year ended 31st March, 2018.

vi. they have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively during the financial year ended 31st March, 2018.

Performance Evaluation of the Board

The Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“the Listing Regulations”) stipulate the evaluation of the performance of the Board, its Committees, Individual Directors and the Chairperson.

The Company has formulated a Policy for performance evaluation of the Independent Directors, the Board, its Committees and other individual Directors which includes criteria for performance evaluation of the Non-Executive Directors and Executive Directors.

The evaluation framework for assessing the performance of Directors comprises of various key areas such as attendance at Board and Committee Meetings, quality of contribution to Board discussions and decisions, strategic insights or inputs regarding future growth of the Company and its performance, ability to challenge views in a constructive manner, knowledge acquired with regard to the Company’s business/activities, understanding of industry and global trends, etc.

The evaluation involves self-evaluation by the Board Member and subsequent assessment by the Board of Directors. A member of the Board will not participate in the discussion of his/her evaluation.

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of 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 the Directors individually (including Independent Directors).

Feedback was sought by way of well-defined and structured questionnaires covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board culture, areas of responsibility, execution and performance of specific duties, obligations and governance, compliance, oversight of Company’s subsidiaries, etc.

A separate exercise was carried out by the Nomination and Remuneration Committee of the Board to evaluate the performance of individual Directors who were evaluated on several parameters such as level of engagement and contribution, independence of judgment safeguarding the interest of the Company and its minority shareholders and knowledge acquired with regard to the Company’s business/activities.

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 Directors and NonExecutive Directors.

The performance evaluation of the Independent Directors was carried out by the entire Board excluding the Director being evaluated. Qualitative comments and suggestions of Directors were taken into consideration by the Chairman of the Board and the Chairman of the Nomination and Remuneration Committee. The Directors have expressed their satisfaction with the evaluation process.

Familiarisation Programme for Independent Directors

The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters along with details of number of programmes and number of hours spent by each of the Independent Directors during the Financial Year 2017-18, in terms of the requirements of SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015 are available on the website of the Company and can be accessed at the web-link: http://www.mahindrafinance.com/ pdf/familiarisation-programme for-IDs.pdf

Policies on Appointment of Directors and Remuneration of Directors, Key Managerial Personnel and Employees

In accordance with the provisions of section 134[3] [e] of the Companies Act, 2013 [“the Act”] read with section 178[2] of the Act and Regulation 17 of the SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015, your Company has adopted a Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management, which inter alia, includes the criteria for determining qualifications, positive attributes and independence of Directors.

Your Company has also adopted the Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel and Employees of the Company in accordance with the provisions of sub-section [4] of section 178, and the same are appended as Annexure V-A and Annexure V-B, respectively and form part of this Report.

The criteria for determining qualifications, positive attributes and independence of a Director and the Remuneration Policies for Directors, Key Managerial Personnel and other employees have been discussed in detail in the Report on Corporate Governance.

AUDITORS

Statutory Auditors

Messrs. B S R & Co. LLP, Chartered Accountants [ICAI Firm Registration No.101248W/W-100022], were appointed as the Statutory Auditors of the Company to hold office for a period of 5 years, commencing from the conclusion of the 27th Annual General Meeting [“AGM”] held on 24th July, 2017 till the conclusion of the 32nd AGM of the Company to be held in the year 2022, subject to ratification of their appointment by the Members at every AGM, as may be applicable.

As required under the provisions of section 139[1] of the Companies Act, 2013, the Company has received a written consent from Messrs. B S R & Co. LLR Chartered Accountants to their appointment and a Certificate, to the effect that their appointment, if made, would be in accordance with the Companies Act, 2013 and the Rules framed thereunder and that they satisfy the criteria provided in section 141 of the Companies Act, 2013.

The Members are requested to ratify the appointment of the Statutory Auditors as aforesaid and fix their remuneration.

The Auditors’ Report is unmodified and does not contain any qualification, reservation, adverse remark or disclaimer.

Secretarial Auditor

The Board of Directors of the Company has appointed Messrs. KSR & Co., Company Secretaries LLP to conduct the Secretarial Audit of the Company pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies [Appointment and Remuneration of Managerial Personnel] Rules, 2014. In accordance with the provisions of sub-section [1] of section 204, the Secretarial Audit Report for the Financial Year 2017-18 is appended to this Report as Annexure VI.

The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

Reporting of Frauds by Auditors

During the year under review, the Statutory Auditors and the 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 need to be mentioned in this Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts/arrangements/transactions entered into by the Company during the Financial Year with related parties were in the ordinary course of business and on an arm’s length basis.

During the year under review, your Company had entered into a Material Related Party Transaction, i.e. transaction exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, with Mahindra & Mahindra Limited, the Holding Company. This transaction too was in the Ordinary Course of Business of your Company and was at Arm’s Length Basis, details of which, as required to be provided under section 134[3][h] of the Companies Act, 2013 are disclosed in Form AOC-2 as Annexure VII and forms part of this Annual Report.

The Policy on Related Party Transactions as approved by the Board of Directors of the Company is uploaded on the website of the Company and same can be accessed on the web-link: http://www. mahindrafinance.com/policies.aspx.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

No material changes and commitments have occurred after the closure of the Financial Year 2017-18 till the date of this Report, which would affect the financial position of your Company.

RISK MANAGEMENT POLICY

Your Company has a comprehensive Risk Management Policy in place and has laid down a well-defined risk management framework to identify, assess and monitor risks and strengthen controls to mitigate risks. Your Company has established procedures to periodically place before the Risk Management Committee and the Board of Directors, the risk assessment and minimisation procedures being followed by the Company and steps taken by it to mitigate these risks.

The Risk Management Policy, 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. The 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.

The development and implementation of Risk Management Policy adopted by the Company is discussed in detail in the Management Discussion and Analysis chapter, which forms part of this Annual Report.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company promotes ethical behaviour in all its business activities and has established a vigil mechanism for its Directors, Employees and Stakeholders associated with the Company to report their genuine concerns. The Vigil Mechanism as envisaged in the Companies Act, 2013 and the Rules prescribed thereunder and the Listing Regulations is implemented through the Whistle Blower 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 per the Whistle Blower Policy implemented by the Company, the Employees, Directors, customers, dealers, vendors, suppliers, or any Stakeholders associated with the Company are free to report illegal or unethical behaviour, actual or suspected fraud or violation of the Company’s Codes of Conduct or Corporate Governance Policies or any improper activity to the Chairman of the Audit Committee of the Company or Chairman of the Company or Convenor of the Corporate Governance Cell.

The Whistle Blower Policy provides for protected disclosure and protection to the Whistle Blower. Under the Whistle Blower Policy, the confidentiality of those reporting violation(s) is protected and they are not subject to any discriminatory practices. Protected disclosures can also be made by sending an email at the designated email id : mmfsl_whistleblower@ mahindra.com.

The Whistle Blower Policy has been appropriately communicated within the Company and is available on the website of your Company at the web-link: http://www.mahindrafinance.com/pdf/MMFSL VigilMechanism.pdf

No personnel have been denied access to the Audit Committee.

SUBSIDIARIES, JOINT VENTURE AND ASSOCIATES

The Company’s subsidiaries and joint venture continue to contribute to the overall growth in revenues and overall performance of your Company.

A Report on the performance and financial position of each of the subsidiaries and the joint venture company included in the Consolidated Financial Statements and their contribution to the overall performance of the Company is provided in Form AOC-1 as Annexure A to the Consolidated Financial Statements and forms part of this Annual Report.

The Policy for determining material subsidiaries as approved by the Board is hosted on the Company’s website and can be accessed at the web-link: http:// www.mahindrafinance.com/policies.aspx.

SUBSIDIARIES

Mahindra Insurance Brokers Limited

During the year under review, Mahindra Insurance Brokers Limited (MIBL), the subsidiary in the business of Direct and Re-insurance Broking, serviced approximately 2.59 million insurance cases, with a total of 20,58,613 cases for both Life and Non-Life Retail business. The customized Life insurance cover “Mahindra Loan Suraksha” (MLS) increased from 5,82,949 lives covered with a Sum Assured of Rs. 18,027.6 Crores in the Financial Year 2016-17 to 6,85,264 lives covered with a Sum Assured of Rs. 21,359.2 Crores in the Financial Year 2017-18. A substantial portion of MLS continues to be covered in the rural markets.

MIBL achieved a growth of 31% in Gross Premium facilitated for the Corporate and Retail business lines, increasing from Rs. 1,567.9 Crores in the Financial Year 2016-17 to Rs. 2,049.1 Crores in the Financial Year 2017-18. The Total Income increased by 41% from Rs. 174.2 Crores in the Financial Year 201617 to Rs. 245.1 Crores in the Financial Year 2017-18. The Profit Before Tax (PBT) recorded a marginal degrowth of 0.6% at Rs.81.2 Crores as compared to Rs.81.7 Crores in the same period of the previous year. The Profit After Tax (PAT) recorded a degrowth of 1.5% at Rs.52.2 Crores as against Rs.53.0 Crores in the same period of the previous year.

MIBL has been able to reach the benefit of insurance to over 2,00,000 villages across India.

Sale of 1,28,866 Equity Shares representing 5% of the total share capital of MIBL

During the year, your Company sold 1,28,866 Equity Shares aggregating 5% of the share capital of MIBL in favour of Inclusion Resources Private Limited for an overall consideration of Rs. 65 Crores, resulting in a profit of Rs. 65 Crores on sale of this investment. Post the sale, the shareholding of your Company stands reduced from 85% to 80% of MIBL’s share capital.

Mahindra Rural Housing Finance Limited

Mahindra Rural Housing Finance Limited (MRHFL), the Company’s subsidiary in the business of providing loans for purchase, renovation, construction of houses to individuals in the rural and semi-urban areas of the country, registered a total income of Rs. 1,000.0 Crores as compared to Rs. 703.4 Crores for the previous year, registering a growth of 42%. Profit before tax was 77% higher at Rs.224.6 Crores as compared to Rs. 126.9 Crores for the previous year. Profit after tax was 75% higher at Rs.145.5 Crores as compared to Rs. 83.0 Crores for the previous year.

During the year under review, MRHFL disbursed loans aggregating to Rs. 2,789.2 Crores (previous year Rs.2,116.2 Crores) achieving a growth of 32 percent over the previous year.

MRHFL continued its focus on serving customers in rural India. Majority of the loans disbursed were to customers in villages with an average annual household income of less than Rs.1.9 lakhs. During the year under consideration, MRHFL disbursed home loans to around 2,18,000 households (in addition to around 5,60,000 existing households as on 31st March, 2017). MRHFL has been expanding its geographical presence to provide affordable services for rural households.

During the year under review, operations of MRHFL were strengthened in the States of Maharashtra, Gujarat, Rajasthan, Tamil Nadu, Andhra Pradesh, Telangana, Chhattisgarh, Kerala, Karnataka, Madhya Pradesh, Uttar Pradesh, Uttarakhand and Bihar.

Mahindra Asset Management Company Private Limited

Mahindra Asset Management Company Private Limited (MAMCPL), a wholly-owned subsidiary of the Company acts as an Investment Manager for the schemes of Mahindra Mutual Fund. As on 31st March, 2018, MAMCPL was acting as the Investment Manager for six schemes.

The Assets under Management in these six schemes were Rs. 3,352 Crores in March 2018 as compared to Rs. 2,050 Crores in March 2017. Of these assets, Rs. 1,173 Crores were in retail schemes in March 2018 as compared to Rs. 319 Crores in March 2017. MAMCPL has empanelled more than 7,500 distributors and opened 1,26,737 investor accounts in these schemes recording a rise of more than 235%.

During the year under review, the total income of MAMCPL was Rs. 23.4 Crores as compared to Rs. 8.8 Crores for the previous year, registering a growth of 165%. The operations for the year have resulted in a loss of Rs. 38.1 Crores as against a loss of Rs. 20.5 Crores during the previous year.

Mahindra Trustee Company Private Limited

Mahindra Trustee Company Private Limited (MTCPL), your Company’s wholly-owned subsidiary, acts as the Trustee to Mahindra Mutual Fund.

During the year, MTCPL earned trusteeship fees of Rs.23.87 lakhs and other income of Rs.0.73 lakhs as compared to Rs.3.11 lakhs and Rs.0.06 lakhs respectively, for the previous year. The total expenses for the year were Rs.24.25 lakhs as against Rs. 23.52 lakhs in the previous year. MTCPL recorded a profit of Rs.0.35 lakhs for the year under review as against a loss of Rs. 20.4 lakhs in the previous year.

JOINT VENTURE Mahindra Finance USA LLC.

The joint venture company’s disbursement registered a growth of 8.34% to USD 828.38 Million for the year ended 31st March, 2018 as compared to USD 764.61 Million for the previous year.

Income grew by 27.98% to USD 54.61 Million for the year ended 31st March, 2018 as compared to USD 42.67 Million for the previous year. Profit before tax was 27.34% higher at USD 16.44 Million as compared to USD 12.91 Million for the previous year. Profit after tax grew at a healthy rate of 19.02% to USD 9.70 Million as compared to USD 8.15 Million in the previous year.

Names of companies which have become or ceased to be subsidiaries, joint ventures or associate companies during the year

During the year under review, no company has become or ceased to be a subsidiary, joint venture or associate of your Company.

The Company shall provide the copy of the annual accounts of its subsidiary companies and the related information to the Members of the Company on their request. The annual accounts of the subsidiary companies will also be kept open for inspection by any Member at the Registered Office of the Company and also at the Registered Office of the respective subsidiary companies during working hours upto the date of the Annual General Meeting.

The Annual Reports of the subsidiaries will also be available on your Company’s website at the web-link: http://www.mahindrafinance.com/annual-reports.aspx.

Material Subsidiary

Regulation 16[1][c] of the SEBI [Listing Obligations and Disclosure Requirements] Regulations, 2015 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 material subsidiary, during the year under review.

The Policy for determining material subsidiaries as approved by the Board is uploaded on the Company’s website and can be accessed at the Web-link: http://www.mahindrafinance.com/pdf/ determining material subsidiaries.pdf

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company and its four subsidiaries, viz. Mahindra Insurance Brokers Limited, Mahindra Rural Housing Finance Limited, Mahindra Asset Management Company Private Limited and Mahindra Trustee Company Private Limited prepared in accordance with the Companies Act, 2013 and Accounting Standard AS 21 prescribed by The Institute of Chartered Accountants of India, along with all relevant documents and the Auditors’ Report form part of this Annual Report. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies and its joint venture viz. Mahindra Finance USA LLC.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY’S OPERATIONS IN FUTURE

There are no significant and material orders passed by the regulators or courts or tribunals that would impact the going concern status of the Company and its future operations.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Your Company has in place adequate internal financial controls with reference to financial statements, commensurate with the size, scale and complexity of its operations. Your Company uses Oracle based Systems as a business enabler and also to maintain its Books of Account. The transactional controls built into these systems ensure appropriate segregation of duties, appropriate level of approval mechanisms and maintenance of supporting records. The systems, Standard Operating Procedures and controls are reviewed by Management. These systems and controls are audited by Internal Audit and their findings and recommendations are reviewed by the Audit Committee which ensures the implementation. Review of the internal financial controls environment of the Company was undertaken during the year which covered verification of entity level control, process level control and IT controls, identification, assessment and definition of key business processes and analysis of risk control matrices, etc. The risk and control matrices are reviewed on a quarterly basis and control measures are tested and documented.

Reasonable Financial Controls are operative for all the business activities of the Company and no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.

Nonetheless your Company recognises that any internal control framework, no matter how well designed, has inherent limitations and accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.

COMPLIANCE WITH THE PROVISIONS OF SECRETARIAL STANDARD - 1 AND SECRETARIAL STANDARD - 2

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

PARTICULARS OF REMUNERATION AND RELATED DISCLOSURES

Disclosures with respect to the remuneration of Directors, Key Managerial Personnel and Employees as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are as under:

			Disclosure Details
				Ratio of the
Sl. No.	Disclosure Requirement	Name of Director/ KMP	Designation	remuneration of each Director to median remuneration of Employees
1.	Ratio of the remuneration of each Director to the median remuneration	Mr. Dhananjay Mungale	Chairman (Independent Director)	11.06X
	of the employees of the Company for	Mr. M. G. Bhide	Independent Director	9.14X
	the Financial Year 2017-18.	Mr. Piyush Mankad	Independent Director	8.78X
		Mr. C. B. Bhave	Independent Director	8.45X
		Ms. Rama Bijapurkar	Independent Director	7.85X
		Mr. V. S. Parthasarathy	Non-Executive Director	NIL*
		Dr. Anish Shah	Non-Executive Director	NIL*
		Mr. Ramesh Iyer	Vice-Chairman & Managing Director	196.96X
		Mr. V. Ravi	Executive Director & Chief Financial Officer	84.99X
		Ms. Arnavaz M.	Company Secretary &	19.76X
		Pardiwalla	Compliance Officer

* Mr. V. S. Parthasarathy and Dr. Anish Shah do not receive any remuneration from the Company.

Sl. No.			Disclosure Details
	Disclosure Requirement	Name of Director/KMP	Designation	% increase in Remuneration
2.	Percentage increase in Remuneration of each Director, Chief Financial	Mr. Dhananjay Mungale	Chairman (Independent Director)	1.82
	Officer and Company Secretary during	Mr. M. G. Bhide	Independent Director	4.53
	the Financial Year 2017-18.	Mr. Piyush Mankad	Independent Director	6.83
		Mr. C. B. Bhave	Independent Director	2.81
		Ms. Rama Bijapurkar	Independent Director	1.71
		Mr. V. S. Parthasarathy	Non-Executive Director	NIL*
		Dr. Anish Shah	Non-Executive Director	NIL*
		Mr. Ramesh Iyer	Vice-Chairman & Managing Director	-11.53
		Mr. V. Ravi	Executive Director & Chief Financial Officer	-13.94
		Ms. Arnavaz M.	Company Secretary &	-11.16
		Pardiwalla	Compliance Officer
* Mr. V. S. Parthasarathy and Dr. Anish Shah do not receive any remuneration from the Company.
3.	Percentage increase in the median	5.22% considering employees who were in employment for the whole of the
	Remuneration of employees in the	Financial Year 2016-17 and Financial Year 2017-18.
	Financial Year 2017-18.
4.	Number of Permanent employees on the rolls of the Company as on 31st March, 2018.	18,733

5. Average percentile increase already made in the salaries of employees other than the Managerial Personnel in the last Financial Year i.e. 201718 and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration.	For employees other than Managerial Personnel who were in employment for the whole of the Financial Year 2016-17 and Financial Year 2017-18, the average increase is 5.62%. Average decrease for Managerial Personnel is 12.20% Justification: The remuneration of the Vice-Chairman & Managing Director and Executive Director & Chief Financial Officer is decided based on the individual performance, inflation, prevailing industry trends and benchmarks. The remuneration of eligible Non-Executive Directors consists of commission and sitting fees. While deciding the remuneration, various factors such as Director’s participation in Board and Committee Meetings during the year other responsibilities undertaken, such as Membership or Chairmanship/ Chairpersonship of Committees, etc., were taken into consideration. The increment given to each individual employee is based on the employees’ potential, experience as also their performance and contribution to the Company’s progress over a period of time and also benchmarked against a comparator basket of relevant companies in India.
6. Affirmation that the remuneration is	The remuneration paid/payable is as per the Policy on Remuneration of
as per the Remuneration Policy of the	Directors and Remuneration Policy for Key Managerial Personnel and
Company	Employees of the Company.

Notes:

1] The remuneration calculated is as per Section 2[78] of the Companies Act, 2013 and includes the perquisite value of Stock Options of the Company exercised during the year

2] The calculations are based on Employees who were on the rolls of the Company for the whole of the Financial Year 2016-17 and Financial Year 2017-18.

Mr. Ramesh Iyer, Vice-Chairman & Managing Director and Mr. V. Ravi, Executive Director & Chief Financial Officer of the Company do not receive any remuneration or commission from its Holding Company. However, Mr. Iyer has been granted stock options under the Employees’ Stock Option Scheme of the Holding Company, Mahindra & Mahindra Limited. Mr. Iyer has not exercised ESOPs of the Holding Company, during the year, which were granted in the earlier year[s].

During the year under review, Mr. Ramesh Iyer and Mr. V. Ravi have received a commission of Rs. 76,56,314 and Rs. 19,15,000, respectively, from Mahindra Insurance Brokers Limited, a subsidiary of the Company. Further in the year under review, 1,14,273 stock options have been granted to Mr. Ramesh Iyer and 28,568 stock options have been granted to Mr. V. Ravi under the Employees’ Stock Option Scheme of Mahindra Rural Housing Finance Limited, the Company’s subsidiary company.

The Company had 14 employees who were in receipt of remuneration of not less than Rs. 1,02,00,000 during the year ended 31st March, 2018 or not less than Rs.8,50,000 per month during any part of the year.

Details of employee remuneration as required under provisions of Section 197 [12] of the Companies Act, 2013 read with Rule 5 [2] and 5 [3] of Companies [Appointment and Remuneration of Managerial Personnel] Rules, 2014 are available at the Registered Office of the Company during working hours, 21 days before the

Annual General Meeting and shall be made available to any shareholder on request. Such details are also available on your Company’s website and can be accessed at the web-link: http://www.mahindrafinance.com/annual-reports.aspx. None of these employees is a relative of any Director of the Company.

None of the employees holds either by himself/herself or along with his/her spouse or dependent children, more than two per cent of the Equity Shares of the Company.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company is an equal opportunity employer and is committed to ensuring that the work environment at all its locations is conducive to fair, safe and harmonious relations between employees. It strongly believes in upholding the dignity of all its employees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictly prohibited.

The Company has in place an appropriate Policy in accordance with the provisions of the Sexual Harassment of Women at Workplace [Prevention, Prohibition and Redressal] Act, 2013, to prevent sexual harassment of its employees.

Internal Complaints Committee [ICC] has been set up to redress complaints received regarding sexual harassment.

All employees (permanent, contractual, temporary and trainees) are covered under this Policy. The Policy has been widely communicated internally and is placed on the Company’s intranet portal. The Company ensures that no employee is disadvantaged by way of gender discrimination.

The following is a summary of Sexual Harassment complaint(s) received and disposed off during the year 2017-18, pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder:

(a) Number of complaint(s) of Sexual Harassment received during the year - 1

(b) Number of complaint(s) disposed off during the year - 1

(c) Number of cases pending for more than 90 days - 0

(d) Number of workshops/awareness programme against sexual harassment carried out - 1 workshop was conducted at the Company’s Corporate Office. Awareness on sexual harassment was carried out to sensitize employees of the Company at branches pan-India.

(e) Nature of action taken by the employer or District Officer - Warning letter was issued to the alleged employee.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under sub-section (3) (m) of section 134 of the Companies Act, 2013 read with Rule (8)(3)of the Companies (Accounts) Rules, 2014 are given as under :

(A) Conservation of Energy

(i) The steps taken or impact on conservation of energy:

The operations of your Company are not energy intensive. However, adequate measures have been initiated to reduce energy consumption.

Select few steps are listed:

a) Replacement of conventional lighting with Light Emitting Diode (LED) lighting :

The Company has installed LED lighting in Regional Offices of the Company during the year under review and the same has been monitored in terms of electrical consumption and expenses.

b) Replacement of old air-conditioning with updated version of machines with R-410A gas, which helps in reducing Ozone depletion.

c) Reduction in water and energy consumption and recycling of waste generation at various locations.

(ii) The steps taken by the Company for utilising alternate sources of energy: Nil.

(iii) The capital investment on energy conservation equipments: Nil.

(B) Technology Absorption

(i) The efforts made towards technology absorption:

Not Applicable.

(ii) The benefits derived like product improvement, cost reduction, product development or import substitution: Not Applicable.

(iii) I n case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year): Not Applicable.

(a) Details of Technology Imported;

(b) Year of Import;

(c) Whether the Technology has been fully absorbed;

(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof.

(iv) Your Company has not incurred any expenditure on Research and Development during the year under review.

(C) Foreign Exchange Earnings and Outgo

The information on foreign exchange outgo is furnished in the Notes to the Accounts. There were no foreign exchange earnings during the year.

For and on behalf of the Board

Dhananjay Mungale

Chairman

Place: Mumbai

Date : 25th April, 2018

---

Mar 31, 2017

Dear Shareholders

The Directors present their Report together with the audited financial statements of your Company for the year ended 31^st March, 2017.

A. FINANCIAL AND OPERATIONAL HIGHLIGHTS

(Rs. in crores)

	2017	2016
Revenue from Operations	47,096	43,639
Other Income	1,342	850
Profit before Depreciation, Finance Costs, Exceptional items and Taxation	6,112	5,470
Less: Depreciation and Amortisation expense	1,327	1,068
Profit before Finance Costs, Exceptional items and Taxation	4,785	4,402
Less: Finance Costs	146	186
Profit before Exceptional items and Taxation	4,639	4,216
Add: Exceptional items	548	68
Profit before Taxation	5,187	4,284
Less: Tax Expense	1,231	1,079
Profit for the year	3,956	3,205
Balance of profit for earlier years	17,904	15,442
Less: Transfers from retained earnings	14	3
Add: Transfers to retained earnings	—	100
Profits available for appropriation	21,846	18,744
Add: Other Comprehensive Income / (Loss)*	(4)	7
Less: Dividend paid on Equity Shares	745	745
Less: Income-tax on Dividend paid	96	102
Balance carried forward	21,001	17,904

* Remeasurement of (loss)/gain (net) on defined benefit plans, recognised as part of retained earnings.

The fiscal year gone by was marked by significant developments on both the global as well as domestic fronts. On the international front, Brexit and the US elections heralded a sea change, forebodingly laden with darker possibilities for the global and even the Indian economy. The political outlook for globalisation too changed in the wake of the above developments.

On the domestic side, a constitutional amendment paved the way for the long-awaited and transformational Goods and Services Tax (GST) while demonetisation of large denomination currency notes signalled a regime shift to punitively raise the costs of unaccounted transactions.

The currency swap move entailed short-term costs in the form of economic dislocations across Sectors, inconvenience and hardships, especially for those in the informal and cashintensive sectors of the economy who lost out on income and employment. These costs have been real and significant but they may be minimised in recorded GDP because the national income accounts estimate informal activity on the basis of formal sector indicators. However, the costs are likely to be transitory as demonetisation has the potential to generate meaningful long-term benefits. Gross value added (GVA) growth estimate for 2016-17 has been pared down to 6.6% year on year as compared to the estimate of 7.6% when the year began.

However, even amidst this scenario, your Company recorded an increase of 7.92% in revenue from operations at Rs. 47,096 crores in the year under review as against Rs. 43,639 crores in the previous year.

The Profit for the year before Depreciation, Finance Costs, Exceptional items and Taxation recorded an increase of 11.74% at Rs. 6,112 crores as against Rs. 5,470 crores in the previous year. Profit after tax increased by 23.43% at Rs. 3,956 crores as against Rs. 3,205 crores in the previous year.

Your Company continues with its rigorous cost restructuring exercises and efficiency improvements which have resulted in significant savings through continued focus on cost controls and process efficiencies thereby enabling the Company to maintain profitable growth in the current economic scenario.

No material changes and commitments have occurred after the closure of the Financial Year 2016-17 till the date of this Report, which would affect the financial position of your Company.

Performance Review Automotive Sector

Your Company’s Automotive Sector recorded total sales of 5,06,624 vehicles (4,52,893 four-wheelers and 53,731 three-wheelers) as against a total of 4,94,096 vehicles (4,37,911 four-wheelers and 56,185 three-wheelers) in the previous year, registering a growth of 2.5% in vehicle sales.

On the domestic sales front, your Company sold a total of 4,69,384 vehicles as compared to 4,58,065 vehicles in the previous year resulting in a growth of 2.5%.

In the Passenger Vehicle segment, your Company’s volumes remained almost flat at 2,36,130 vehicles [including 2,22,541 Utility Vehicles (UVs), 10,370 Vans and 3,219 Cars] as compared to the previous year’s volume of 2,36,307 vehicles [including 2,22,324 UVs, 10,588 Vans and 3,395 Cars].

In the Commercial Vehicle (CV) segment, your Company sold 1,80,948 vehicles [including 30,043 vehicles < 2T GVW, 1,36,564 vehicles between 2-3.5T GVW, 7,626 Light Commercial Vehicles (LCVs) in the LCV > 3.5T segment and 6,715 Heavy Commercial Vehicles (HCVs)] registering a growth of 8.5% over the previous year’s volume of 1,66,783 CV [including 27,834 vehicles < 2T GVW, 1,26,819 vehicles between 2-3.5T GVW, 6,425 LCVs in the LCV > 3.5T segment and 5,705 HCVs].

In the three-wheeler segment, your Company sold 52,306 three-wheelers, registering a de-growth of 4.9% over the previous year’s volume of 54,975 three-wheelers.

For the year under review, the Indian automotive industry (except 2-Wheeler) grew 6.5%, with the Passenger Vehicle (PV) industry growth of 9.2% and record sales crossing the three million mark. The CV industry grew 4.2% with the LCV 2-3.5T (PU segment) posting the highest ever sales of 0.2 million and taking 29% share of the total CV industry. However, the Medium and Heavy Commercial Vehicles (MHCV) segment remained flat at a volume of 0.3 million. The 2-Wheeler (2W) industry grew 6.9%, with sales crossing a record 17 million mark.

Your Company’s UV sales volume remained flat at 2,22,541 vehicles, resulting in an UV market share of 29.2% as against 37.9% in the previous year. Your Company’s UV sales were adversely impacted in the first, third quarter and the early fourth quarter of the Financial Year 2017.

In the first quarter of the Financial Year 2017, rural demand continued to be subdued - a low sentiment continuing from the Financial Years 2015 and 2016 due to two years of deficit monsoon. In the third quarter of the Financial Year 2017, volumes were adversely impacted due to demonetisation. Though the industry at large was quick to recover in January, 2017 recovery was slightly slower in rural India as compared to urban India, having an adverse impact on your Company’s volumes. Demand for your Company’s products from urban markets was also under pressure due to continued shift in customer preference.

Scorpio continues to enhance its iconic status and the demand for Scorpio remained strong at 49,319 vehicles, a growth of 2.6% over the previous year.

Bolero has been a very successful brand for your Company over the last 10 years, and in September, 2016, your Company launched the new Bolero Power with the mHawk^D70 engine. The all New Bolero Power is an evolution of the Bolero brand, with an enhanced value proposition, delivering more power, mileage and a peppier drive.

In the LCV<2T segment, riding on the success of Jeeto, your Company’s volumes grew 7.9% and the market share strengthened to 25.7% as against 23.9% in the previous year. To further strengthen its presence in this segment, your Company launched the Supro Minitruck and Supro cargo van in February, 2017.

In the PIK-UP segment of commercial vehicles (LCV 2 to 3.5T), your Company maintained its leadership position with a market share of 65.8%. In April, 2016, your Company launched the Big Bolero PIK-UP with several best-in-class features.

In February, 2016, your Company launched the Blazo series of heavy commercial (HCV) trucks with Fuelsmart technology. The Blazo series of trucks are backed by a superior mileage guarantee and a 48 hours service guarantee. For the year under review, your Company extended the Blazo range of trucks from 25 to 49 Tons, and the trucks are well received by the customer. The total HCV sales for the year stood at 6,715 trucks, clocking a 17.7% growth. The market share of the HCV segment stood at 4.0% as compared to 3.4% in the previous year.

During the year under review, your Company posted the highest ever export volumes of 37,240 vehicles as against the previous year exports of 36,031 vehicles, a growth of 3.4%.

Your Company continued to grow in volumes and strengthen its presence in the neighbouring markets of Sri Lanka, Nepal and Bangladesh. With continued efforts of building its brand in key markets like South Africa and Chile, your Company reported a volume growth of 28.9% and 28.3% respectively. For the year under review, the KUV100 and TUV300 were launched in South Africa.

The spare parts sales for the year stood at Rs. 1,937.2 crores (including Exports of Rs. 115.6 crores) as compared to Rs. 1,765.3 crores (including Exports of Rs. 110.3 crores) in the previous year, registering a growth of 9.7%.

Farm Equipment Sector

Your Company recorded a total sales of 2,63,021 tractors as against 2,14,173 tractors sold in the previous year thus recording a growth of 22.8%.

For the year under review, the tractor industry in India recorded sales of 5,82,084 tractors recording a growth of 18%. A normal monsoon, good increase in minimum support prices and Government’s focus on Agriculture and rural development, helped drive the positive sentiment in the Agriculture Sector and the rural economy at large. This positive sentiment and the pent-up demand due to two consecutive years of industry de-growth in the Financial Years 2015 and 2016, helped boost the demand for tractors in the Financial Year 2017.

Your Company sold 2,48,594 tractors in the domestic market in the year 2016-17, as compared to 2,02,628 tractors in the previous year, recording a growth of 22.7%. Your Company gained market share by 1.8%, taking the total market share to 42.7% which is the highest ever market share.

Your Company’s market performance was supported by the good performance of YUVO, which has helped gain market share in the 30-50 HP segment. YUVO, an all-new tractor platform launched in April, 2016 has been highly successful in strengthening the technology leadership of Mahindra tractors.

After the successful launches of Arjun NOVO and YUVO in the previous two years, your Company launched its third new tractor platform JIVO in April, 2017. JIVO is a new age small tractor platform in the sub 25 HP category. With its narrow and compact design, high power and multi-application suitability, JIVO is an ideal choice for the growing segment of Horticulture and Row crop farming.

During the year under review, your Company exported 14,583 (including 156 Completely Knocked Down Units) tractors registering a growth of 26.3% over the previous year. This is the highest ever tractor exports by your Company.

Spare parts sales for the year stood at Rs. 530.7 crores (including exports of Rs. 43.8 crores) as compared to Rs. 476.5 crores (including exports of Rs. 34.8 crores) in the previous year, registering a growth of 11.4%.

Other Businesses

In the power generation space, under the Mahindra Powerol Brand, your Company continues to be amongst the leaders in the industry for over a decade. Your Company earned its highest ever revenues of Rs. 1,204.9 crores in the current Financial Year as against Rs. 1,109.9 crores in the previous year, recording a growth of 8.6%.

With a focus on changing customer needs, your Company has further expanded the business in Tele infra management and in the energy management solutions space.

Amidst growing concerns on environmental sustainability, your Company took a step towards moving to greener solutions, by venturing into a new business of ‘Green Gensets’ through battery based solutions.

Current Year’s review

During the period 1^st April, 2017 to 29^th May, 2017, 63,251 vehicles were produced as against 60,164 vehicles and 60,052 vehicles were despatched as against 57,697 vehicles during the corresponding period in the last year. During the same period 49,425 tractors were produced and 49,154 tractors despatched as against 44,730 tractors produced and 44,778 tractors despatched during the corresponding period in the previous year.

The outlook for 2017-18 remains positive with a favourable domestic and global backdrop. On the domestic front, the economy is set to experience a growth recovery and the RBI expects Gross Value Added to grow at 7.3% Year on Year in Financial Year 2018 with some favourable tailwinds.

Monsoon is forecast to be normal for the second consecutive year which bodes well for demand recovery. Moreover, the ongoing remonetisation process and lagged effect of past rate cuts along with a further reduction in banks’ lending rates will aid discretionary consumer spending and growth recovery.

Focused expenditure especially on the rural economy and affordable housing, implementation of Goods and Services Tax (GST) and steps to attract higher foreign direct investment (FDI) will also be supportive of growth. Importantly, notwithstanding initial challenges, GST implementation entails sustained positive gains for the economy in the long term.

On the global front too, demand backdrop is expected to be favourable with most forecasts pegging global output and trade higher in 2017 and 2018 as compared to the recent past.

Finance

Financial Year 2016-17 was a turbulent year for the world economy with events namely Brexit, US Presidential elections and Italian political reform referendum, which not only caused volatility during the year but also has the potential to have ramifications in the years to come. US economy continued showing signs of steady recovery and encouraging job growth which led the US Federal Reserve to hike interest rates two times in Financial Year 2016-17 by a cumulative 50 bps. Despite the political noise, the economic recovery in Eurozone was encouraging with growth picking up in the second half of 2016, which led the ECB to start tapering its quantitative easing program since December, 2016. Economic sentiment in Eurozone reached a nearly six-year high in February, 2017. Growth also remained solid in the United Kingdom, where spending proved resilient in the aftermath of Brexit.

Growth prospects for emerging market economies have also improved with reduced concerns on China’s hard landing due to policy stimulus. Further, recessionary conditions also ebbed in Russia and Brazil due to firming up of commodity prices. Crude prices which touched a 13 year low in January, 2016, rebounded during Financial Year 2016-17 as oil producing nations agreed on output cuts. However, global trade remains subdued due to an increasing tendency towards protectionist policies and heightened political tensions. The latest World Economic Outlook by IMF predicts the Global economic activity to pick up with a long-awaited cyclical recovery in investment, manufacturing and trade projects.

On the domestic front in India also, the year was marked with two game changing events viz., Demonetization and passing of Goods and Services Tax (GST). Demonetisation, albeit its short term adverse impact on economy, has positively impacted the digital payments landscape in the country. GST holds the potential of providing impetus to growth and investments in the long term and is expected to benefit the GDP by more than 1%.

With positive macro-economic indicators, commitment to fiscal and monetary reforms and political stability, India continued to be a bright spot for global investors. Foreign Direct Investment (FDI) in Financial Year 2016-17 touched a record high of USD 60.1 billion. For the first time since the opening up of the economy in 1991, India’s current account deficit is being funded by FDI, a sign of rising confidence among long term investors. The Indian Rupee displayed two-way movements up to mid-January, 2017, but since then has appreciated on resumption of portfolio inflows in both the debt and equity segments.

CPI inflation remained firmly anchored within RBI’s target range which prompted them to reduce repo rates by a cumulative of 50 bps in Financial Year 2016-17. However, the persistence of core inflation, implementation of 7^th pay commission and rise in global commodity prices led the RBI to undertake a calibrated shift in their policy stance from accommodative to neutral towards end of the Financial Year. Following the announcement of demonetisation in November, 2016, there was a huge surge in banking sector liquidity, impelling the Banks to reduce their lending rates and finally transmitting the policy rate cuts by the RBI over the last two years to the consumers.

Your Company continued to focus on managing cash efficiently and ensured that it had adequate liquidity and back up lines of credit. During the year, your Company repaid Rs. 1,083.62 crores of long term borrowings from internal accruals.

During the year, your Company raised Rs. 475 crores by way of private placement of 7.57% Listed, Senior, Unsecured, Redeemable Non-Convertible Debentures with a 10 years’ maturity. In addition, Euro 50 million was raised by way of External Commercial Borrowings for 5 years. The above borrowings were raised to part finance its ongoing modernisation and expansion programmes. In addition, your Company also availed export finance of Rs. 605 crores, out of which Rs. 305 crores was under the interest equalization scheme of Government of India.

The Company’s Bankers continue to rate your Company as a prime customer and extend facilities/services at prime rates. Your Company follows a prudent financial policy and aims not to exceed an optimum financial gearing at any time. The Company’s total Debt to Equity Ratio was 0.11 as at 31^st March, 2017.

Your Company has been rated by CRISIL Limited (“CRISIL”), ICRA Limited (“ICRA”), India Ratings and Research Private Limited (“India Ratings”) and Credit Analysis & Research Limited (“CARE”) for its Banking facilities under Basel II norms. All have re-affirmed the highest credit rating for your Company’s Short Term facilities. For Long Term facilities and Non-Convertible Debenture (“NCD”) programme, CRISIL and ICRA have re-affirmed their credit ratings of CRISIL AAA/ Stable and [ICRA]AAA (stable) respectively. Further, CARE has also re-affirmed the ratings of the Company’s long-term Bank facilities at CARE AAA. India Ratings and Research (Ind-Ra, a Fitch Group Company) has also re-affirmed Long-Term Issuer Rating of ‘IND AAA’ with a Stable outlook to your Company. With the above rating affirmations, your Company continues to enjoy the highest level of rating from all major rating agencies at the same time.

The AAA ratings indicate highest degree of safety regarding timely servicing of financial obligations and is also a vote of confidence reposed in your Company’s Management by the rating agencies. It is an acknowledgement of the strong credit profile of your Company over the years, resilience in earnings despite cyclical upturns/downturns, robust financial flexibility arising from the significant market value of its holdings and prudent management.

Investor Relations (IR)

Your Company continuously strives for excellence in its IR engagement with International and Domestic investors and has set up feedback mechanism to measure IR effectiveness. Structured conference calls and periodic investor/analyst interactions including one-on-one meetings, Telepresence meetings, participation in investor conferences, quarterly earnings calls and annual analyst meet with the Chairman, Managing Director and Business Heads were organised during the year.

Your Company interacted with around 750 Indian and overseas investors and analysts (excluding quarterly earnings calls and specific event related calls) during the year.

Your Company always believes in leading from the front with emerging best practices in IR and building a relationship of mutual understanding with investor/analysts. As a key milestone in this continuing endeavour, your Company created a digital interactive annual review of the Company’s performance on the Corporate website to provide an interactive experience beyond what is available in the Annual Report. Your Company also continues to organise con-call on Environment, Social and Corporate Governance (ESG) for analysts and investors.

Your Company is pleased to report that the Company’s IR function was awarded ‘Overall Best Company in India for Corporate Governance’ and ‘Best for Shareholders’ Rights and Equitable Treatment in India’ by ‘Asia Money’ based in Hong Kong.

Your Company ensures that critical information about the Company is available to all the investors by uploading all such information at the Company’s website. Your Company has created a ‘Group Investor Relations Council’ to share best practices across all the listed group companies and learn from each other.

Dividend

Your Directors are pleased to recommend a dividend of Rs. 13 per Ordinary (Equity) Share of the face value of Rs. 5 each, payable to those Shareholders whose names appear in the Register of Members as on the Book Closure Date. The equity dividend outgo for the Financial Year 2016-17, inclusive of tax on distributed profits (after reducing the tax on distributed profits of Rs. 44.17 crores on the dividends receivable from the subsidiaries during the current Financial Year) would absorb a sum of Rs. 927.62 crores [as against Rs. 841.68 crores comprising the dividend of Rs. 12 per Ordinary (Equity) Share of the face value of Rs. 5 each and tax thereon paid for the previous year]. Further, the Board of your Company decided not to transfer any amount to the General Reserve for the year under review.

Dividend Distribution Policy

The Board of Directors at its Meeting held on 10^th August, 2016 approved the Dividend Distribution Policy containing the requirements mentioned in Regulation 43A of the Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Policy is attached as Annexure I and forms part of this Annual Report.

B. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company and its subsidiaries, prepared in accordance with the Companies Act, 2013 and applicable Accounting Standards along with all relevant documents and the Auditors’ Report form part of this Annual Report. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies, associates and joint ventures.

The Financial Statements as stated above are also available on the website of the Company and can be accessed at the Web-link: http://www.mahindra.com/resources/investor-reports/FY17/Annual Reports/Links-AnnualReport.zip

Subsidiary, Joint Venture and Associate Companies

The Mahindra Group Companies continue to contribute to the overall growth in revenues and overall performance of your Company.

Tech Mahindra Limited (TML), the Company’s Flagship Company in the IT Sector, has reported a consolidated revenue of Rs. 29,141 crores in the current year as compared to Rs. 26,494 crores in the previous year, an increase of 10%. Its consolidated profit after tax is Rs. 2,813 crores as compared to Rs. 2,993 crores in the previous year, a decrease of 6%.

*The Group’s finance company, Mahindra & Mahindra Financial Services Limited (Mahindra Finance), reported a consolidated operating income of Rs. 7,146 crores during the current year as compared to Rs. 6,554 crores in the previous year, a growth of 9%. The consolidated profit after tax for the year is Rs. 512 crores as compared to Rs. 772 crores in the previous year.

* Mahindra Finance financials is as per Indian Generally Accepted Accounting Principles (IGAAP).

Mahindra Lifespace Developers Limited (MLDL), the subsidiary in the business of real estate and infrastructure registered a consolidated operating income of Rs. 762 crores as compared to Rs. 593 crores in the previous year. The consolidated profit after tax for the year is Rs. 102 crores as compared to Rs. 92 crores in the previous year.

Mahindra Holidays & Resorts India Limited, the subsidiary in the business of timeshare registered a consolidated operating income of Rs. 2,282 crores as compared to Rs. 1,602 crores in the previous year, an increase of 42%. The consolidated profit after tax for the year is Rs. 149 crores as compared to Rs. 87 crores in the previous year, an increase of 71%.

Ssyangyong Motor Company (SYMC), the Korean subsidiary of the Company has reported consolidated revenues of Rs. 21,153 crores in the current fiscal year as compared to Rs. 20,079 crores in the previous year, a growth of 5%. The consolidated profit after tax for the year is Rs. 245 crores as compared to consolidated loss of Rs. (166) crores in the previous year.

The consolidated group profit before exceptional item and tax for the year is Rs. 5,004 crores as against Rs. 4,794 crores in the previous year - a growth of 4%. The consolidated profit after tax after non-controlling interest and exceptional items for the year is Rs. 3,698 crores as against Rs. 3,148 crores in the previous year.

During the year under review, Mahindra West Africa Ltd, Trringo.com Limited, Merakisan Private Limited, Mahindra Airways Limited, Mahindra Mexico S. de. R. L., Bristlecone Middle East DMCC, Mahindra do Brasil Industrial Ltda., Classic Legends Private Limited, BSA Company Limited, Mahindra MSTC Recycling Private Limited, Mahindra Suryaurja Private Limited, OFD Holding BV, Origin Direct Asia Ltd, Origin Fruit Direct B.V., Origin Fruit Services South America SpA, Origin Direct Asia (Shanghai) Trading Co. Ltd., Mahindra Homes Private Limited, Hisarlar Makina Sanayi ve Ticaret Anonim §irketi and Hisarlar ithalat ihracat Pazarlama Anonim §irketi became subsidiaries of your Company.

During the year under review, Caribia Service Oy, Are Semesterby A AB, Are Semesterby B AB, Are Semesterby C AB, Are Semesterby D AB, Kiinteisto Oy Tunturinrivi, Saimaa Gardens Arena Oy, Merakisan Private Limited and Mahindra Internet Commerce Private Limited ceased to be subsidiaries of your Company.

Subsequent to the year end, Mahindra Automotive North America Inc. and Merakisan Private Limited became subsidiaries of your Company.

During the year under review, Mahindra Univeg Private Limited changed its name to Mahindra Greenyard Private Limited and Mahindra Reva Electric Vehicles Limited changed its name to Mahindra Electric Mobility Limited.

During the year under review, Sampo Rosenlew Oy and PF Holdings B.V. became Associates of your Company and Mahindra Sona Limited ceased to be a Joint Venture of your Company.

A Report on the performance and financial position of each of the subsidiaries, associates and joint venture companies included in the Consolidated Financial Statement and their contribution to the overall performance of the Company, is provided in Form AOC-1 and forms part of this Annual Report.

The Policy for determining material subsidiaries as approved by the Board is uploaded on the Company’s website and can be accessed at the Web-link: http://www.mahindra.com/resources/ investor-reports/FY17/Annual Reports/Links-AnnualReport.zip

C. JOINT VENTURES, ACQUISITIONS AND OTHER MATTERS

Demerger of Two-Wheeler Business of Mahindra Two Wheelers Limited (MTWL) into your Company Mahindra Two Wheelers Limited (“MTWL”), a step down subsidiary of your Company, is engaged in the businesses of manufacturing and selling of two wheelers (“Two Wheelers Business”) and trading in spare parts and accessories (“Spares Business”).

MTWL’s past business strategy was focused on addressing the mass two wheeler market. Given the market response, MTWL has decided to make a strategy shift by focusing on the niche premium two wheeler segment. As your Company is present in many segments of the automotive industry, it is envisaged to demerge the Two Wheeler Business into your Company. The proposed demerger would enable the Two Wheeler Business to also benefit from your Company’s R&D and sourcing capabilities. Besides, the proposed demerger of the Two Wheeler Business would enable MTWL to streamline its operations by focusing on the Spares Business.

To achieve the above, a Scheme of Arrangement between Mahindra Two Wheelers Limited and the Company and their respective Shareholders and Creditors (“Scheme”) was announced by your Company whereby MTWL would demerge the Two Wheeler Business into your Company. The appointed date of the Scheme is 1^st October, 2016. In accordance with the Scheme, your Company shall be allotting 4,63,287 Ordinary (Equity) Shares of Rs. 5 each to Aay Kay Global and 40,601 Ordinary (Equity) Shares of Rs. 5 each to Emerging India Fund, the shareholders of MTWL, in the share exchange ratio of 1 fully paid-up Ordinary (Equity) Share of Rs. 5 each of the Company for every 461 fully paid-up shares held in MTWL.

The Company had received the Observation Letters dated 8^th March, 2017 from BSE Limited (‘BSE’) and dated 10^th March, 2017 from the National Stock Exchange of India Limited (‘NSE’), conveying no objection to the Scheme. Subsequent to the year end, pursuant to the directions of the National Company Law Tribunal, Mumbai Bench by its Order dated 5^th April, 2017 a Meeting of the Equity Shareholders of the Company has been convened on 13^th June, 2017, for seeking approval to the Scheme.

Acquisition of assets of Bramont Montadora Industrial e Comercial de Veiculos S.A.

As a part of its strategy to expand its operations in the Brazilian market, your Company had appointed Bramont Montadora Industrial e Comercial de Veiculos S.A. (“Bramont”) as a distributor in Brazil since 2012. In October, 2016, your Company along with Mahindra Overseas Investment Company (Mauritius) Limited (“MOICML”) acquired 100% of the equity (‘Quota’) capital of Mahindra do Brasil Industrial Ltda. Your Company invested approximately USD 7.5 million in the equity capital of Mahindra do Brasil Industrial Ltda., for acquisition of Bramont’s assets. Given the importance of the Brazilian market, the acquisition of Bramont’s assets would help your Company in having a direct presence through its own assembly facility and distribution network in the Brazilian market.

Acquisition of BSA brands for Two Wheeler

With a view to realign the Two Wheeler Business of your Company to focus on premium niche segments and to create an international motorcycle company and revive vintage motorcycle brands, your Company, through its subsidiary Classic Legends Private Limited (CLPL) has acquired 100% of the share capital of UK based BSA Company Limited (BSA) on 20^th October, 2016 for a consideration of GBP 3.4 million.

BSA was incorporated in the UK in December, 1980 and has a presence in Japan, Singapore, Malaysia, USA, Mexico and Canada. The principal activity of BSA is licensing of its brands.

The BSA brand, which has a global appeal, will be primarily suited to international markets.

Acquisition of 75.1% stake in Hisarlar Makina Sanayi ve Ticaret Anonim §irketi, Turkey

In line with the vision of your Company’s Farm Equipment Sector to pursue a globalisation strategy and expand your Company’s product portfolio to include various new categories of farm machinery, your Company has entered into definitive agreements on 19^th January, 2017, for acquiring 75.1% stake in Hisarlar Makina Sanayi ve Ticaret Anonim §irketi (“Hisarlar”) for a consideration of Turkish Lira 71 million (equivalent to approximately Euro 18 million) through a capital increase. This transaction was completed on 30^th March, 2017. Hisarlar is a key player in tractor cabins, machinery components and agricultural machinery industry. It had revenues of Turkish Lira 215 million (approximately Euro 55 million) in 2016, with exports constituting approximately 40% of sales. Hisarlar has two production facilities in Western Turkey and employs approximately 820 people. Hisarlar is the market leader in Turkey in the soil preparation category of farm implements, supported by a distribution network of nearly 85 dealers across Turkey. This acquisition is an important milestone in your Company’s globalisation journey.

Sale of 66,58,565 Equity Shares of Mahindra Holidays & Resorts India Limited in the Open Market through Stock Exchange

During this year, your Company, in order to increase the free float and to unlock part value out of its investments in Mahindra Holidays & Resorts India Limited (“MHRIL”), a listed subsidiary of your Company, sold around 7.5% of its holding in MHRIL, on the Stock Exchange, at an average gross price of Rs. 412.05 per share, resulting in a gain of Rs. 269 crores to your Company. Following this sale, the shareholding of your Company has come down from 75% to 67.5% of MHRIL’s share capital.

Sale of 32,75,000 shares of Mahindra Sona Limited

As a part of the strategy of your Company to divest from non-core investments, your Company sold its entire holding of 32,75,000 Equity Shares (29.77%) in Mahindra Sona Limited (“Mahindra Sona”) in favor of the other Promoter of Mahindra Sona, namely, M Sona Automotive Private Limited, for an overall consideration of Rs. 89.32 crores, resulting in a profit of Rs. 85.86 crores on sale of this investment in Financial Year 2017.

D. INTERNAL FINANCIAL CONTROLS

The Corporate Governance Policies guide the conduct of affairs of your 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.

Your Company’s Financial Statements are prepared on the basis of the Significant Accounting Policies that are carefully selected by Management and approved by the Audit Committee and the Board. These Accounting policies are reviewed and updated from time to time.

Your Company uses SAP ERP Systems as a business enabler and also to maintain its Books of Account. The transactional controls built into the SAP ERP systems ensure appropriate segregation of duties, appropriate level of approval mechanisms and maintenance of supporting records. The Information Management Policy reinforces the control environment. The systems, Standard Operating Procedures and controls are reviewed by Management. These systems and controls are audited by Internal Audit and their findings and recommendations are reviewed by the Audit Committee which ensures the implementation.

Your Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by The Institute of Chartered Accountants of India. Based on the results of such assessments carried out by Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed. Nonetheless your Company recognises that any internal control framework, no matter how well designed, has inherent limitations and accordingly, regular audits and review processes ensure that such systems are reinforced on an ongoing basis.

Indian Accounting Standards (Ind AS) - IFRS Converged Standard

Your Company has adopted Indian Accounting Standards (“Ind AS”) for the accounting period beginning on 1^st April, 2016 pursuant to Ministry of Corporate Affairs Notification dated 16^th February, 2015 notifying the Companies (Indian Accounting Standard) Rules, 2015.

E. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of your Company’s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

F. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All Related Party Transactions entered during the year were in the Ordinary Course of Business and on arms length basis. During the year under review, your Company had entered into Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, with Mahindra Vehicle Manufacturers Limited, a wholly owned subsidiary of your Company. These transactions too were in the Ordinary Course of Business of your Company and were at Arm’s Length Basis, details of which, as required to be provided under section 134(3)(h) of the Companies Act, 2013 are disclosed in Form AOC-2 as Annexure II and forms part of this Annual Report.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website and can be accessed at the Web-link: http://www.mahindra.com/resources/ investor-reports/FY17/Annual Reports/Links-AnnualReport.zip

G. AUDITORS

Statutory Auditors and Auditors’ Report

Messrs Deloitte Haskins & Sells, Chartered Accountants (ICAI Registration No. 117364W) the retiring Auditors have completed the maximum tenure as Statutory Auditors of the Company as provided under the Companies Act, 2013 and relevant Rules thereunder.

The Board of Directors on the recommendation of the Audit Committee has approved and recommended to the Members, the appointment of Messrs B S R & Co. LLP, Chartered Accountants (Firm Registration Number 101248W/W-100022) who have given a written consent to act as Statutory Auditors of your Company and have also confirmed that the said appointment would be in conformity with the provisions of sections 139 and 141 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014.

The Members are requested to appoint Messrs B S R & Co. LLP as Statutory Auditors of the Company in place of the retiring Auditors Messrs Deloitte Haskins & Sells, Chartered Accountants at the ensuing Annual General Meeting for a period of 5 years from the conclusion of the ensuing Annual General Meeting till the conclusion of the 76^th Annual General Meeting and fix their remuneration.

The Auditors’ Report is unmodified i.e. it does not contain any qualification, reservation or adverse remark.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Sachin Bhagwat, Practicing Company Secretary (Certificate of Practice Number: 6029) to undertake the Secretarial Audit of the Company.

The Company has annexed to this Board Report as Annexure III, a Secretarial Audit Report given by the Secretarial Auditor.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Cost Auditors

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 2016-17.

The Board of Directors on the recommendation of the Audit Committee, appointed Messrs D. C. Dave & Co., Cost Accountants (Firm Registration Number 000611), as the Cost Auditors of the Company for the Financial Year 2017-18 under section 148 of the Companies Act, 2013. Messrs D. C. Dave & Co. have confirmed that their appointment is within the limits of section 141 (3)(g) of the Companies Act, 2013 and have also certified that they are free from any disqualifications specified under section 141(3) and proviso to section 148(3) read with section 141(4) of the Companies Act, 2013.

The Audit Committee has also received a Certificate from the Cost Auditors certifying their independence and arms length relationship with the Company.

As per the provisions of the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a Resolution seeking Members’ ratification for the remuneration payable to Messrs D. C. Dave & Co., Cost Auditors is included in the Notice convening the Annual General Meeting.

Reporting of Frauds by Auditors

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.

H. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES

Particulars of the loans given, investment made or guarantee given or security provided and the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient of the loan or guarantee or security are provided in Note Nos. 56, 4, and 9 to the Financial Statements.

I. PUBLIC DEPOSITS AND LOANS/ADVANCES

Your Company had discontinued its Fixed Deposit Scheme for 36 months with effect from the close of office hours on 31^st January, 2014 and has also discontinued acceptance of Fixed Deposits with effect from 1^st April, 2014.

All the deposits from public and Shareholders had already matured as at 31^st March, 2017. The total of such 126 deposits amounting to Rs. 83.60 lakhs had not been claimed as at the end of the Financial Year. Since then 32 of these deposits of the value of Rs. 15.85 lakhs has 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.

The particulars of loans/advances, etc., required to be disclosed in the Annual Accounts of the Company pursuant to Para A of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are furnished separately.

J. EMPLOYEES

Key Managerial Personnel (KMP)

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

(a) 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

During the year, the Board of Directors of the Company, at its Meeting held on 11^th November, 2016 had pursuant to the recommendations of the Governance, Nomination and Remuneration Committee and subject to the approval of Members at the ensuing Annual General Meeting of the Company:

(a) Designated and appointed Mr. Anand G Mahindra as Executive Chairman of the Company for a period of five years with effect from 12^th November, 2016 upto and including 11^th November, 2021; and

(b) Appointed Dr. Pawan Goenka as Managing Director of the Company for a period of four years from 12^th November, 2016 upto and including 11^th November, 2020.

There has been no other change in the KMPs during the year under review.

Employees’ Stock Option Scheme

During the year under review, on the recommendation of the Governance, Nomination and Remuneration Committee of your Company, the Trustees of Mahindra & Mahindra Employees’ Stock Option Trust have granted Stock Options to employees under the Mahindra & Mahindra Limited Employees Stock Option Scheme 2010. No Stock Options have been granted to employees under the Mahindra & Mahindra Limited Employees Stock Option Scheme 2000.

The Company has in force the following Schemes which get covered under the provisions of SEBI (Share Based Employee Benefits) Regulations, 2014 (“SBEB Regulations”):

1. Mahindra & Mahindra Limited Employees Stock Option Scheme - 2000 (2000 Scheme)

2. Mahindra & Mahindra Limited Employees Stock Option Scheme - 2010 (2010 Scheme)

3. M&M Employees Welfare Fund No. 1

4. M&M Employees Welfare Fund No. 2

5. M&M Employees Welfare Fund No. 3

There are no material changes made to the above Schemes and these Schemes are in compliance with the SBEB Regulations. Your Company’s Auditors, Messrs Deloitte Haskins & Sells, have certified that the Company’s above-mentioned Schemes have been implemented in accordance with the SBEB Regulations, and the Resolutions passed by the Members for the 2000 Scheme and the 2010 Scheme.

Information as required under the SBEB Regulations read with SEBI Circular CIR/CFD/POLICY CELL/2/2015 dated 16^th June, 2015 have been uploaded on the Company’s website and can be accessed at the Web-link: http://www.mahindra.com/resources/ investor-reports/FY17/Annual Reports/Links-AnnualReport.zip

Particulars of Employees and related disclosures

The Company had 251 employees who were in receipt of remuneration of not less than Rs. 1,02,00,000 during the year ended 31^st March, 2017 or not less than Rs. 8,50,000 per month during any part of the year.

Details of employee remuneration as required under provisions of section 197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are available at the Registered Office of the Company during working hours, 21 days before the Annual General Meeting and shall be made available to any Shareholder on request. Such details are also available on your Company’s website and can be accessed at the Web-link: http://www. mahindra.com/resources/investor-reports/FY17/Annual Reports/Links-AnnualReport.zip

Disclosures with respect to the remuneration of Directors, KMPs and employees as required under section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure IV to this Report.

Industrial Relations

The year under review witnessed a very positive Industrial Relations scenario across all manufacturing locations for the Automotive and Farm Equipment Sectors.

Your Company’s focus continues towards propagating proactive and employee centric practices. The Transformational Work Culture initiative, which aims to create an engaged workforce and an innovative, productive and competitive shop-floor ecosystem, continues to grow in strength. The Transformational Work Culture Committee (TWCC) continually engages with long-term strategic initiatives which range from anticipated Labour Law reforms to ‘Swachh Bharat Abhiyaan’.

Some examples of the programs put in place include Rise for Associates, Industrial Relations Skills for Frontline Officers, Cultural Diagnostics Projects, Transformational work culture Projects, e-Compliance, e-Quiz for associates, e-portal on reward and recognition for associates, e-safety module, Code of Conduct for Associates, and cutting edge ER Practices in collaboration with Mahindra Leadership University (MLU).

In order to develop skills and foster togetherness at the workplace, your Company rolled out multiple training and engagement programs covering a wide range of topics, viz. positive attitude, stress management, creativity, team effectiveness, safety and environment, quality tools, TPM, skill building programs, customer focus, awareness on Promise 2019, Code of Conduct and a Union Leadership Development Program.

The Mahindra Skill Excellence initiative is a holistic approach to enhance the skill and capabilities of shop floor associates, and has received good participation across manufacturing facilities. As a result of this effort, an associate from your Company will represent India at the Worlds Skill Competition -Abu Dhabi in August, 2017. This will be the third year in a row, where your Company’s associates will represent India at the World Skills Competition.

In an endeavor to generate ideas towards improving quality, reducing cost, ensuring safety and improving productivity, your Company’s shop floor associates generated about 20 ideas per person.

Significant emphasis was also laid towards raising awareness on health and wellness of employees through annual medical check-ups, health awareness activities and diet food which has become a way of life in the last three years. Software, which generates a complete report for each individual, has been a useful tool in identifying the employees who require focused counselling and monitoring.

Proactive and employee-centric shop floor practices, a focus on transparent communication of business goals, an effective concern resolution mechanism, and a firm belief that employees are the most valuable assets of the Company, are the cornerstone of your Company’s employee relations approach. An ‘open door policy’ and constant dialogue to create win-win situations, have helped your Company build trust and harmony. The Industrial Relations scenario continued to be largely positive across all the Mahindra

Automotive and Tractor manufacturing locations. Bonus settlements were amicably agreed upon at all locations. All this resulted in zero production loss in the Financial Year 2016-17 and helped create a peaceful, healthy and collaborative work environment.

Safety, Occupational Health and Environment

The Company revised its Safety, Occupational Health & Environmental (SOH&E) Policy which, inter alia, covers and focusses on strengthening SOH&E awareness amongst all employees and stakeholders of your Company. The revised SOH&E Policy ensures compliance regarding skills and competency development of employees, business associates, plant and equipment, by maintaining e-compliance systems on monthly basis.

The apex level SOH&E Policy has been further drilled down through separate SOH&E Policies for each of its Businesses and Plants. The revised SOH&E Policy is displayed at prominent locations at all Offices and Plants of your Company and communicated to all its stakeholders.

Objectives and targets from the new revised SOH&E Policy are supported by focused integrated management programs such as i4 safety, safety rounds, kaizens and mistake proofing projects. Your Company demonstrates a strong leadership commitment towards SHO&E, and as a part of the same, multiple measures and actions are implemented with thorough competency training programs like Working on height, Welding and Gas cutting, working on LPG/PNG/CNG and Forklift driving.

At each Plant location, annual events were organised and commemorated like National Safety Day/Week, World Environment Day, Road Safety Week and Fire Service Week. Safety Culture building was demonstrated through Behaviour Based Safety (BBS), Safety Crusade, Levers of Excellence and Waste to Wealth programs in the manufacturing domain. SOH&E awareness training programs were conducted for all stakeholders as per the training calendar through various e-learning modules. In the year under review, your Company initiated an Accelerated Learning Program (ALP) on Safety, for all group employees to further strengthen innovations in safety and best practices related to SOH&E.

Your Company carried out Statutory safety risk assessments, quantitative risk analysis, electrical safety audits of all facilities absorbing new amended legal requirements. For the year under review, your Company initiated a Fire load reduction program at the Plant level.

Your Company’s Plants and locations continued their commitment to improve the wellbeing of employees and contract workmen by organising physical fitness activities like yoga, zumba, occupational health examination camps, medical check-ups, consultation and counselling. Further, all locations observed World Health Day, World Heart Day, World Kidney Day and World Diabetes Day along with Way2Wellness sessions covering topics like Healthy Heart, Diabetes, etc.

Various path breaking projects were implemented by your Company in the areas of Air Pollution Management, Water and Waste Water Management, Solid Waste Management and new techniques to propagate ‘Go Green’ philosophy were undertaken. These Projects cover elimination/ minimisation of environment impact, in line with current and future environmental challenges, prevention of injury, ill health and OHS Hazards, at the first place of their control.

Your Company extended the ‘Go Green’ initiatives to its supplier community through Green Supply Chain Management practices. Your Company also proactively shared good safety practices with business partners. ‘Business Case for Safety’ a book published in association with the National Safety Council and CII, was shared with all suppliers.

Through stakeholder engagement, your Company monitors sustainability development initiatives, which include climate change mitigation, sustainable source use, protection of bio-diversity and certified green building projects with platinum and gold rated facilities at identified locations and reported as per the Global Reporting Initiative (GRI) - G4 Guidelines.

World Environment Day, World Earth Day, World Water Day and Energy Conservation Week and Water Conservation Week are also observed on an annual basis.

Certifications/Recertifications

All Plants of your Company have been recertified under the standard ISO 14001: 2004 and OHSAS 18001: 2007. Further, all Plants are in the process of adopting the revised environmental standard ISO 14001: 2015.

All targets under SOH&E are reviewed on a periodic basis through operations reviews conducted by Senior Management. The focused initiatives and reviews have helped improve SOH&E performance of your Company by over 50% in the period 2016-17.

K. BOARD & COMMITTEES

Directors

Pursuant to the recommendation of Governance, Nomination and Remuneration Committee, the Board at its Meeting held on 11^th November, 2016 designated and appointed Mr. Anand G Mahindra, who was holding the position of Chairman and Managing Director, as Executive Chairman of the Company for a period of five years with effect from 12^th November, 2016 upto and including 11^th November, 2021 and appointed Dr. Pawan Goenka who was holding the position of Executive Director and Group President (Auto & Farm Sector), as Managing Director of the Company for a period of four years from 12^th November, 2016 upto and including 11^th November, 2020, subject to approval of the Members of the Company at the ensuing Annual General Meeting (“AGM”).

The Board of Directors at the same Meeting based on the recommendation of the Governance, Nomination and Remuneration Committee appointed Mr. T. N. Manoharan as an Additional Director (Independent and Non-Executive) of the Company for a period of 5 consecutive years commencing from 11^th November, 2016 to 10^th November, 2021 subject to the approval of the Members in the ensuing Annual General Meeting.

Dr. Pawan Goenka retires by rotation and, being eligible, offers himself for re-appointment at the 71^st Annual General Meeting of the Company scheduled to be held on 4^th August, 2017.

Mr. Deepak S. Parekh would cease to hold office as an Independent Director of the Company from 8^th August, 2017, upon completion of his tenure as approved by the Shareholders at the 68^th AGM of the Company.

Mr. Parekh was appointed as a Director on the Board of the Company with effect from 29^th August, 1990. He has made significant contributions towards effective functioning of the Board and has been acting as the Chairman of the Audit Committee and Member of the Strategic Investment Committee and Risk Management Committee of the Company.

The Board has placed on record its sincere and deep appreciation of the invaluable counsel and contribution made by Mr. Parekh to the Company. The 27 years that Mr. Parekh was on the Board of the Company were very eventful and critical years in the Company’s history.

Mr. Parekh’s immense knowledge, financial acumen and expertise helped the Board and the Company negotiate in these challenging times while at the same time adhering strictly to sound financial discipline with the highest standards of Corporate Governance.

Quote from Chairman Emeritus

“An Audit Committee of the Board was established as early as 1987 long before it was mandated by law. Deepak Parekh was inducted as a Member of the Audit Committee in August, 1992 and elected Chairman in May, 2000.

With his vast knowledge and experience of the Corporate World, he set about establishing norms and practices of conducting business with the highest standards of ethical governance. He guided the affairs of the Company towards achieving high standards of ethics and total transparency in all issues.

His contribution to the affairs of the Company as well as on matters of strategy and governance has been immense and I would like to take this opportunity to put on record my deep appreciation of the guidance and friendship with which he conducted his Chairmanship. I wish him many years of happiness and good health and he will surely be missed.”

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual evaluation of its own performance and that of its Committees as well as performance of 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 Director. The Directors expressed their satisfaction with the evaluation process.

The details of programs for familiarisation of the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, number of programs and number of hours spent by each Independent Director in terms of the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are available on the Company’s website and can be accessed at the Web-link: http://www.mahindra.com/resources/investor-reports/FY17/ Annual Reports/Links-AnnualReport.zip

In line with the principles of transparency and consistency, your Company has adopted the following Policies which, inter alia, include criteria for determining qualifications, positive attributes and independence of a Director:

(a) Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management;

(b) Policy for remuneration of the Directors, Key Managerial Personnel and other employees.

The Policies mentioned at (a) and (b) above are attached as Annexure V-A and V-B respectively and form part of this Report.

Directors’ Responsibility Statement

Pursuant to section 134(5) of the Companies Act, 2013, your Directors, based on the representations received from the Operating Management, and after due enquiry, confirm that:

(a) in the preparation of the annual accounts for the Financial Year ended 31^st March, 2017, the applicable accounting standards have been followed;

(b) they had in consultation with Statutory Auditors, selected accounting policies and applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2017 and of the profit of the Company for the year ended on that date;

(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and irregularities;

(d) they have prepared the annual accounts on a going concern basis;

(e) they have laid down adequate Internal Financial Controls to be followed by the Company and such Internal Financial Controls were operating effectively during the Financial Year ended 31^st March, 2017;

(f) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively throughout the Financial Year ended 31^st March, 2017.

Board Meetings and Annual General Meeting

A calendar of Meetings is prepared and circulated in advance to the Directors.

During the year 1^st April, 2016 to 31^st March, 2017, six Board Meetings were held on: 30^th May, 2016, 10^th August, 2016, 11^th November, 2016, 3^rd December, 2016, 10^th February, 2017 and 28^th March, 2017. The 70^th Annual General Meeting (AGM) of the Company was held on 10^th August, 2016.

Meetings of Independent Directors

The Independent Directors of your Company meet before the Board Meetings without the presence of the Executive Chairman or the Managing Director or other Non-Independent Directors or Chief Financial Officer or any other Management Personnel.

These Meetings are conducted in an informal and flexible manner to enable the Independent Directors to discuss matters pertaining to, inter alia, review of performance of Non-Independent Directors and the Board as a whole, review the performance of the Executive Chairman of the Company (taking into account the views of the Executive and Non Executive Directors), review the performance of the Company, 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.

Audit Committee

The Committee comprises of five Directors viz. Mr. Deepak S. Parekh (Chairman of the Committee), Mr. Nadir B. Godrej, Mr. M. M. Murugappan, Mr. R. K. Kulkarni and Mr. T. N. Manoharan. All the Members of the Committee are Independent Directors and possess strong accounting and financial management knowledge. The Company Secretary of the Company is the Secretary of the Committee.

All the recommendations of the Audit Committee were accepted by the Board.

L. GOVERNANCE Corporate Governance

Your Company has a rich legacy of ethical governance practices many of which were implemented by the Company, even before they were mandated by law. Your Company is committed to transparency in all its dealings and places high emphasis on business ethics. A Report on Corporate Governance along with a Certificate from the Statutory Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report.

Vigil Mechanism

The Vigil Mechanism as envisaged in the Companies Act, 2013, the Rules prescribed thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is implemented through the Company’s Whistle Blower Policy to enable the Directors, employees and all stakeholders of the Company to report genuine concerns, to provide for adequate safeguards against victimisation of persons who use such mechanism and make provision for direct access to the Chairman of the Audit Committee.

Whistle Blower Policy of your Company is available on the Company’s website and can be accessed at the Web-link: http://www.mahindra.com/resources/investor-reports/FY17/Annual Reports/Links-AnnualReport.zip

Further details are available in the Report on Corporate Governance that forms part of this Annual Report.

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

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. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment.

All employees (permanent, contractual, temporary, trainees) are covered under this Policy. The Policy is gender neutral.

During the year under review, 4 complaints with allegations of sexual harassment were filed, of which 3 were disposed-off as per the provisions of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and as of 31^st March, 2017, 1 complaint is pending.

Business Responsibility Report

The ‘Business Responsibility Report’ (BRR) of your Company for the year 2016-17 forms part of this Annual Report as required under Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Your Company strongly believes that sustainable and inclusive growth is possible by using the levers of environmental and social responsibility while setting aspirational targets and improving economic performance to ensure business continuity and rapid growth. Your Company is committed to leverage ‘Alternative Thinking’ to build competitive advantage in achieving high shareholder returns through customer centricity, innovation, good governance and inclusive human development while being sensitive to the environment.

Risk Management

Your Company has a well-defined risk management framework in place. The risk management framework works at various levels across the enterprise. These levels form the strategic defence cover of the 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 of the Board 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.

Your Company has developed and implemented a Risk Management Policy which is approved by the Board. The Risk Management Policy, 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 organisation.

M. CORPORATE SOCIAL RESPONSIBILITY AND RELATED MATTERS

Corporate Social Responsibility (CSR)

Your Company’s Corporate Social Responsibility efforts continue to be directed towards supporting the constituencies of girls, youth and farmers by innovatively supporting them through programs in the domains of education, health and environment, while harnessing the power of technology. It is only through these sustained and continued efforts that your Company can build and consolidate its CSR initiatives which contribute to nation building.

During the last Financial Year, your Company has been making an impact through its ongoing CSR programs, some of the notable ones include Project Nanhi Kali, which supports the education of underprivileged girls, Mahindra Pride Schools, which provide livelihood training to youth from socially and economically disadvantaged communities and a variety of other scholarship programs, which range from providing opportunities to youth from low income group families to undergo diploma courses at vocational education institutes, to allowing meritorious students to pursue their post graduate studies at reputed universities overseas, to allowing meritorious and deserving students to study at the Mahindra United World College in Pune. Your Company has also helped set up a premier engineering institution ‘Mahindra Ecole Centrale’ (MEC) in Hyderabad, in partnership with Ecole Centrale, Paris and the Jawaharlal Nehru Technological University, Hyderabad. In the area of public health, your Company sponsored Lifeline Express, through which medical care and treatment was provided to communities who do not have access to any medical facilities. Further, your Company supported critical patients suffering from cancer and other life threatening illnesses. Your Company also contributed to the environment by adding green cover through planting of over two million trees this year through Project Hariyali. Your Company continues to support small and marginal farmers by training them in effective farming practices including soil health, crop planning, creating model farms with bio-dynamic farming practices, with a view to increasing crop productivity, through the Wardha Farmer Family Project, Krishi Mitra Project and Integrated Watershed Development Project. Your Company also partnered with the Maharashtra State Government to support the Village Social Transformation Mission of the Government. Your Company created a ‘Zero Fatality Corridor’ to ensure ‘zero’ deaths due to accidents on Mumbai Pune Expressway. In addition to the above CSR initiatives, your Company has a vibrant Employee Social Options platform through which the employees are provided opportunities to give back to the community.

CSR Policy

The Corporate Social Responsibility Committee had formulated and recommended to the Board, a Corporate Social Responsibility Policy (“CSR Policy”) which was subsequently adopted by it and is being implemented by the Company. The CSR Policy including a brief overview of the projects or programs undertaken can be accessed at the Company’s website through the Web-link: http://www.mahindra.com/resources/investor-reports/FY17/Annual Reports/Links-AnnualReport.zip

CSR Committee

The CSR Committee comprises of Dr. Vishakha N. Desai (Chairperson), Mr. Anand G. Mahindra, Mr. R. K. Kulkarni, Dr. Pawan Goenka and Mr. Vikram Singh Mehta. The Committee, inter alia, monitors the CSR activities.

During the year under review, your Company spent Rs. 83.57 crores on CSR activities. The amount equal to 2% of the average net profit for the past three financial years required to be spent on CSR activities was Rs. 83.30 crores. The detailed Annual Report on the CSR activities undertaken by your Company in Financial Year 2017, is annexed herewith marked as Annexure VI.

Sustainability Initiatives

During the year under review, the 9^th Sustainability Report for the year 2015-16 was released. This year’s Report was externally assured by KPMG and conforms to the fourth generation ‘GRI G4-Core option’.

Your Company maintained the focus on the Environmental, Social and Governance (ESG) parameters, on its journey from “Conservation to Rejuvenation” in the year under review by building on the initiatives of the previous years as also initiating new ones. Your Company continued the bio-diversity assessments across selected locations to further the actions on the India Business and Bio-diversity Initiative (IBBI).

Mr. Anand G. Mahindra, Executive Chairman of your Company represented the Corporate World at the historic Paris Climate Change Agreement Signing ceremony in the United Nations headquarters, New York.

Your Company is the first Indian Company to announce its internal Carbon Price of US $10 per ton of carbon emitted. Carbon Pricing is an internationally recognised business tool that enables companies to create resources which are invested in low carbon technologies, which help reduce future emissions and lower operating costs. An international webinar featuring Dr. Pawan Goenka, Managing Director was held in the reporting year in collaboration with Yale University and World Bank led Carbon Pricing Leadership Coalition.

The Sustainability performance for your Company for the Financial Year 2016-17 will be elaborated in detail in the GRI Report which is under preparation and will be ready for release shortly.

Your Company was recognised for its leadership position on the ESG dimensions during the year under review, by way of:

- Winning ‘Leadership in Sustainability Strategy’ at Parivartan Sustainability Leadership Awards 2016.

- Winning the second prize for the Sustainability Report at the Indian Chamber of Commerce Awards 2016.

- Winning ‘Manufacturing Innovator for the year’ at TIME India Awards 2017.

- Winning the prestigious Cll - ITC Sustainability Award 2016 in CSR category as ‘Commendation for significant achievement’.

- Winning Cll National Award 2016 for ‘Excellence in Water Management’ (for Nashik Plant).

- Winning ‘Global Sustainability Award 2016 - Platinum Rating’ at World Renewable Energy Congress, 2016 organised by Energy and Environment Foundation (for Igatpuri Plant).

- Retaining the status of getting listed on the Dow Jones Sustainability Index - 2016 under the ‘Emerging Market Index’ for the consecutive third year with improvement in percentile scores.

- Retaining its position in the top 10 in the India 200 Carbon Disclosure Leadership Index 2016.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure VII and is attached to this Report.

N. SECRETARIAL

Share Capital

The issued, subscribed and paid-up Share Capital of the Company stood at Rs. 310.55 crores as at 31^st March, 2017 comprising of 62,10,92,384 Ordinary (Equity) Shares of Rs. 5 each fully paid-up. There was no change in Share Capital during the year under review.

Extract of Annual Return

Pursuant to section 134(3)(a) and section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return as on 31^st March, 2017 in Form No. MGT-9 is attached herewith as Annexure VIII and forms part of this Report.

GENERAL

The Executive Chairman of the Company did not receive any remuneration or commission from any of the subsidiary of your Company. The Managing Director of the Company did not receive any commission from any of its subsidiaries and has not exercised ESOPs of subsidiaries of the Company during the year, which were granted in the earlier year(s).

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions/ events on these items during the year under review except as stated hereunder:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of Shares (Including Sweat Equity Shares) to employees of the Company under any Scheme save and except ESOS referred to in this Report.

3. Significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and the Company’s operation in future.

The Honourable Supreme Court on 29^th March, 2017, passed Orders that on and from 1^st April, 2017, non BS-IV compliant vehicles would not be permitted to be sold in India by any manufacturer or dealer and prohibited vehicle registration authorities from registering such vehicles. The Financial Statements have recognised an impact of Rs. 171.01 crores arising from the above.

The said Order of the Honourable Supreme Court will not impact the going concern status of the Company.

4. Voting rights which are not directly exercised by the employees in respect of shares for the subscription/ purchase of which loan was given by the Company (as there is no scheme pursuant to which such persons can beneficially hold shares as envisaged under section 67(3)(c) of the Companies Act, 2013).

For and on behalf of the Board

ANAND G. MAHINDRA

Executive Chairman

Mumbai, 30^th May, 2017

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Mar 31, 2016

The Directors present their Twenty-Ninth Annual Report together with the audited accounts of your Company for the year ended March 31, 2016.

FINANCIAL RESULTS (STANDALONE)

(Rs. in Million)

For the year ended March 31 2016 2015

Income 220,782 192,872

Profit before Interest, Depreciation, exceptional items and tax 45,221 33,903

Interest (533) (479)

Depreciation (5,455) (4,733)

Profit before exceptional items and tax 39,233 28,692

Exceptional items - 613

Profit Before Tax 39,233 29,305

Provision for taxation (7,033) (6,743)

Profit after tax 32,200 22,562

Balance brought forward from previous year 63,55 943,856

Adjustments on account of Amalgamation 2,010 1,140

Profit available for appropriation 97,769 67,558

Transfer from Debenture Redemption Reserve - 2,972

Final Dividend Including tax* (7) (33)

Reversal of Provision for Tax on Dividend 1,137 -

Dividend (Proposed) (11,614) (5,765)

Tax on dividend (2,364) (1,173)

Transfer from General Reserve 7,732 -

Balance carried forward 92,653 63,559

* In respect of equity shares issued pursuant to exercise of Stock Options after March 31, 2015 but before book closure period, the Company paid dividend of Rs. 5.5 Million for the year 2014-15 and tax on dividend thereto of Rs. 1.1 Million as approved by the shareholders at the Annual General Meeting held on July 28, 2015.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 12/- per Equity Share (240%), payable to those Shareholders whose names appear in the Register of Members as on the Book Closure Date. The dividend includes an additional special dividend of Rs. 6/- per share to commemorate the 10th year of Company''s listing on the stock exchanges.

SHARE CAPITAL

During the year under review, your Company allotted 7,021,157 equity shares on the exercise of stock options under various Employee Stock Option Plans. Consequently the issued, subscribed and paid-up equity share capital has increased from Rs. 4,803.94 Million divided into 960,788,912 equity shares of Rs. SI- each to Rs. 4,839.05 Million divided into 967,810,069 equity shares of t SI- each.

BUSINESS PERFORMANCE / FINANCIAL OVERVIEW

The Company offers a bouquet of services which includes Telecom IT & Network Services, Consulting, Application Outsourcing, Infrastructure Outsourcing, Engineering Services, BPO, Platform Solutions and Mobile Value Added products and Services. With an impeccable track record of delivery and strong alliances with leading technology and product vendors, the Company serves more than 800 customers, including several of the Fortune 500 Companies.

In the fiscal year 2015-16 the Company''s consolidated revenues increased to Rs. 264,942 Million from Rs. 226,213 Million in the previous year, a growth of 17.1%. The geographic split of revenue was balanced with 47% share of Americas, 29% share of Europe and 24% from Rest of the World.

The consolidated Profit before Interest, Depreciation, Tax and Exceptional Items was at Rs. 48,750 Million, against Rs. 42,987 Million in the previous year. The consolidated Profit After Tax, amounted to Rs. 31,180 Million as against Rs. 26,277 Million in the previous year. The number of customers increased from 767 in the previous year to 807 at the end of fiscal year 2015-16.

In emerging areas of Big Data, Mobility, Network, Cloud, Security, Platforms and Engineering Services, Tech Mahindra is well placed with its breadth of service offerings. Your company has also progressed well in building intellectual property through various Products & Services and Platforms. Your Company is committed towards building a synergistic relationship with its partners to enable, deliver, complete and customized solutions to customers. Tech Mahindra developed an integrated program ''BROP''(Building Relationships and Opportunities and Projects) program, which helps partner organizations and customers to succeed.

There are no material changes or commitments affecting the financial position of the Company between the end of the financial year and to the date of the report.

In summary, Tech Mahindra is well positioned in the markets it serves with a broad range of service offerings and a diversified customer base.

MERGER

During the year under review two wholly owned subsidiaries of the Company viz., Tech Mahindra BPO Limited and New vC Services Private Limited got amalgamated with the Company pursuant to the Scheme of Amalgamation (the "Scheme") sanctioned by the Honorable High Court of Bombay vide its order dated March 4, 2016. The Scheme came into effect on March 29, 2016, upon fling of the court order with the Registrar of Companies, Mumbai and pursuant thereto the entire business and all the assets and liabilities, duties, taxes and obligations of both the transferor companies have been transferred to and vested in the Company from the appointed date i.e., April 1, 2015.

During the year under review, Mahindra Engineering GmbH, a wholly owned subsidiary of the Company, got amalgamated with Tech Mahindra GmbH another wholly owned subsidiary of your Company in Germany.

ACQUISITIONS

During the year, your Company and Mahindra & Mahindra Limited (M&M), have jointly entered into an agreement with Pincar S.r.l., to purchase a controlling stake in Pininfarina S.p.A., an iconic 85 year old legendary Italian styling brand associated among others with Ferrari, Alfa Romeo and Peugeot. The acquisition will complement existing engineering capability of the Company with High-end styling and Engineering Services. As part of the agreement, Tech Mahindra and M&M shall purchase 76.06% of Pininfarina shares from the current controlling shareholder Pincar S.r.l. at a price of Euro 1.1 per share through a Special Purpose Vehicle (SPV), the ownership of which will be with your Company and M&M in the ratio of 60:40. The SPV would also make an open offer to the public shareholders of Pininfarina for the balance 23.94% stake at the same price. The SPV will infuse further funds into Pininfarina by way of Rights issue. Pininfarina will continue to remain an independent Company, listed on the Milan Stock Exchange, with Mr. Paolo Pininfarina continuing as the Chairman of its board.

DETAILS OF SUBSIDIARY / JOINT VENTURES / ASSOCIATE COMPANIES

As on March 31, 2016, your Company has 148 subsidiaries which includes 109 step-down subsidiaries and 4 Associate Companies. There has not been any material change in the nature of the business of the subsidiaries. As required under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, and the Companies Act, 2013, the Consolidated Financial Statements of your Company and all its subsidiaries are provided in this Annual Report. The Consolidated Financial Statements have been prepared in accordance with Accounting Standards AS 21, AS 23 and AS 27 issued by The Institute of Chartered Accountants of India and shown the financial resources, assets, liabilities, income, profits and other details of your Company and its subsidiaries and its share in Associate Company as a single entity, after elimination of minority interest.

The performance and financial position of subsidiaries, associate companies and joint venture companies included in the Consolidated Financial Statement is provided in accordance with the provisions of Section 129 read with Rule 5 of the Companies (Accounts) Rules, 2014 as a separate statement annexed to the Notes on Accounts containing the salient features of the financial statement of Company''s subsidiaries/joint ventures or associate companies in Form AOC – 1.

Pursuant to Rule 8 (5) (iv) of the Companies (Accounts) Rules, 2014, the names of the companies which have become or ceased to be the subsidiaries, joint ventures or associate companies during the year are provided in "Annexure I" to this report.

The policy for determining Material Subsidiaries formulated by the Board of Directors is disclosed on the Company''s website and is accessible on http://www. techmahindra.com/investors/corporate_governance.aspx

HUMAN RESOURCES

Your Company believes that while Technology can enable processes but it is People who actually make things happen. In a journey of delivering tangible business value to stakeholders, Associates are envisioned as a strategic differentiator for the Company. Tech Mahindra''s Employee Value Proposition - Freedom to Explore: Connect, Co-Create and Celebrate – is at the core of its people practices and policies.

Tech Mahindra nurtures globally competitive professionals through robust training programs enabling continuous learning for the Associates. The Company also enables young achievers to demonstrate their leadership skills and strategic thought process through focused early leadership programs like Young CEO, 1000 Leaders, Shadow Board, Global Leadership Cadre (GLC) and Achievers in the Making (AIM). As a refection on the sustained efforts and initiatives undertaken by the learning and career development teams, your Company was ranked No.14 globally at the Training Top 1251 awards – the top rank among all IT organizations worldwide and all Indian organizations across sectors.

Your Company promotes an empowered and collaborative work environment where leaders stay engaged with the Associates and encourage them to challenge conventional thinking. Through the Intrapreneurship Program, Associates have the opportunity to pursue their business ideas and commercialize them with support from mentors and resources from your Company. Your Company also has a comprehensive reward program that appreciates individuals and teams at the unit, functional and organizational levels. Your Company''s Knowledge Management program is one of the best in the 1 Training Top 125 is a premier US based learning industry award. Award winners are organizations with the most successful learning and development programs in the world.

industry and the Company was conferred with the ASIAN Knowledge Management MAKE (Most Admired Knowledge Enterprise) Award in 2015. Similarly, the social Intranet portal, MyBeatPlus, fosters connecting, co-creating and celebrating within the organization, and was awarded the "Best Marketing Idea Award" at The Great Indian IT Marketing Summit.

Your Company is committed to providing a holistic employment experience to Associates with the flexibility to balance both professional and personal commitments. The comprehensive Wealth of Wellness (WoW) offerings enhance physical, mental, emotional and spiritual wellbeing of the Associates. The Company was ranked 2nd in the country for Wellness practices at Chestnut Global Partner''s Employee Health and Wellness Ranking 2015. There is a significant focus on creating a fun-filled, high energy work environment where personal milestones, organizational successes and special occasions are celebrated with fervour and enthusiasm involving not just Associates but also their families.

During the year under review, Tech Mahindra''s people practices, policies and programs have been awarded in various external forums representing members from not just the Information Technology industry but the entire spectrum of the corporate world.

Tech Mahindra won 4 Awards at the Society for Human Resources Management (SHRM) India Annual Awards 2015:

- Winner of Excellence in Social Media People Practices

- Winner of Excellence in Developing Leaders of Tomorrow

- Winner of Excellence in Community Impact

- Runners Up in Employee Health and Wellness Practices

Tech Mahindra was also recognized as one amongst the Top 3 in the country for its People Practices at the Business World HR Excellence Awards 2015 apart from being awarded the Change Champion Award.

These awards and recognitions have positioned Tech Mahindra as an organization that puts people first, delivers future focused excellence in the field of People Management and recognizes the importance of human capital as a key driver of business growth.

QUALITY

Your Company continues its focus on quality and strives to exceed customer expectations at all times. It is certified under various standards to meet client demands and enhance value delivery - Successfully assessed at CMMI Dev & SVC V1.3 L5, TMMi L5, TL9K, ISO 9001:2008, ISO 20000:2011, ISO 27001: 2013, ISO 13485, Auto Spice, AS9100:2009 (Standard for Aerospace domain – scope of certification limited to the aerospace business within Tech Mahindra). In addition to these, your Company also maintains its commitment to health, safety and environment by continually improving its processes in accordance with ISO 14001 and OHSAS 18001 standards.

Your Company is also certified on ISO 22301:2012 (Societal Security) and has a comprehensive Business Continuity and Disaster Recovery framework, to prevent potential business disruptions in the event of any disaster. It has processes that will help resume services to customers ''acceptable service levels. Automated Service Desk with SLAs for enabling business and Vulnerability Assessment and Penetration Testing Lab for secured corporate network operations are highlights showcasing information security posture of the Organization.

Tech Mahindra (IT Division) has emerged as the ''organization with highest maturity of business excellence practices ''at Mahindra Group (Services Sector). It has been assessed at TMW Maturity Stage 6 (on scale of 1-10 stages) of Mahindra Business Excellence Framework – The Mahindra Way.

These certifications are testimony of the robustness of business processes and at large the quality culture imbibed in the organization.

Your Company has also introduced Practices for transforming Quality Assurance processes to Delivery Assurance processes with focus on Product Assurance and Architecture Assurance; these are measured and monitored through various indices. One such initiative is "Execution Excellence Index" focusing on achieving high project maturity, improved tools usage and standardization, knowledge management and performance on key business metrics, in order to strengthen further the Business Excellence in what we deliver to the customers, thereby achieve better Customer satisfaction. Your Company is putting all the initiatives in place in order to ensure we deliver as stated in Quality Policy.

DIRECTORS

During the year under review, Mr. Vineet Nayyar Executive Vice Chairman of the Company retired on August 09, 2015 and the Board thought it appropriate that the Company should continue to avail the benefit of Mr. Nayyar''s vast experience and expertise. Accordingly, your Board of Directors approved the recommendation of the Nomination and Remuneration Committee of the Board (the Committee) and appointed Mr. Vineet Nayyar as an Additional Director and designated him as Vice Chairman of the Company with effect from August 10, 2015. Mr. Nayyar has been associated with the Company for more than a decade - initially as Managing Director and subsequently as Executive Vice Chairman. Mr. Nayyar has contributed immensely to the growth of the Company and has been instrumental in bringing the Company to its current status.

Further, the Board considered the recommendation of the Committee and appointed Mr. V. S. Parthasarathy, who is the Group CFO & Group CIO of Mahindra & Mahindra Ltd. and member of the Group Executive Board, as an Additional Director with effect from August 10, 2015.

The approval of the Members is sought for appointment of Mr. Vineet Nayyar (DIN: 00018243) and Mr. V. S. Parthasarathy (DIN: 00125299) as Directors of the Company, liable to retire by rotation.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and Regulation 16 (1) (b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Pursuant to the provisions of Section 152 (6) (c) of the Companies Act, 2013, Mr. C. P. Gurnani, Director (DIN: 00018234) is liable to retire by rotation and offers himself for reappointment.

Board evaluation

Pursuant to the provisions of the Companies Act, 2013, the Board has devised a policy on evaluation of performance of Board of Directors, Committees and Individual directors. This policy is also in compliance to Regulation 19 read with Schedule II, Part D of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Accordingly, the Chairman of the Nomination and Remuneration Committee obtained from all the board members duly filled in evaluation forms for evaluation of the Board as a whole, evaluation of the Committees and peer evaluation. The summary of the evaluation reports were presented to the respective Committees and the Board for their consideration.

policy on Directors Appointment and Remuneration

The Governance policies laid down by the Board of directors of your Company include:

i. Policy on appointment and removal of Directors, Key Managerial Personnel and Senior Management

ii. Policy on remuneration to the Directors, Key Management Personnel, Senior Management and other Employees

The extract of these two policies are provided in "Annexure II".

training

The Company has laid down a policy on training for Independent Directors, as part of the governance policies. The directors are updated on the regulatory changes, Business strategy and operations by the senior leadership of the Company periodically.

Key Managerial personnel (KMps)

Pursuant to the provisions of Section 203 of the Companies Act, 2013, Mr. C. P. Gurnani, Managing Director & Chief Executive Officer, Mr. Milind Kulkarni, Chief Financial Officer and Mr. G. Jayaraman, Company Secretary & Chief Compliance Officer are the Key Managerial Personnel of the Company.

During the year under review, Mr. Vineet Nayyar ceased to be Key Managerial Personnel of the Company with effect from August 10, 2015 consequent to his retirement from the position of Executive Vice Chairman.

DIRECTORS''RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, your Directors, based on the representation(s) received from the Operating Management and after due enquiry, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and, reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of the profit of the Company for the year ended on that date;

iii. proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts have been prepared on a going concern basis;

v. they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

vi. the proper systems to ensure compliance with the provisions of all applicable laws are in place and are adequate and operating effectively.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has internal financial controls which are adequate and were operating effectively. The controls are adequate for ensuring the orderly & efficient conduct of the business, including adherence to the Company''s policies, the safe guarding of assets, the prevention & detection of frauds & errors, the accuracy & completeness of accounting records and timely preparation of reliable financial information.

STATUTORY AUDITORS

M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, [Firm''s Registration No. 117366W/W-100018] the Auditors of your Company, hold office upto the conclusion of the forthcoming Annual General Meeting (AGM) of the Company. Pursuant to provisions of Section 139(2) of Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, M/s. Deloitte Haskins & Sells LLP are eligible for appointment as Auditors. Your Company has received a written confirmation from M/s. Deloitte Haskins & Sells LLP, Chartered Accountants to the effect that their appointment, if made, would satisfy the criteria provided in Section 141 of the Companies Act, 2013 for their appointment. The Board recommends the appointment of M/s. Deloitte Haskins & Sells LLP, Chartered Accountants as the Auditors of the Company from the conclusion of the ensuing AGM to the conclusion of the next AGM. There are no qualifications, reservation or adverse remark or disclaimer made in the audit report for the Financial Year 2015-16.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Dr. K. R. Chandratre, Practicing Company Secretary, Pune to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is provided as "Annexure III". There are no qualifications, reservation or adverse remark or disclaimer made in the Secretarial Audit Report.

EXTRACT OF THE ANNUAL RETURN

Pursuant to the provisions of Section 134 (3) (a) of the Companies Act, 2013, the extract of the Annual Return in Form MGT-9 is attached as "Annexure IV".

MANAGERIAL REMUNERATION

Disclosures of the ratio of the remuneration of each director to the median employee''s remuneration and other details as required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided as "Annexure V".

None of the directors or Managing Director of the Company, received any remuneration or commission from Subsidiary Companies of your Company.

The details of remuneration paid to the Directors including Executive Directors of the Company are given in Form MGT-9 forming part of the Directors Report.

PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Companies Act, 2013 ("the Act") read with Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. However, pursuant to first proviso to Section 136(1) of the Act, this Report is being sent to the Shareholders excluding the aforesaid information. Any shareholder interested in obtaining said information, may write to the Company Secretary at the Registered Office / Corporate Office of the Company and the said information is available for inspection at the Registered Office of the Company.

Anti-Sexual Harassment policy

Your Company laid down Anti Sexual Harassment policy and it is made available on the website of the Company. The Company has zero tolerance on Sexual Harassment at workplace. During the year under review, there were no cases fled pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

EMPLOYEE STOCK OPTION PLANS

During the year under review, there were no material changes in the Employee Stock Option Plans (ESOPs) of the Company and the Schemes are in compliance with the SEBI Regulations on ESOPs. As per Regulation 14 of SEBI (Share Based Employee Benefits) Regulations, 2014 read with SEBI circular dated June 16, 2015 the details of the ESOPs are uploaded on the Company''s website http://www.techmahindra.com/sites/ResourceCenter/ brochures/investors/corporategovernance/Details-of- ESOPs.pdf.

CORPORATE GOVERNANCE

A report on Corporate Governance covering amongst others, composition, details of meetings of the Board and Committees along with a certificate for compliance with the conditions of Corporate Governance issued by the Statutory Auditors of the Company, in accordance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of your Company''s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

RISK MANAGEMENT

The Risk Management Committee of the Board of Directors periodically reviews the Risk Management framework, identified risks with criticality and mitigation plan. The elements of risk as identified for the Company with impact and mitigation strategy are set out in the Management Discussion and Analysis Report.

ESTABLISHMENT OF VIGIL MECHANISM

Your Company has laid down Whistle Blower Policy covering Vigil Mechanism with protective Clauses for the Whistle Blowers. The Whistle Blower Policy is made available on the website of the Company.

DEPOSITS / LOANS & ADVANCES, GUARANTEES OR INVESTMENTS

Your Company has not accepted any deposits from the public during the year under review. The particulars of loans/advances, guarantees and investments under Section 186 of the Companies Act, 2013 are given in the notes forming part of the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All transactions entered into with Related Parties as defined under Section 2(76) of the Companies Act, 2013 and Regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, during the financial year were in the ordinary course of business and are at an arm''s length basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no materially significant transactions with related parties in the financial year which were in conflict with the interest of the Company and requiring compliance of the provisions of revised Regulation 23 of the Listing Regulations. Suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes forming part of the Financial Statements.

The Company has formulated a policy on materiality of Related Party Transactions and dealing with Related Party Transactions which has been uploaded on the Company''s website http://www.techmahindra. com/sites/Resource Center/Brocheres/investors/ corporate governance/RPTPolicyAmended.pdf.

The particulars of Related Party Transactions in prescribed Form AOC - 2 are attached as "Annexure VI".

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are provided in "Annexure VII" which forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR vision of your Company is "Empowerment through Education."

In compliance with the guidelines prescribed under Section 135 of the Companies Act, 2013, your

Company constituted a Corporate Social Responsibility (CSR) Committee. Your Board of Directors laid down the CSR Policy, covering the Objectives, Focus Areas, Governance Structure and Monitoring & Reporting Framework among others. The policy is available at http://www.techmahindra.com/society/default.aspx.

Your Company''s social initiatives are carried out by Tech Mahindra Foundation and Mahindra Educational Institutions.

TECH MAHINDRA FOUNDATION (TMF)

The Tech Mahindra Foundation, the CSR arm of the Company, established in 2007 as a Section 25 Company of erstwhile Companies Act, 1956, works towards a stated mission:

"Educated, skilled and able women and men are a country''s true strength".

During the year under review, Tech Mahindra Foundation conducted 160 high-impact projects with 90 partners, reaching out to 150,000 children and youth across these locations.

School education

The Foundation''s work in school education focuses upon three thematic areas: school improvement, teacher empowerment and learning enrichment. The key initiatives include:

All Round Improvement in School education (ARISE):

Tech Mahindra Foundation''s educational initiatives under ARISE are long-term school improvement programmes, run in partnership with local governments and partner organisations. The Foundation has adopted 60 schools across India and is working with 18 partners to turn them around completely into model schools of excellence. ARISE initiatives encompass educational empowerment programmes for children with disabilities.

Shikshaantar:

Shikshaantar, envisioned as a programme for enhancing capacity of government school teachers, has taken rapid strides during the year. TMF has been working with the East Delhi Municipal Corporation to manage its In-Service Teacher Education Institute (ITEI), where teachers from nearly 400 primary schools receive quality training on a regular basis.

Shiksha Samvardhan:

Shiksha Samvardhan, or the education enrichment programme, is a thematic intervention around learning enhancement initiatives of the Foundation, towards making learning interesting, child-centred and activity-based to reduce cumulative burden of non-comprehension and to promote grade appropriate competencies.

employability:

Skills for Market Training (SMART) is the Foundation''s fagship programme in employability. It is built on the vision of an educated, enlightened and employed India, and a belief that educated and skilled youth are the country''s true strength. The programme started with 3 Centres in 2012 and is currently running 65 Centres at 10 locations across India. These include SMART Centres, SMART Centres (training for people with disabilities), SMART-T Centres (training in technical trades) and the first SMART Academy for Healthcare in Delhi. The Academy will closely engage with the industry stalwarts for constant curriculum upgradation and placement.

During the year under review, your Company trained ~16,000 young women and men under its SMART programme. More than 75-80% of the graduates are placed in jobs upon successful completion of the training, across multiple industries.

MAHINDRA EDUCATIONAL INSTITUTIONS (MEI)

technical education

Your Company''s initiatives in technical education are carried out through Mahindra Educational Institutions (MEI), under which the Institution has extended infrastructural and operational support to Mahindra Ecole Centrale, a state of-the-art technical institution in Hyderabad. The institution offers a four-year B.Tech Programme in association with Ecole Centrale, Paris under an industry academia memorandum of understanding with Jawaharlal Nehru Technological University, Hyderabad.

The institution''s vision is to train engineers to be entrepreneurial and innovative as well as technically trained, so that they are capable of meeting the greatest challenges of the era. It is aligned to MEI''s work for the cause of promoting quality higher education by establishing institutions of higher learning, encourage education and research work in different disciplines and to promote innovation and technology development.

The Annual Report on CSR activities is provided as "Annexure VIII".

SUSTAINABILITY

Your company believes that responsible business can be possible only when aligned to sustainable development. Thus the Company concentrated its efforts on leveraging Sustainability as a core aspect when implementing strategies across all dimensions- social, economic and environmental. The focus on next generation solutions, attracting and retaining the right talent and identifying the environmental goals ensure that company adheres to a business strategy that impacts positively and creates a sustainable value for all its stakeholders. Your company''s current rankings in Sustainability indices affirm its efforts and validate the decision in aligning business with sustainability. With its sustainable development efforts remaining an unchanging priority, your Company is now looking at a future that is economically viable, environmentally friendly and socially just.

Tech Mahindra has been part of the Sustainability movement within the M&M Group and had been earlier reporting its sustainability performance in the Mahindra Group Sustainability Report. Since 2013-14, your Company has been highlighting the Sustainability performance in stand-alone Tech Mahindra Sustainability reports. The performance for both years has been externally assured by KPMG in accordance with the latest guidelines of the internationally accepted, Global Reporting Initiative (GRI). The detailed reports can be accessed at http:// www.techmahindra.com/company/Sustainability.aspx.

The focused efforts of your Company ensured that it has done well in the 3-year targets taken for critical material issues identifed in its business operations. Your Company is now in the process of mapping out the next 3-year roadmap with more emphasis on carbon emissions, carbon pricing and becoming carbon neutral.

The Company''s responsibilities and emphasis on its green eco-system is seen through the various energy, water and waste reduction initiatives that have helped cut down the carbon emissions. The Company insistence on associates following 4Ps- Pedal, Paidal, Pool and Public transport have also highlighted the importance of reducing pollution and being environmentally friendly. The Green Marshals at TechM, a small band of passionate associates spearhead the cause of environment and advocate sustainability across the organisation. The customers were helped by the Company to realize their sustainability objectives through its spectrum of services such as SMART cities solutions, Mobility, Cloud based solutions, platforms, data center consolidation services, MICRO Grid and Energy Management Services. We have ensured that we attract, mentor and retain the best talent through effecting an assured career development path and a feasible work-life balance.

The recent leadership position across platforms such as DJSI, CDP and CSR NewsAsia Rankings 2015, affrm its efforts and organizational strategy on sustainability. The highlights for the year 2015-16 have been in the following areas:

- Installation of 4277 Occupancy sensors across Pune, Hyderabad, Noida, Chennai & Bhubaneshwar led to reduced electricity consumption of 1159067 kWh & Carbon Emission Savings of 950.43 MTCO2.

- Ergonomics, Yoga and Wealth of Wellness initiative for associate well being.

- Successful commissioning of solar plants with a capacity of 1928 kWp at Chennai and Hyderabad. The overall capacity of Solar plants is now 2442kWp and the plants generated 2232875 units of Green power and Carbon Emission Savings of 1830.95 MTCO2.

- Participation and merit inclusion in Carbon Disclosure Project 2015 and Dow Jones Sustainability Index 2015.

- 121348 Kg of E-waste disposed through government authorized certifed vendors for recycling.

- Sewage Treatment Plants across 8 locations helped recycle and reuse 405139.2 Kl of water.

- Recycling of wet waste through vermicompost yielded 53.7 tons of manure which was used for landscaping.

- Green procurement of 2353 Laptops & 4795 Desktops helped save 607296 kWh of electricity & Carbon Emission Savings of 497.98 MTCO2.

- Reduction of Carbon emissions Scope 1 & 2 by 4.32% since base year FY 2012-13.

Pursuant to Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Business Responsibility Report is attached and forms part of this Annual Report.

AWARDS AND RECOGNITION

Your Company continued its quest for excellence in its chosen area of business to emerge as a true global brand. Several awards and rankings continue to endorse your Company as a thought leader in the industry. Mr. C. P. Gurnani, Managing Director & Chief Executive Officer was awarded the Best CEO of the Year Award at Forbes India Leadership Awards 2015. The awards / recognitions received by the Company during the year 2015-16 include:

- Golden Peacock Award in Innovation

- National Award for Supply Chain and Logistics Excellence

- ISG UK & Ireland Paragon Award for Collaboration

- Indo American Corporate Excellence Award for Excellence in CSR

- European IT Excellence Awards

- Dow Jones Sustainability Index under both emerging Markets and DJSI world Category

- Golden Peacock Award for Risk Management

- Deloitte Tech Fast 50 India 2015 Program

- Forbes 100 Middle East - Global meets Local 2015 Award

- Golden Peacock HR Excellence Award for Outstanding People Management Practices

- ET Telecom Awards for Cloud Technology

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the contributions made by employees towards the success of your Company. Your Directors gratefully acknowledge the co-operation and support received from the shareholders, customers, vendors, bankers, regulatory and Governmental authorities in India and abroad.



For and on behalf of the Board

Place: Mumbai Anand G. Mahindra

Date: May 24, 2016 Chairman

---

Mar 31, 2015

Dear Members,

The Directors are pleased to present their Twenty-Fifth Report together with the audited accounts of your Company for the Financial Year ended 31st March, 2015.

The performance highlights and summarised financial results of the Company are given below:

PERFORMANCE HIGHLIGHTS

- Consolidated income for the year increased by 14% to Rs.6,060.91 Crores as compared to Rs.5,300.55 Crores in 2013-14;

- Consolidated income from operations for the year was Rs. 6,021.14 Crores as compared to Rs. 5,275.23 Crores in 2013-14, a growth of 14%;

- Consolidated profit before tax for the year was Rs.1,399.87 Crores as compared to Rs. 1,461.53 Crores in 2013-14;

- Consolidated profit after tax and minority interest for the year was Rs. 912.91 Crores as compared to Rs.954.42 Crores in 2013-14.

FINANCIAL RESULTS

Rs. in Crores

CONSOLIDATED STANDALONE March 2015 March 2014 March 2015 March 2014

Total Income 6,060.9 5,300.6 5,584.7 4,953.0

Less : Finance Costs 2,643.0 2,281.0 2,496.7 2,188.0

Expenditure 1,972.5 1,532.0 1,792.9 1,394.9

Depreciation/ Amortisation 45.5 26.1 41.5 24.3

Total Expenses 4,661.0 3,839.1 4,331.1 3,607.2

Profit Before Tax 1,399.9 1,461.5 1,253.6 1,345.8

Less : Provision For Tax Current Tax 576.1 580.0 520.0 535.4

Deferred Tax [101.1] [83.3] [98.2] [76.8]

Profit After Tax for the Year before 924.9 964.8 831.8 887.2

Minority Interest

Less : Minority Interest 12.0 10.4 - -

Profit After Tax for the Year after 912.9 954.4 831.8 887.2

Minority Interest

Add : Amount brought forward from 1,883.4 1,457.5 1,728.3 1,358.8

Previous Years

Add : Transfer of opening balance - - 5.3 - in profit and loss statement on amalgamation of Mahindra Business & Consulting Services Private Ltd

Less : Transitional depreciation 9.6 - 3.2 - charge/Special Reserve

Amount available for Appropriation 2,786.7 2,411.9 2,562.2 2,246.0

Appropriations

General Reserve 88.8 91.6 83.2 88.7

Statutory Reserve 179.3 184.7 166.4 177.5

Proposed Dividend on Equity Shares 227.5 216.1 227.5 216.1

Income-tax on Proposed Dividend 45.5 36.1 44.2 35.4

Surplus carried to Balance Sheet 2,245.6 1,883.4 2,040.9 1,728.3

TRANSFER TO RESERVES

The Company proposes to transfer an amount of Rs. 83.2 Crores to the General Reserve and Rs.166.4 Crores to the Statutory Reserve. An amount of Rs. 2,040.9 Crores is proposed to be retained in the Statement of Profit and Loss.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 4 per Equity Share of the face value of Rs. 2 each payable to those Members whose names appear in the Register of Members as on the Book Closure date. The dividend including dividend tax will absorb a sum of Rs. 271.7 Crores [as against Rs. 251.5 Crores on account of dividend of Rs. 3.80 per Equity Share paid for the previous year].

OPERATIONS

Your Company during the year under review, continued to offer a wide range of financial products and services to its customers through diversification of its product portfolio within its vehicle financing business as well as through the introduction and growth of other financial products in rural and semi-urban markets. The overall disbursement registered a decline of 4% at Rs. 24,331.1 Crores as compared to Rs. 25,400.0 Crores in the previous year, on account of difficult market conditions. Despite the diminution in disbursement, your Company was able to retain its leadership position in financing the Mahindra range of vehicles and tractors in addition to extending its lending to vehicles of other Original Equipment Manufacturers (OEMs).

Your Company has a pan-India presence with a network of 1 ,1 08 offices, which is one of the largest amongst Non-Banking Financial Companies operating in rural and semi-urban areas. The new branches opened by the Company in the villages are aimed at enhancing collections and providing services closer to the customers'' doorsteps. Your Company''s nationwide network of branches and locally recruited employees have facilitated in catering to the diverse financial requirements of its customers as well as in developing and strengthening relationship with them. Your Company has cumulatively financed over three and half million customers since its inception.

Total Income grew by 13% to Rs. 5,584.7 Crores for the year ended 31st March, 2015 as compared to Rs. 4,953.0 Crores for the previous year. Profit Before Tax (PBT) declined by 7% to Rs. 1,253.6 Crores as compared to Rs. 1,345.8 Crores for the previous year. Profit After Tax (PAT) declined by 6% to Rs. 831.8 Crores as compared to Rs. 887.2 Crores in the previous year.

During the year under review, the Assets Under Management stood at Rs. 36,878 Crores as at 31st March, 2015 as against Rs. 34,133 Crores as at 31st March, 2014.

There is no change in the nature of business of the Company during the year under review.

DISTRIBUTION OF MUTUAL FUND PRODUCTS

During the year under review, the activity of distribution of Mutual Fund Products (MFP) was carried out across 157 branches covering 20 States. As on 31st March, 201 5, the amount of Assets Under Management outstanding through the Company''s Advisory and Distribution Services on MFP, aggregate of institutional and retail segment, was Rs. 1,601.45 Crores and the number of clients stood at 42,967.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of the Company''s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

CORPORATE GOVERNANCE

Your Company practices a culture that is built on core values and ethical governance practices and is committed to transparency in all its dealings. A Report on Corporate Governance along with a Certificate from the Statutory Auditors of the Company regarding the compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement are annexed to this Report.

SHARE CAPITAL

The issued, subscribed and paid- up Equity Share Capital as on 31st March, 2015 was Rs. 113.75 Crores comprising of 56,87,64,960 Equity Shares of the face value of Rs.2 each. During the year under review, the Company has neither issued shares with differential rights as to dividend, voting or otherwise, nor has issued sweat equity, other than Employee Stock Options under the Employees'' Stock Option Scheme referred to in this Report. As on 31st March, 2015, none of the Directors of the Company holds instruments convertible into Equity Shares of the Company.

STOCK OPTIONS

During the year under review, on the recommendation of the Nomination and Remuneration Committee of your Company, the Trustees of the Mahindra & Mahindra Financial Services Limited Employees'' Stock Option Trust have granted 16,01,507 Stock Options to Eligible Employees under the Mahindra & Mahindra Financial Services Limited Employees'' Stock Option Scheme-2010. No new Options have been granted under the Mahindra & Mahindra Financial Services Limited Employees'' Stock Option Scheme - 2005.

Disclosure pertaining to details of the grants under the Mahindra & Mahindra Financial Services Limited Employees'' Stock Option Scheme-2005 and Mahindra & Mahindra Financial Services Limited Employees'' Stock Option Scheme-2010, in compliance with Clause 14 of the Securities and Exchange Board of India (Share Based Employee Benefits] Regulations, 2014 are set out in Annexure I to this Report. No employee has been issued stock options during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant.

Voting rights on the Shares issued to employees under the aforesaid schemes are either exercised by them directly or through their appointed proxy.

ECONOMY

The global economy continued to expand during 2014 at a moderate, however, uneven pace at 3.3% up from 3% in 201 3. Increasingly divergent trends have been observed in major economies. U.S. exceeded growth expectations. India and the U.K. recorded significant pickups in economic growth. Eurozone showed modest recovery in growth. However, this was offset by Japan struggling to strengthen its weak recovery, further slowdown in China, Russian and Brazilian economies faltering. Weaker-than- expected growth has been reflected in falling oil prices, which in turn have pushed inflation rates lower. Central banks have responded with a new wave of stimulus measures. The Reserve Bank of India''s (RBI] inflation focus, strong government mandate, over and above the benign global commodity prices have led to improvement in India''s economic fundamentals.

India''s macroeconomic fundamentals have improved in 2014-15. The annual growth rate of the Indian economy is estimated to have increased to 7.4% in 2014-15 as compared to 6.9% in the fiscal year 2013-14. The growth in 2014-15 is largely due to domestic demand. The growth in the exports is projected to be only 0.9% and the growth rate of imports, around -0.5%. The deceleration in imports owe substantially to the sharp decline in international oil prices. Acceleration in services and manufacturing growth in the face of subdued global demand conditions point to the strengthening of domestic demand. Manufacturing is expected to grow further with the Government of India making it a focus area with the ''Make in India'' initiative. However, agriculture suffered due to poor monsoon. The Gross Value Added (GVA] at basic prices in agriculture is expected to decline from 3.7 per cent in 2013-14, an exceptionally good previous year from the point of view of rainfall, to 1.1 per cent in 2014-15. Inflation has declined by over 6 percentage points since late 2013. Current Account Deficit came down from a peak of 6.7% of GDP (in Q3, 2012-13] to an estimated 1% in 2014-15. The average Wholesale Price Index inflation declined in 2014-15 to 3.5% (April-December] vis-a-vis 8.9% in 2013-14. Average retail inflation moderated to 6.3% in 2014-15 (April-December] from 9.5% in 2013-14.

With easing of inflationary conditions, the RBI signalled softening of the monetary policy stance by cutting policy repo rates by 25 bps in January and 25 bps in February to 7.5%. RBI also reduced the Statutory Liquidity Ratio by 50 bps to 21 .5% of Net Demand and Time Liabilities (NDTL]. RBI decided to infuse liquidity to banks on weekends through MSF operations. Liquidity conditions are expected to be comfortable in the coming year. These conditions should augur well for a reinvigoration of private consumption demand. This coupled with a stable government, thrust on rural infrastructure and reforms, it is expected that India''s growth will be strong.

The Company has maintained its leadership position for vehicles and tractors in the rural and semi-urban markets. Despite unfavourable monsoons affecting the tractor segment, the Company maintained a healthy growth of business backed by growth in the overall auto industry. All vehicle categories were in the positive territory except for commercial vehicles, which are gradually moving towards positive territory.

Source for global growth rates:

1. http://www.imf.org/external/ pubs/ft/weo/2015/ update/01/info.htm

2. http://www.kpmg.com/IN/en/ services/Tax/FlashNews/IES- 2014-15.pdf

3. http://rbi.org.in FINANCE

During the year under review, the Reserve Bank of India (RBI) remained focused on keeping the economy on a disinflationary glide path and targeted to hit 8% Consumer Price Index (CPI) inflation by January 2015 and 6 % by January 2016. The RBI continued its stance against inflation by holding the policy rates for the first nine months of the Fiscal Year 2014-15, while allowing the effects of past monetary policy tightening to work to bring down inflation. However, at the same time, RBI through active liquidity management operations ensured that Liquidity conditions remained broadly stable and it continued to provide liquidity through overnight and term repos. RBI remained committed to provide liquidity/credit to the productive sectors, and hence reduced the Statutory Liquidity Ratio (SLR) by 1 50 basis points (bps) during the year. With softening of international commodity prices, particularly crude oil, CPI decelerated sharply in second half of the year from September 2014, which allowed the RBI to cut the policy (Repo) rates by 50 bps during the last quarter of the year. The actions of RBI resulted in sovereign and corporate bond yields declining by 80 bps and more in the year. However, despite a generalized fall in the cost of funds, banks did not transmit that by reducing their base rates. Liquidity conditions remained in a deficit but stable mode throughout the year. However, your Company was able to take advantage of reduction in interest rates by devising appropriate borrowing strategies and ensuring that prudent Asset Liability Management Guidelines are adhered to.

During the year under review, your Company continued with its diverse methods of sourcing funds in addition to regular borrowings like Secured and Unsecured Debentures, Term Loans, Commercial Papers, etc., and maintained prudential Asset/ Liability match throughout the year. Your Company sourced long term debentures and loans from banks and other institutions at attractive rates.

Your Company also issued Subordinated Debt amounting to Rs. 21 5 Crores and successfully completed five at par securitisation transactions aggregating to Rs. 722.3 Crores.

During the year, your Company actively participated in a number of investor meets both in India and abroad organised by reputed Global and Domestic Broking Houses. Your Company also periodically conducted analysts'' meets and conference calls to communicate details of performance, important developments and exchange of information.

CAPITAL ADEQUACY

As on 31 st March, 2015, the Capital to Risk Assets Ratio (CRAR) of your Company was 18.3%, which is well above 1 5.0% CRAR prescribed by the RBI.

RBI GUIDELINES

The Company has complied with all the applicable regulations of the Reserve Bank of India (RBI). As a prudent practice, your Company makes accelerated provisioning for Non-Performing Assets (NPAs) than that required by RBI for NBFCs. Your Company continues to make a general provision at 0.40% on the standard assets outstanding as against 0.25% mandated by the RBI.

CREDIT RATING

During the year under review, India Ratings & Research Private Limited, which is part of Fitch Group, upgraded the rating of the Company''s National Long-term instrument and Lower Tier II Subordinated Debt programme to ''IND AAA/Stable'' from ''IND AA /Stable''.

During the year under review, CARE Ratings, has assigned the ''CARE AAA'' rating to the Company''s Long-term Debt instruments and Lower Tier II Subordinated Debt programme.

Brickwork Ratings India Private Limited has, during the year, upgraded the rating of the Company''s Long-term Subordinated Debt Issue to ''BWR AAA/Stable'' from ''BWR AA /Positive''.

The ''AAA'' ratings denote the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risks.

During the year under review, CRISIL Limited [CRISIL], has reaffirmed the rating to the Company''s Long- term Debt Instruments and Bank Facilities as ''CRISIL AA / Stable'' and the Company''s Fixed Deposit Programme as ''FAAA/Stable'', respectively. The ''AA /Stable'' rating indicates a high degree of safety with regard to timely payment of financial obligations. The rating on the Company''s Short-term Debt and Bank Loans has been reaffirmed at ''CRISIL A1 '' which is the highest level of rating.

ACHIEVEMENTS

During the year under review, your Company was awarded the ''Golden Peacock HR Excellence'' for 2014, the Golden Peacock National Training Award, CII National HR Excellence Award, CSR Award by Indian Development Foundation, and the BFSI Award for CSR, Health Care and Combating Diseases category.

Your Company has won three awards in the "IT-NEXT 100 CIOs" for the third year in a row as well as topped the charts by winning the highest number of PRCI (Public Relations Council of India] Awards in twelve categories. Your Company was also awarded the LACP Awards for its Annual Report for the financial year 2013-14, IDC Insights Award for Excellence in Innovation, the Financial Inclusion & Payment Systems (FIPS] Award 2014 and the RMAI - Flame Awards 2014.

The Company''s IS020000:2011 certification of Information Technology has been confirmed and extended till 11th April, 2017. Your Company has also been included in the RobecoSAM Sustainability Yearbook 2015.

FIXED DEPOSITS AND LOANS/ ADVANCES

As on 31st March, 2015, your Company has mobilized funds from Fixed Deposits to the tune of Rs. 4,680 Crores, with an investor base of over 1,68,306 investors.

Your Company has initiated several measures towards improvement of service levels in sync with the requirements of the Fixed Deposit holders. As a customer-centric process, the Company communicates various intimations via SMS, e-mails, etc., to its investors. During the year under review the Company has started sending E-receipts (FDR E-receipts], pre-printed Forms 15G and 15H with barcode, bulk intimation letters, etc., on the customers'' e-mail ID registered with the Company. Further, in order to encourage investments by small investors, your Company has also introduced Micro Deposits (under its Cumulative Scheme] with a minimum investment amount of Rs. 5,000 and upto a maximum investment amount of Rs.9,000 having a tenure of 12 months to 60 months.

As at 31st March, 2015, 987 deposits amounting to Rs. 4.9 Crores had matured for payment and remained unclaimed. The unclaimed deposits have since reduced to 823 deposits amounting to Rs. 4.0 Crores.

Your Company being a Non-Banking Financial Company, the disclosures required as per Rule 8 (5](v] and (vi] of the Companies (Accounts] Rules, 2014 read with Sections 73 and 74 of the Companies Act, 2013, are not applicable to it.

The particulars of loans/advances and investment in its own shares by listed companies, their subsidiaries, associates, etc., required to be disclosed in the Annual Accounts of the Company pursuant to Clause 32 of the Listing Agreement are furnished separately.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS IN SECURITIES

Pursuant to section 186 (11] of the Companies Act, 2013 (''the Act''], the provisions of section 186(4] of the Act requiring disclosure in the financial statement of the full particulars of the loans made and guarantees given or securities provided by a Non-Banking Financial Company in the ordinary course of its business and the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient of the loan or guarantee or security are exempted from disclosure in the Annual Report.

Further, pursuant to the provisions of Section 186 (4] of the Act, the details of investments made by the Company are given in the Notes to the Financial Statement.

SUSTAINABILITY INITIATIVES

Your Company continues to protect and sustain the rural livelihoods through a sustainable business model. The business model aims at transforming rural lives and driving positive change in the community. Your Company has been reporting on Triple Bottom Line Performance;

i.e., People, Profit and Planet since the Financial Year 2008-09 through the Mahindra Group Sustainability Report.

During the Financial Year 2014-15, your Company released its second standalone Sustainability Report for the previous Financial Year 2013- 14. This Report portrays a balanced approach towards economic activity, environmental responses and social progress. This Report is externally assured and in line with international reporting standards of Global Reporting Initiative (GRI] G3.1 Guidelines. The theme of the Report is ''Co-Creating Opportunities Empowering Lives'' and the same has been hosted on the Company''s website.

During the year under review, your Company continued with its focus on sustainability awareness for employees, vendors and customers and took various initiatives in this direction. Your Company made proactive efforts to fight against global warming through Project ''Mahindra Hariyali'', by planting more than 78,000 saplings across the country. Various initiatives were also taken for energy, paper and e-waste management.

In addition to this, your Company continues to report on Carbon Disclosure Project (CDP] from the Financial Year 2011-1 2. CDP seeks information on carbon emissions disclosures from the world''s largest companies and focuses on how companies are geared up, to deal with the challenges of climate change in a carbon constrained economy. During the year under review, your Company also became part of CDP''s Carbon Disclosure Leadership

Index [CDLI] 2014, acknowledging the Company''s efforts for climate change mitigation.

Your Company has been listed on the Dow Jones Sustainability Index (DJSI] Emerging Market Trends for the second consecutive year. To be incorporated in the DJSI, companies are assessed and selected based on their long term Environmental Social Governance (ESG] asset management plans.

Your Company was also included in the ''RobecoSAM Sustainability Yearbook'', which lists the world''s most sustainable companies in each industry as determined by their score in RobecoSAM''s annual Corporate Sustainability Assessment (CSA]. Your Company is the first and only Indian Company from amongst the Banks and Financial Services Companies in India to have made it to this list.

CORPORATE SOCIAL RESPONSIBILITY

Through its various Corporate Social Responsibility ("CSR"] initiatives, the Mahindra Group is enabling entire communities to ''RISE''. With a vision of transforming the lives of youth from socially weaker and economically disadvantaged sections of society, the Mahindra Group is committed to ''building possibilities'' to enable them to ''RISE'' above their limiting circumstances by innovatively supporting them through programs in the domains of education, health and environment.

The Company has duly constituted a CSR Committee in accordance with section 135 of the Companies Act, 2013 to assist the Board and the Company in fulfilling the corporate social responsibility objectives of the Company. The CSR Committee presently comprises Mr. Bharat Doshi (Chairman], Mr. Piyush Mankad, Mr. Uday Y. Phadke and Mr. Ramesh Iyer.

During the year under review, your Company organised a nationwide Blood Donation Drive, Health check- up camps and visits to Orphanages/ Differently-abled Homes/Old-age homes, to re-affirm its pledge to the society. The ''Lifeline Express'', a hospital on wheels, in association with Impact India Foundation, catered to the medical needs of 4,936 underprivileged people in Motihari (Bihar].

As a part of its commitment to Corporate Social Responsibility, during the year, your Company initiated projects for scholarships for undergraduate and graduate students, vocational training, financial literacy, supporting technology incubators, agri-based livelihood skills and sanitation. The Company also continued its support to Nanhi Kali, the flagship programme of the K.C. Mahindra Education Trust, which aids the education of the disadvantaged girl child.

During the year under review, your Company has spent Rs. 24.9 crores on CSR projects/programs. Your Company is in compliance with the statutory requirements in this regard.

The CSR Policy of the Company is hosted on the Company''s website at the link http://www. mahindrafinance.com/csr.aspx and a brief outline of the CSR Policy and the CSR initiatives undertaken by the Company during the year as per Annexure prescribed in the Companies (Corporate Social Responsibility Policy] Rules, 2014 have been appended as Annexure II to this Report.

EXTRACT OF ANNUAL RETURN

Pursuant to sub-section 3(a] of Section 1 34 and sub-section (3] of Section 92 of the Companies Act, 2013, read with Rule 12 of the Companies (Management and Administration] Rules, 2014, an extract of the Annual Return as at 31st March, 2015 forms part of this Report and is appended herewith as Annexure III.

BOARD MEETINGS AND ANNUAL GENERAL MEETING

The calendar of the Board/ Committee Meetings and the Annual General Meeting are circulated to the Directors in advance to enable them to plan their schedule for effective participation at the respective meetings. Additional Board Meetings are convened by giving appropriate notice to address business exigencies. At times certain decisions are taken by the Board/Committee through circular resolutions.

The Board met seven times in the financial year 2014-15 viz., on 23rd April, 2014, 24th July, 2014, 22nd October, 2014, 16th December, 2014, 16th January, 2015,

17th January, 2015 and 20th March, 2015. The gap between two Meetings did not exceed one hundred and twenty days. The 24th Annual General Meeting ("AGM"] of the Company was held on 24th July,

2014.

Detailed information on the meetings of the Board, its Committees and the AGM is included in the Report on Corporate Governance, which forms part of this Annual Report.

MEETING OF INDEPENDENT DIRECTORS

The Independent Directors met once during the year under review. The Meeting was conducted in an informal manner without the presence of the Chairman, the Managing Director, the Non-Executive Non-Independent Directors and the Chief Financial Officer.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company has various committees which have been constituted as a part of the good corporate governance practices and the same are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

Your Company has an adequately qualified and experienced Audit Committee with Mr. Dhananjay Mungale as the Chairman and Mr. M. G. Bhide, Mr. Uday Y. Phadke, Ms. Rama Bijapurkar, Mr. Piyush Mankad, Mr. C.B. Bhave and Mr. V. S. Parthasarathy as Members. The recommendations of the Audit Committee were duly approved and accepted by the Board during the year under review.

The other Committees of the Board are :

i) Nomination and Remuneration Committee

ii) Stakeholders Relationship Committee

iii) Corporate Social Responsibility Committee

iv) Risk Management Committee

v) Asset Liability Committee

vi) Strategy Committee for Acquisitions

The details with respect to the composition, powers, roles, terms of reference, Meetings held and attendance of the Directors at such Meetings of the relevant Committees are given in detail in the Report on Corporate Governance of the Company which forms part of this Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL Directors

The Members of the Company at the Annual General Meeting held on 24th July, 2014 had appointed Mr. Piyush Mankad, Mr. M. G. Bhide, Mr. Dhananjay Mungale and Ms. Rama Bijapurkar as Independent Directors for a period of five consecutive years commencing from 24th July, 2014.

Pursuant to the provisions of section 152 of the Companies Act, 2013 (''the Act''), Mr. Uday Y. Phadke, Non- Executive Non-Independent Director of the Company retires by rotation at the forthcoming Annual General Meeting scheduled to be held on 24th July, 2015. Mr. Phadke has expressed his desire not to seek re- appointment. It is proposed not to fill up the vacancy thereby caused.

Mr. Uday Y. Phadke joined the Board of Directors of the Company in May 1999. He was elevated as the Vice-Chairman in April 2008. While continuing as a Member of the Board of Directors Mr. Phadke stepped down as the Vice-Chairman in October 2011.

The Board acknowledged Mr. Phadke''s contribution to the Company and placed on record its deep appreciation of the invaluable counsel rendered by him to the Company and his immense contribution in guiding the management during his tenure as Vice-Chairman and as a Director of the Company.

On the recommendation of the Nomination and Remuneration Committee, the Board at its adjourned Meeting held after the Annual General Meeting on 24th July, 2014 had appointed Mr. V. S. Parthasarathy as an Additional Director on the Board of Directors of the Company. Mr. Parthasarathy holds office up to the date of the Annual General Meeting of the Members to be held on 24th July, 2015.

The Company has received a notice from a Member under section 160 of the Act, signifying his intention to propose Mr. V. S. Parthasarathy as a candidate for the office of Director of the Company at the forthcoming Annual General Meeting.

On the recommendation of the Nomination and Remuneration Committee and the Board of Directors, Mr. C. B. Bhave has been appointed as an Independent Director of the Company for a period of five consecutive years commencing from 3rd February, 2015, by the Shareholders by means of a Postal Ballot voting process.

None of the Independent Directors are due for re-appointment.

Key Managerial Personnel

Mr. Ramesh Iyer, Managing Director, Mr. V. Ravi, Chief Financial Officer and Ms. Arnavaz M. Pardiwala, Company Secretary of the Company are the Key Managerial Personnel of the Company as per the provisions of the Companies Act, 2013. Their appointment as Key Managerial Personnel have been duly formalised pursuant to section 203 of the Companies Act, 2013, which came into effect from 1st April, 2014.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors of the Company confirming that they fulfill the criteria of independence as prescribed under sub-section (6) of section 149 of the Companies Act, 201 3 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, (''the Act'') your Directors confirm that:

i. In the preparation of the annual accounts for financial year ended 31st March, 2015, the applicable accounting standards have been followed and there are no material departures in adoption of these standards;

ii. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at 31st March, 2015 and of the profit of the Company for the year ended on that date.

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. The Directors have prepared the annual accounts for financial year ended 31st March, 2015 on a ''going concern'' basis.

v. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and have been operating efficiently.

vi. The Directors have devised proper systems to ensure compliance with provisions of all applicable laws and that such systems were adequate and operating effectively.

PERFORMANCE EVALUATION OF THE BOARD

The Companies Act, 2013 and revised Clause 49 of the Listing Agreement entered into with the Stock Exchanges stipulates the evaluation of the performance of the Board, its Committees, Individual Directors and the Chairperson.

The Company has formulated a Policy for performance evaluation of the Independent Directors, the Board, its Committees and other individual Directors which includes criteria for performance evaluation of the Non-Executive Directors and Executive Directors.

The evaluation framework for assessing the performance of Directors comprises of various key areas such as attendance at Board

and Committee Meetings, quality of contribution to Board discussions and decisions, strategic insights or inputs regarding future growth of the Company and its performance, ability to challenge views in a constructive manner, knowledge acquired with regard to the Company''s business/ activities, understanding of industry and global trends, etc.

The evaluation involves self- evaluation by the Board Member and subsequent assessment by the Board of Directors. A member of the Board will not participate in the discussion of his/her evaluation.

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees.

Well-defined and structured questionnaires were prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board''s functioning such as adequacy of the composition of the Board and its Committees, Board culture, areas of responsibility, execution and performance of specific duties, obligations and governance, compliance, oversight of Company''s subsidiaries, etc.

A separate exercise was carried out to evaluate the performance of individual Directors who were evaluated on several parameters such as level of engagement and contribution, independence of judgment safeguarding the interest of the Company and its minority shareholders and knowledge acquired with regard to the Company''s business/activities.

The performance evaluation of the Independent Directors was carried

out by the entire Board excluding the Director being evaluated. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. Qualitative comments and suggestions of Directors were taken into consideration by the Chairman of the Board and the Chairman of the Nomination and Remuneration Committee. The Directors have expressed their satisfaction with the evaluation process.

Familiarisation Programme for Independent Directors

The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are given in the Report on Corporate Governance and the same are also available on the website of the Company at the link: http://www.mahindrafinance.com/ pdf/familiarisation-programme-for- IDs.pdf.

Policies on Appointment of Directors and Remuneration of Directors, Key Managerial Personnel and Employees

In accordance with the provisions of section 134(3](e] of the Companies Act, 2013 ("the Act"] read with sections 178(2] of the Act and Clause 49 of the Listing Agreement, the Company has formulated a Policy on Appointment of Directors and Senior Management and succession planning for orderly succession to the Board and the Senior Management, which inter alia, includes the criteria for determining qualifications, positive attributes and independence of Directors.

The Company has also adopted the Policy on Remuneration of Directors and the Remuneration Policy for Key Managerial Personnel and Employees of the Company in accordance with the provisions of sub-section [4] of section 178, and the same are appended as Annexure IV-A and Annexure IV-B and form part of this Report.

The criteria for determining qualifications, positive attributes and independence of a Director and the Remuneration Policy for Directors, Key Managerial Personnel and other employees have been discussed in detail in the Report on Corporate Governance.

AUDITORS Statutory Auditors

Messrs. B. K. Khare & Co., Chartered Accountants, [ICAI Firm Registration No.105102W] the Statutory Auditors of the Company, hold office till the conclusion of the forthcoming Annual General Meeting [AGM] and are eligible for re-appointment. Pursuant to the provisions of section 139 of the Companies Act, 2013 and the Rules framed thereunder, it is proposed to appoint Messrs. B. K. Khare & Co., as the Statutory Auditors of the Company from the conclusion of the forthcoming AGM till the conclusion of the next AGM.

As required under the provisions of section 139(1) of the Companies Act, 2013 the Company has received a written consent from Messrs. B. K. Khare & Co., Chartered Accountants to their re-appointment and a Certificate, to the effect that their re-appointment, if made, would be in accordance with the Companies Act, 2013 and the Rules framed thereunder and that they satisfy the criteria provided in section 141 of the Companies Act, 2013 read with Rule 4(1) of the Companies (Audit and Auditors) Rules, 2014.

The Auditors'' Report does not contain any qualification, reservation or adverse remark.

Secretarial Auditor

The Board of Directors of the Company has appointed Dr. K. S. Ravichandran, Managing Partner, KSR & Co., Company Secretaries LLP, to conduct the Secretarial Audit of the Company for the Financial Year 2014-15, pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. In accordance with the provisions of sub-section (1) of section 204, the Secretarial Audit Report for the Financial Year 2014-15 is appended to this Report as Annexure V.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts/arrangements/

transactions entered into by the Company during the Financial Year with related parties were in the ordinary course of business and on an arm''s length basis. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the Policy on Related Party Transactions. Pursuant to section 134(3) (h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014, there are no transactions to be reported under Section 188(1) of the Companies Act, 2013. None of the Non-Executive Directors has any pecuniary relationships or transactions vis-a-vis the Company.

The Policy on Related Party Transactions as approved by the Audit Committee and the Board of Directors of the Company is uploaded on the website of the Company and same can be accessed on the web link : http://www.mahindrafinance. com/policies.aspx.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statement relate and the date of this Report.

RISK MANAGEMENT POLICY

Your Company has a comprehensive Risk Management Policy in place and has laid down a well-defined risk management framework to identify, assess and monitor risks and strengthen controls to mitigate risks. Your Company has established procedures to periodically place before the Risk Management Committee and the Board of Directors, the risk assessment and minimisation procedures being followed by the Company and steps taken by it to mitigate these risks.

The development and implementation of Risk Management Policy adopted by the Company is discussed in detail in the Management Discussion and Analysis chapter, which forms part of this Annual Report.

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

The Company promotes ethical behaviour in all its business activities and has established a vigil mechanism for Directors and Employees to report their genuine concerns.

The Vigil Mechanism as envisaged in the Companies Act, 2013 and the Rules prescribed is implemented through the Whistle Blower Policy, to provide for adequate safeguards against victimization of persons who use such mechanism and make provision for direct access to the Chairperson of the Audit Committee.

As per the Whistle Blower Policy implemented by the Company, the Employees are free to report illegal or unethical behaviour, actual or suspected fraud or violation of the Company''s Codes of Conduct or Corporate Governance Policies or any improper activity to the Chairman of the Audit Committee of the Company or Chairman of the Company or the Corporate Governance Cell.

The Whistle Blower Policy provides for protected disclosure and protection to the Whistle Blower. Under the Whistle Blower Policy, the confidentiality of those reporting violation(s) is protected and they are not subject to any discriminatory practices.

The Whistle Blower Policy has been appropriately communicated within the Company and has also been hosted on the website of the Company: http://www.mahindrafinance.com/ pdf/MMFSL_VigilMechanism.pdf. No personnel have been denied access to the Audit Committee.

SUBSIDIARIES, JOINT VENTURE AND ASSOCIATES

A Report on the performance and financial position of each of the subsidiaries and the joint venture company as per the Companies Act, 2013 is provided as Annexure A to the Consolidated Financial Statement and hence not repeated here for the sake of brevity. The policy for determining material subsidiaries as approved may be accessed on the Company''s website at the web link : http://www.mahindrafinance.com/ policies.aspx

Subsidiaries

Mahindra Insurance Brokers Limited

During the year under review, Mahindra Insurance Brokers Limited (MIBL) serviced 1.1 million insurance cases, with a total of 11,37,981 cases for both Life and Non-Life Retail business. The customized Life insurance cover "Mahindra Loan Suraksha" (MLS) declined from 5,09,864 lives covered with a Sum Assured of Rs. 14,393.5 crores in the Financial Year 2013- 14 to 4,59,781 lives covered with a Sum Assured of Rs. 13,515.4 crores in the Financial Year 2014- 15. This primarily was on account of the general economic slowdown witnessed during the year having a cascading impact on the auto- manufacturing and auto financing industry. A substantial portion of MLS though continued to be covered in the rural markets.

MIBL achieved a growth of 22% in Gross Premium facilitated for the Corporate and Retail business lines, increasing from Rs. 825.2 crores in the Financial Year 2013-14 to Rs. 1,002.7 crores in the Financial Year 2014-15 crossing the 1,000 crores mark.

The Total Income of MIBL increased by 14% from Rs. 111.2 crores in the Financial Year 2013-14 to Rs.126.2 crores in the Financial Year 2014-15. The Profit before Tax increased by 2% from Rs. 63.8 crores to Rs. 65.3 crores, and the Profit after Tax increased by 2% from Rs. 42.0 crores to Rs. 42.9 crores during the same period.

Mahindra Rural Housing Finance Limited

Mahindra Rural Housing Finance Limited (MRHFL) has during the year ended 31st March, 2015, disbursed loans aggregating Rs. 989.6 crores (previous year Rs. 630.6 crores) achieving a growth of 57% over the previous year. Profit after tax was 63% higher at Rs. 44.2 crores as compared to Rs. 27.1 crores for the previous year. The outstanding loan portfolio as at 31st March, 2015 stood at Rs. 2,098.3 crores.

MRHFL continued its focus on serving customers in rural India. Majority of the loans disbursed were to customers in villages with an average annual household income of less than Rs. 2 lakhs. During the year under review, around 81,960 families were given home loans (in addition to around 1,81,120 existing families as on 31st March, 2014). MRHFL has been expanding its geographical presence, to provide affordable services for rural households and has also entered the semi-urban market segment.

Mahindra Asset Management Company Private Limited

Mahindra Asset Management Company Private Limited (MAMCPL), the wholly-owned subsidiary of the Company, which will be engaged as an investment manager to the proposed Mahindra Mutual Fund, is currently in the process of obtaining regulatory approval from the Securities and Exchange Board of India. During the year under review, MAMCPL has not commenced any business activities.

Mahindra Trustee Company Private Limited

Mahindra Trustee Company Private Limited (MTCPL), the wholly-owned subsidiary of the Company, which will be engaged as a Trustee to the proposed Mahindra Mutual Fund, is currently in the process of obtaining regulatory approval from the Securities and Exchange Board of India. During the year under review, MTCPL has not commenced any business activities.

Amalgamation of Mahindra Business & Consulting Services Private Limited ("MBCSPL") with the Company

Mahindra Business & Consulting Services Private Limited (MBCSPL), a wholly-owned subsidiary of your Company was engaged in the business of providing staffing services to the Mahindra group companies and had no business operations as on the date of announcement of the Scheme of Amalgamation of MBCSPL with the

Company and their Shareholders and Creditors.

In order to have a simplified corporate structure, rationalisation of administrative, operative and marketing costs and to enable cost saving and optimum utilization of valuable resources leading to higher operational efficiency, a Scheme of Amalgamation of MBCSPL with the Company and their Shareholders and Creditors was announced. The same was approved by the Public Shareholders by means of a Postal Ballot voting process (including e-voting) on 13th January, 2015.

The Scheme has been approved by the Honourable High Court of Judicature at Bombay on 20th March, 2015 and the same has been made effective from 18th April, 201 5, by filing the certified copy of the Order with the Registrar of Companies. The appointed date of the Scheme is 1st April, 2014.

Joint Venture Mahindra Finance USA LLC.

The joint venture company''s disbursement registered a growth of 22.42% to USD 5,337.09 Lacs for the year ended 31st March, 2015 as compared to USD 4,359.69 Lacs for the previous year. Income grew by 36.35% to USD 220.43 Lacs for the year ended 31st March, 2015 as compared to USD 161.66 Lacs for the previous year. Profit Before Tax was 41.30% higher at USD 70.99 Lacs as compared to USD 50.24 Lacs for the previous year. Profit After Tax grew at a healthy rate of 38.59% to USD 45.47 Lacs as compared to USD 32.81 Lacs in the previous year.

Names of companies which have become or ceased to be subsidiaries, joint ventures or associate companies during the year

During the year under review, no company has become a subsidiary of the Company.

Consequent upon the amalgamation of Mahindra Business & Consulting Services Private Limited (MBCSPL) with the Company, MBCSPL has ceased to be a subsidiary of the Company.

Further, no company has become or ceased to be a joint venture or associate during the Financial Year 2014-15.

The Company shall provide the copy of the annual accounts of its subsidiary companies and the related information to the Members of the Company on their request. The annual accounts of the subsidiary companies will also be kept open for inspection by any Members at the Registered Office of the Company and also at the Registered Office of the respective subsidiary companies during working hours upto the date of the Annual General Meeting. The Annual Reports of the subsidiaries will also be available on your Company''s website at the link : http://www.mahindrafinance.com/ annual-reports.aspx

Material Non-Listed Indian Subsidiary

Pursuant to Clause 49 of the Listing Agreement entered into by the Company with the Stock Exchanges, if the turnover or net worth (i.e. paid- up capital and free reserves) of any unlisted Indian subsidiary company exceeds 20% of the consolidated turnover or net worth respectively of the listed holding company and its subsidiaries in the immediately preceding accounting year; that subsidiary would be termed as a ''Material Non-Listed Indian Subsidiary''.

In view of the above, there is no material non-listed Indian subsidiary of your Company for the Financial Year 2014-15.

Consolidated Financial Statements

The Consolidated Financial Statements of the Company and its four subsidiaries viz. Mahindra Insurance Brokers Limited, Mahindra Rural Housing Finance Limited, Mahindra Asset Management Company Private Limited and Mahindra Trustee Company Private Limited prepared in accordance with Accounting Standard AS 21 prescribed by The Institute of Chartered Accountants of India, form part of this Annual Report. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies and its joint venture viz. Mahindra Finance USA LLC.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operations in future There are no significant and material orders passed by the regulators or courts or tribunals that would impact the going concern status of the Company and its future operations.

Details in respect of adequacy of internal financial controls with reference to the Financial Statements

Your Company has in place adequate internal financial controls with reference to financial statements, commensurate with the size, scale and complexity of its operations. Review of the internal financial controls environment of the Company was undertaken during the year which covered verification of entity level control, process level control and IT controls, identification, assessment and definition of key business processes and analysis of risk control matrices, etc. Reasonable Financial Controls are operative for all the business activities of the Company and no material weakness in the design or operation of any control was observed.

Mr. Ramesh Iyer, Managing Director of the Company does not receive any remuneration or commission from any of the subsidiaries of the Company. However, Mr. Iyer has been granted stock options under the Employees'' Stock Option Scheme of the holding Company, Mahindra & Mahindra Limited.

20 employees were in receipt of remuneration of Rs.60 lakhs per annum or more amounting to Rs. 23.66 crores for the Financial Year ended 31st March, 2015.

In terms of the provisions of section 197 of the Act read with Rules 5 (2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 details in respect of employees of the Company employed during the year and in receipt of remuneration for the year not less than sixty lakh rupees or employed for a part of the financial year and in receipt of remuneration not less than five lakh rupees per month, is provided in Annexure VI.

None of the employees listed in the said Annexure is a relative of any Director of the Company.

None of the employees holds either by himself or along with his spouse or dependent children, more than two per cent of the Equity Shares of the Company.

Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company is an equal opportunity employer and is committed to ensuring that the work environment at all its locations is conducive to fair, safe and harmonious relations

between employees. It strongly believes in upholding the dignity of all its employees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictly prohibited.

The Company has in place an appropriate Policy in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, to prevent sexual harassment of its employees. All employees are covered under this Policy. The Company ensures that no employee is disadvantaged by way of gender discrimination.

During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder.

Conservation of Energy,

Technology Absorption, and Foreign Exchange Earnings and Outgo

The particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under sub-section (3) (m) of section 134 of the Companies Act, 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014 are given as under :

(A) Conservation of Energy

(i) The steps taken or impact on conservation of energy :

The operations of your Company are not energy intensive. However, adequate measures have been initiated to reduce energy consumption.

(ii) The steps taken by the Company for utilizing alternate sources of energy:

During the year the Company has spent Rs.0.16 crores towards implementing solar power system in various branches.

(iii) The capital investment on energy conservation equipments: Nil

(B) Technology Absorption

(i) The efforts made towards technology absorption : Not Applicable.

(ii) The benefits derived like product improvement, cost reduction, product development or import substitution : Not Applicable.

(iii) i n case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year): Not Applicable.

(a) Details of Technology Imported;

(b) Year of Import;

(c) Whether the Technology has been fully absorbed;

(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof.

(iv) Your Company has not incurred any expenditure on Research and Development during the year under review.

(C) Foreign Exchange Earnings and Outgo

The information on foreign exchange outgo is furnished in the Notes to the Accounts. There were no foreign exchange earnings during the year.

For and on behalf of the Board

Bharat Doshi Chairman

---

Mar 31, 2015

Dear Members,

The Directors present their Twenty-Eighth Annual Report together with the audited accounts of your Company for the year ended 31st March, 2015.

FINANCIAL RESULTS (STANDALONE)

(Rs. Million)

For the year ended 31st March 2015 2014

Income 192,872 163,654

Profit before Interest, Depreciation, exceptional items and tax 33,511 36,316

Interest (86) (868)

Depreciation (4,733) (4,270)

Profit before exceptional items and tax 28,692 31,178

Exceptional items 613 1,200

Profit Before Tax 29,305 32,378

Provision for taxation (6,743) (5,523)

Profit after tax 22,562 26,855

Balance brought forward from previous year 43,856 27,495

Adjustments on account of Amalgamation 1,140 (2,396)

Profit available for appropriation 67,558 51,954

Transfer from Debenture Redemption Reserve 2,972 2,366

Final Dividend (28)* (1)

Tax on final dividend

Dividend (Proposed) (5,765) (4,669)

Tax on dividend (1,173) (794)

Transfer to General Reserve - (5,000)

Balance carried forward 63,559 43,856

* In respect of equity shares issued pursuant to exercise of Stock Options after 31st March 2014 but before book closure date, the Company paid dividend of Rs. 27.9 Million for the year 2013-14 and tax on dividend thereto of Rs. 4.7 Million as approved by the shareholders at the Annual General Meeting held on August 1, 2014.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 6/- per Equity Share (120%), payable to those Shareholders whose names appear in the Register of Members as on the Book Closure Date.

SHARE CAPITAL

During the year under review, your Company allotted 4,259,011 equity shares of face value of Rs. 10/- each to the shareholders of erstwhile Mahindra Engineering Services Limited (''MESL'') upon consummation of the amalgamation of MESL with your Company. Further, your Company allotted 2,572,284 equity shares on the exercise of stock options under various Employee Stock Option Plans.

Your Board of Directors recommended for issue of Bonus shares in the ratio of 1:1 and sub-division of

Equity Shares of Rs. 10/- each into two Equity Shares of Rs. 5/- each which was approved by the Shareholders through postal ballot and e-voting on 10th March, 2015. Accordingly, bonus shares in the ratio of 1:1 were allotted to the members who held the equity shares on the Record Date i.e., March 20, 2015 by capitalization of balance in the Free Reserves amounting to Rs. 2,401,615,770. Further, the Equity Shares of face value of Rs. 10/- each were sub-divided into two Equity Shares of face value of Rs. 5/- each by way of corporate action to the shareholders who held the shares on the Record Date mentioned hereinabove.

Consequently the issued, subscribed and paid-up equity share capital has increased from Rs. 2,401.6 Million divided into 240,161,577 equity shares of Rs. 10/- each to Rs. 4,803.2 Million divided into 960,646,308 equity shares of Rs. 5/- each.

BUSINESS PERFORMANCE / FINANCIAL OVERVIEW

The Company offers a full range of IT services and industry specific solutions to its clients. The Company has partnered with several Fortune 100 companies to deliver outstanding solutions across industries. The Company offers a bouquet of services which includes Telecom Services, Consulting, Application Outsourcing, Infrastructure Outsourcing, Engineering Services, BPO, Platform Solutions and Mobile Value Added Services. With an impeccable track record of delivery and strong alliances with leading technology and product vendors, the Company serves 767 customers, including several of the Fortune 500 Companies. Your Company has 85 delivery centers and 49 sales offices spread over India & abroad.

In the fiscal year 2014-15 the Company''s consolidated revenues increased to Rs. 226,213 Million from Rs. 188,314 Million in the previous year, a growth of 20.1%. The growth during the year was led by acquisitions as well as organic growth. The geographic split of revenue was balanced with 47% share of Americas, 31% share of Europe, and 22% from Rest of the World.

The consolidated Profit before Interest, Depreciation, Tax and Exceptional Items was at Rs. 42,594 Million, against Rs. 42,968 Million in the previous year. The consolidated Profit after Tax, amounted to Rs. 26,277 Million as against Rs. 30,288 Million in the previous year.

The number of customers increased from 629 in the previous year to 767 at the end of fiscal year 2014-15.

In emerging areas of Big Data, Mobility Network, Cloud, Security, Platforms and Engineering Services, Tech Mahindra is well placed with its breadth of service offerings. Your company has also progressed well in building intellectual property through various Products & Services and Platforms. Your Company is committed towards building a synergistic relationship with its partners to enable, deliver, complete and customized solutions to customers. During the year, Tech Mahindra has developed an integrated program ''BROP'' (Building Relationships and Opportunities and Projects) program, which helps partner organizations and customers to succeed.

In summary, Tech Mahindra is well positioned in the markets it serves with a broad range of service offerings and a diversified customer base.

MERGER

During the year under review, the Scheme of Amalgamation and Arrangement between your Company and Mahindra Engineering Services Limited (MESL) got consummated on December 8, 2014. Subsequent to the Scheme of Amalgamation & Arrangement between MESL and Tech Mahindra Limited becoming effective, the Board of Directors fixed December 17, 2014 as the Record Date for MESL Shareholders for issue of Tech Mahindra Shares in the approved share swap ratio. This resulted in the issued capital of your Company going up from 236 Million shares to 240 Million shares. The shares swap got completed and the Stock Exchanges accorded their approval for trading of the new shares effective January 8, 2015.

ACQUISITIONS

Lightbridge Communications Corporation

Your Company acquired 100% shareholding of Lightbridge Communications Corporation (LCC), a Global Network service leader, through its wholly owned subsidiary Tech Mahindra Americas Inc. USA effective January 2, 2015. LCC is one of the world''s largest independent Global providers of Network Engineering Services to the Telecommunication industry.

The acquisition gives your Company an opportunity to offer full range of network services and integrated infrastructure solutions to both communication service providers as well as to the ecosystem of partners who cater to the communication sector. LCC has presence in over 50 countries. LCC has built 350 networks and designed more than 350,000 cell sites for over 400 customers worldwide.

Sofgen Holdings Limited

Your Company acquired 100% shareholding of SOFGEN Holdings Limited (SOFGEN), a niche consulting and Services Company with worldwide presence specializing in Private, Wealth, Commercial and Retail Banking solutions, with effect from March 13, 2015.

The acquisition gives your Company an opportunity to enhance expertise and to implement modernized Core Banking & Transformation services capabilities.

FixStream Networks Inc

The Company on 18th April, 2014 entered into an agreement to acquire majority stake (75%) in

FixStream Networks Inc (FSNI), a technology startup Company, and it has completed the acquisition on April 30, 2014.

Tech Mahindra Business Services GmbH

Tech Mahindra GmbH, a wholly owned subsidiary of the Company in Germany, entered into a share and asset purchase agreement with BASF Business Services Holding GmbH in February, 2014 for acquiring 100% stake in the equity of BASF Business Services holding GmbH (BASF). Upon payment of the consideration on July 29, 2014 the shares were transferred in the name of Tech Mahindra GmbH and its nominees were appointed on BASF''s Board of Directors. Subsequently, BASF''s name was changed in August 2014 to Tech Mahindra Business Services GmbH.

Complex IT

As you know your Company had acquired 51% stake in Complex IT one of the largest SAP consulting providers in Brazil through its wholly owned subsidiary Tech Mahindra Servicos De Informatica LTDA in May 2013. During the year under review, the balance stake of 49% in Complex IT Services was acquired. As at 31st March, 2015, Complex IT Services has become a 100% subsidiary of Tech Mahindra Servicos De Informatica LTDA, a wholly owned subsidiary of your Company in Brazil.

DETAILS OF SUBSIDIARY/JOINT VENTURES/ ASSOCIATE COMPANIES

As on 31st March, 2015, your Company has 149 Subsidiaries which includes 109 step-down subsidiaries and 4 Associate Companies. There has not been any material change in the nature of the business of the subsidiaries. As required under the Listing Agreements with the Stock Exchanges and the Companies Act, 2013, the Consolidated Financial Statements of your Company and all its subsidiaries are provided in this Annual Report. The Consolidated Financial Statements have been prepared in accordance with Accounting Standards AS 21, AS 23 and AS 27 issued by The Institute of Chartered Accountants of India and shown the financial resources, assets, liabilities, income, profits and other details of your Company and its subsidiaries and share in associate company as a single entity, after elimination of minority interest.

The performance and financial position of each of the subsidiaries, associate companies and joint venture companies included in the consolidated financial statement is provided in accordance with the provisions of Section 129 read with Rule 5 of the Companies (Accounts) Rules, 2014 as a separate statement annexed to the Notes on Accounts containing the salient features of the financial statement of Company''s subsidiaries/joint ventures or associate companies in Form AOC - 1.

Pursuant to Rule 8(5)(iv) of the Companies (Accounts) Rules, 2014, the names of the companies which have become or ceased to be the subsidiaries, joint ventures or associate companies during the year are provided in "Annexure I" to this report.

During the year the Board of Directors has formulated a policy for determining Material Subsidiaries. The policy is disclosed on the company''s website and is accessible on http://www.techmahindra.com/investors/ corporate governance.aspx

HUMAN RESOURCES

The ever dynamic technological landscape of today''s world makes it imperative for us to focus on continuously shaping our talent for tomorrow and delivering value to our customers through differentiated service offerings. Associates'' career development is therefore a key focus area at Tech Mahindra. We have an effective performance and career management process, 360 degree learning and focused leadership development programs to help associates grow in their careers. Our people practices have received recognition at national and global level, with ASTD (American Society for Training and Development) ranking us amongst the Top 5 organizations, globally, for learning practices as also, our Performance and Career Management practices being recognised amongst the Best Talent Management practices in Asia by L&OD Roundtable for the year 2014. We continued to focus on recognizing, rewarding and enabling higher performance amongst our Associates through various Recognition and Reward Mechanism.

The Company endeavours to create an environment that is encouraging for the associates to innovate and collaborate to leverage the collective knowledge of Tech Mighties. We provide a host of platforms to nurture innovation such as IRIS and the Intrapreneurship Program where associates have the opportunity to pursue their innovative ideas and even commercialize them with support from mentors and resources from within Tech Mahindra.

QUALITY

Your Company continues - to focus on quality and strives to exceed customer expectations at all times. The Company has been successfully assessed at CMMI Dev & SVC V1.3 L5, TMMi, TL9K, ISO 9001:2008, ISO 20000:2012, ISO 27001: 2005, AS9100 (Standard for Aerospace domain - scope of certification limited to the aerospace business within TechM). In addition to these, your Company has undergone SA800 certification, a Social Accountability Standard, for applicable accounts as per the contractual obligations and also maintains its commitment to health, safety and environment by continually improving its processes in accordance with ISO 14001 and OHSAS 18001 standards.

Your Company is also certified on ISO 22301:2012 (Societal Security) and has a comprehensive Business Continuity and Disaster Recovery framework, to prevent potential business disruptions in the event of any disaster. It can quickly resume services to customer''s acceptable service levels. Automated Service Desk with SLAs for enabling business and Vulnerability Assessment and Penetration Testing Lab for secured corporate network operations are highlights showcasing information security posture of the Organization.

These certifications are testimony of the robustness of business processes and at large the quality culture imbibed in the organization.

Your Company has also introduced high maturity practices to measure the effectiveness of the processes and manages them quantitatively. One such initiative is "Execution Excellence Index" focusing on achieving high project maturity, improved tools usage and standardization, knowledge management and performance on key business metrics, in order to strengthen further the Business Excellence in what the Company deliver to the customers. Your Company is putting all the initiatives in place in order to ensure that it delivers as stated in Quality Policy.

DIRECTORS

During the year under review there was no change in Directors of your Company.

Pursuant to the provisions of Section 152 (6) (c) of the Companies Act, 2013, Mr. Bharat N. Doshi, Director (DIN: 00012541) is liable to retire by rotation and does not offer himself for reappointment.

Mr. Bharat N. Doshi served on your Board since 6th June, 1997 as a Non - Executive Director. The Board places on record its appreciation for the valuable advice and guidance of Mr. Doshi during his tenure as a Director on the Board.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has devised a policy on evaluation of performance of Board of Directors, Committees and Individual directors. Accordingly, the Chairman of the Nomination and Remuneration Committee obtained from all the board members duly filled in evaluation templates for evaluation of the Board as a whole, evaluation of the committees and peer evaluation. The summary of the evaluation reports were presented to the respective Committees and the Board for their consideration.

Policy on Directors Appointment and Remuneration

The Governance policies laid down by the Board of directors of your company include:

i. Policy on appointment and removal of Directors, Key Managerial Personnel and Senior Management

ii. Policy on remuneration to the Directors, Key Management Personnel and Senior Management and other Employees

The extract of these two policies are provided in "Annexure II".

Training

The Company has laid down a policy on training for Independent Directors, as part of the governance policies. The directors are updated on the regulatory changes, Business strategy and operations by the senior leadership of the Company periodically. Apart from this, during the year under review two external professionals provided orientation on latest trends in Cloud and Digital Businesses.

Key Managerial Personnel (KMPs)

Pursuant to provisions of Section 203 of the Companies

Act, 2013, Mr. Vineet Nayyar, Executive Vice Chairman, Mr. C. P. Gurnani, Managing Director & Chief Executive Officer, Mr. Milind Kulkarni, Chief Financial Officer and Mr. G. Jayaraman, Company Secretary are the Key Managerial Personnel of the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, your Directors, based on the representation received from the Operating Management and after due enquiry, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and, reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit of the Company for the year ended on that date;

iii. proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts have been prepared on a going concern basis;

v. they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

vi. the proper systems to ensure compliance with the provisions of all applicable laws are in place and are adequate and operating effectively.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has internal financial controls which are adequate and were operating effectively. The controls are adequate for ensuring the orderly & efficient conduct of the business, including adherence to the company''s policies, the safe guarding of assets, the prevention & detection of frauds & errors, the accuracy & completeness of accounting records and timely preparation of reliable financial information.

STATUTORY AUDITORS

M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, [ICAI Registration No. 117366W/W-100018] the Auditors of your Company, hold office upto the conclusion of the forthcoming Annual General Meeting of the Company. Pursuant to provisions of Section 139(2) of Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, M/s. Deloitte Haskins & Sells LLP are eligible for appointment as Auditors. Your Company has received a written confirmation from M/s. Deloitte Haskins & Sells LLP, Chartered Accountants to the effect that their appointment, if made, would satisfy the criteria provided in Section 141 of the Companies Act, 2013 for their appointment. The Board recommends the appointment of M/s. Deloitte Haskins & Sells LLP, Chartered Accountants as the Auditors of the Company from the conclusion of the ensuing AGM to the conclusion of the next AGM.

The information and explanations on the qualification contained in the Auditors'' report are provided in detail in the Note 26.3 forming part of the financial statements. Your board opines that no further explanation is required in this regard.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Dr. K. R. Chandratre, Practicing Company Secretary, Pune to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is provided as "Annexure III". There are no qualifications, reservation or adverse remark or disclaimer made in the Secretarial Audit Report.

EXTRACT OF THE ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, the extract of the Annual Return in Form MGT-9 is attached as "Annexure IV".

MANAGERIAL REMUNERATION

Disclosures of the ratio of the remuneration of each director to the median employee''s remuneration and other details as required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided as "Annexure V".

None of the directors who are in receipt of any commission from the Company and Managing Director or Whole-time Director of the Company, shall receive any remuneration or commission from any Subsidiary Company of your Company.

The details of remuneration paid to the Directors including Executive Directors of the Company are given in Form MGT-9 forming part of the Directors Report.

PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Companies Act, 2013 ("the Act") read with Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. However, pursuant to first proviso to Section 136(1) of the Act, this Report is being sent to the Shareholders excluding the above said information. Any shareholder interested in obtaining this Report, may write to the Company Secretary at the Registered Office / Corporate Office of the Company.

Anti Sexual Harassment Policy

Your Company laid down Anti Sexual Harassment policy and it is made available on the website of the Company. The Company has zero tolerance on Sexual Harassment at workplace. During the year under review there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

EMPLOYEE STOCK OPTION PLANS

Details as required under Rule 12 (9) of Companies (Share Capital and Debentures) Rules, 2014 and as required to be provided under the Securities and Exchange Board of India Guidelines as on March 31, 2015 are set out in "Annexure VI" to this Report.

CORPORATE GOVERNANCE

A report on Corporate Governance covering among others details of meetings of the Board and Committees along with a certificate for compliance with the Clause 49 of the Listing Agreement issued by the statutory auditors of the Company, forms part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of your Company''s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

RISK MANAGEMENT

During the year, your Company had constituted a Risk Management Committee and approved detailed framework for Risk Management. The details of Committee and its terms of reference including elements of risk as identified for the Company are set out in the Corporate Governance Report and Management Discussion and Analysis Report (MDA) forming part of the Board''s Report.

ESTABLISHMENT OF VIGIL MECHANISM

Your Company has laid down Whistle Blower Policy covering Vigil Mechanism with protective Clauses for the Whistle Blowers. As part of the Vigil Mechanism a dedicated telephone line and email address are provided. The Whistle Blower Policy is made available on the website of the Company.

DEPOSITS / LOANS & ADVANCES, GUARANTEES OR INVESTMENTS

Your Company has not accepted any deposits from the public during the year under review. The particulars of loans/advances, guarantees and investments under Section 186 of the Companies Act, 2013 and as per Clause 32 of the Listing Agreement are given in the notes forming part of the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All transactions entered into with Related Parties as defined under Section 2(76) of the Companies Act, 2013 and Clause 49(VII) of the Listing Agreement during the financial year were in the ordinary course of business and on an arm''s length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no materially significant transactions with related parties in the financial year which were in conflict with the interest of the Company and requiring compliance of the provisions of revised Clause 49 of the Listing Agreement. Suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes forming part of the Financial Statements.

The Company has formulated a policy on materiality of Related Party Transactions and dealing with Related Party Transactions which has been uploaded on the Company''s website and can be accessed at http://www.techmahindra.com/sites/ResourceCenter/ Brochures/investors/corporategovernence/RPT Policy Amended.pdf

The particulars of related party transactions in prescribed Form AOC - 2 is attached as "Annexure VII".

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are provided in "Annexure VIII" which forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR vision of your Company is "Empowerment through Education."

In compliance with the guidelines prescribed under Section 135 of the Companies Act, 2013, your company constituted a Corporate Social Responsibility (CSR) Committee. Your Board of Directors laid down CSR Policy, covering the Objectives, Focus Areas, Governance Structure and Monitoring & Reporting Framework among others and the policy is available at http://www.techmahindra.com/society/default.aspx.

Your company''s social initiatives are carried out by Tech Mahindra Foundation and Mahindra Educational Institutions.

- TECH MAHINDRA FOUNDATION (TMF)

The Tech Mahindra Foundation, the CSR arm of the Company, established in 2007 as a Section 25 Company, works towards a stated mission: "Educated, skilled and able women and men are a country''s true strength".

During the year under review, Tech Mahindra Foundation expanded its operations to two more locations, upscaling its presence to nine states/ union-territories through ten India Chapters - Bengaluru, Bhubaneswar, Chandigarh, Chennai, Delhi-NCR, Hyderabad, Kolkata, Mumbai, Pune and Visakhapatnam. The Foundation ran 135 high-impact projects with 90 partners, reaching out to 125,000 children and youth across these locations.

School Education

The Foundation''s work in school education focuses upon three thematic areas: school improvement, teacher empowerment and learning enrichment. The key initiatives include:

All Round Improvement in School Education (ARISE):

Tech Mahindra Foundation''s educational initiatives under ARISE are long-term school improvement programmes, run in partnership with local governments and partner organisations. The Foundation has adopted 55 schools across India and is working with 18 partners to turn them around completely into model schools of excellence. ARISE initiatives encompass educational empowerment programmes for children with disabilities.

Shikshaantar:

Shikshaantar, envisioned for creating a difference to education, describes the Foundation''s teacher empowerment and system enhancement programme. Another aspect of Shikshaantar is felicitating outstanding teachers of municipal schools of Delhi through the Foundation''s flagship Shikshak Samman Award programme.

Shiksha Samvardhan:

Shiksha Samwardhan, or the education enrichment programme, is a thematic intervention around learning enhancement initiatives of the Foundation, towards making learning interesting, child-centred and activity-based to reduce cumulative burden of non-comprehension and to promote grade- appropriate competencies.

Employability:

Skills for Market Training (SMART) is the Foundation''s flagship programme in employability. It is built on the vision of an educated, enlightened and employed India, and a belief that educated and skilled youth are the country''s true strength. The programme started with 3 Centres in 2012 and is currently running 65 Centres at 10 locations across India. These include SMART Centres, SMART Centres (training for people with disabilities), SMART-T Centres (training in technical trades) and the SMART Academy. The Academy will closely engage with the industry stalwarts for constant curriculum up- gradation and placement.

During the year under review, your Company trained ~12,000 young women and men under its SMART programme. More than 75-80% of the graduates are placed in jobs upon successful completion of the training, across multiple industries.

- MAHINDRA EDUCATIONAL INSTITUTIONS: TECHNICAL EDUCATION

Your Company''s initiatives in technical education are carried out through Mahindra Educational Institutions (MEI), under which the Foundation has extended infrastructural and operational support to Mahindra Ecole Centrale, a state- of-the-art technical institution in Hyderabad. The institution offers a four year B Tech Programme in association with Ecole Centrale, Paris under an industry-academia memorandum of understanding with Jawaharlal Nehru Technological University, Hyderabad.

The institution''s vision is to train engineers, to be entrepreneurial and innovative as well as technically trained, so that they are capable of meeting the greatest challenges of the era. It is aligned to MEI''s work for the cause of promoting quality higher education by establishing institutions of higher learning, encourage education and research work in different disciplines and to promote innovation and technology development.

The Annual Report on CSR activities is provided as "Annexure IX".

SUSTAINABILITY

Your Company believes in business growth with responsibility. The Company has taken many steps strategically leveraging sustainability to its competitive advantage. Your Company has created "Green" strategies to identify high impact material issues across the social, economic and environmental dimensions and concentrate individually on each one of them with a sole goal of a sustainable business model creating value for all stakeholders. The Company''s initiatives aligning economic performance with environmental & social operations has ensured that business growth would not affect the future of our society, its ecological balance and life support functions.

Tech Mahindra has been publishing its sustainability performance since 2007-08 as part of the Mahindra Group Sustainability Report. The detailed Reports are available on the website http://www.mahindra.com/ How-We-Help/Environment/Sustainability-Reports

With emerging sustainability awareness in the market we have taken 3 year comprehensive targets against each of the material issues identified which are critical to business operations such as Improving Operational Eco-Efficiency, Associate Care & Development, Creating a Green Value Chain & Societal Care.

Tech Mahindra has managed environmental footprint essentially through a process which addresses issues ranging from Emission Reduction to Water Management and Green Infrastructure. There are also services and solutions for the customers such as bringing data center efficiency, platforms mobility and cloud services.

The Company has continuously striven to fine tune processes and systems in order to identify, quantify and reduce the environmental impacts of businesses and operations. Our efforts can be seen with the efforts put in across various areas in Sustainability Recognitions & Awards bestowed on the Company during the Financial Year 2014-15, mentioned elsewhere under Awards & Recognitions heading separately. During the year under review, efforts were made among others in the following areas:

- Occupancy sensors to reduce the electricity consumption.

- Wealth of Wellness initiative for associate wellbeing.

- Successful commissioning of solar plants at Pune (250kWh) & Chennai (264 kWh) campuses.

- Participation in Carbon Disclosure Project''s Supply Chain Program-2014.

- Focused approach towards green solutions for clients that has helped the Company to reduce 5756 metric tonnes carbon emissions per annum.

- The suite of cloud based solutions & platforms of the Company, have showcased benefits in not only better performance but also how they consume less electricity.

AWARDS AND RECOGNITION

Your Company continued its quest for excellence in its chosen area of business to emerge as a true global brand. Several awards and rankings continue to endorse your Company as a thought leader in the industry. The awards / recognitions received during the year 2014-15 include:

- Ranked 5th in IT and Software ranking by DUN and Bradstreet;

- Digital Humanitarian Award at TMF World 2014 for deploying Women Safety Mobile Application Fightback;

- Porter prize in recognition of company''s best strategic management practices;

- Businessworld identified Tech Mahindra among the fastest growing companies in India based on financial performance;

- Featured in FINTECH TOP 25 rankings for the year 2014 by IDC Financial Insights;

- The Association for Talent Development has ranked Tech Mahindra as the Top 5 BEST Organization across the globe for employee learning and talent development;

- European Software Testing Awards (TESTA), in the following categories, namely;

i) ''The Sogeti Green Testing Team of the Year''.

ii) ''Best Overall Use of Technology''.

iii) ''The Sage Most Innovative Project''.

- Business Today ranked among the top 50 companies in India''s most valuable companies ranking.

- Mr. C. P. Gurnani recognized as the CEO of the Year 2014 by Business Standard;

- Tech Mahindra Foundation (TMF) was awarded Pandit Madan Mohan Malviya Award for ''Best CSR Practices in Education'' by CSR Times;

- Mr. C. P. Gurnani, Managing Director and CEO, has been recognized as the ''Business Leader of the Year for Indian Companies in the US'' by Indo- American Chamber of Commerce (IACC);

- ''Golden Peacock Award for Excellence in Corporate Governance'' from Institute of Directors;

- The Business Services Group of the Company, has been declared as the Winner of ''Golden Peacock National Quality Award'' for the year 2014;

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the contributions made by employees towards the success of your Company. Your Directors gratefully acknowledge the co-operation and support received from the shareholders, customers, vendors, bankers, regulatory and Governmental authorities in India and abroad.

For and on behalf of the Board

Place: Mumbai Anand G. Mahindra

Date : May 26, 2015 Chairman

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Mar 31, 2013

To, The members of Mahindra & Mahindra Financial Services Limited

The Directors are pleased to present their Twenty-third Report together with the audited accounts of your Company for the Financial Year ended 31st March, 2013. The summarised financial results of the Company are given below:

FINANCIAL RESULTS (Rs. in Crores)

March 2013 March 2012

Total Income 3,894.7 2,794.6

Less : Finance Costs 1,618.8 1,120.3

Expenditure 1,003.1 729.5

Depreciation/Amortisation 22.2 19.6

Total Expenses 2,644.1 1,869.4

Profit Before Tax and Exceptional Item 1,250.6 925.2

Add: Exceptional Item 28.6 0.0

Profit Before Tax 1,279.2 925.2

Less : Provision For Tax

Current Tax 433.5 289.6

Deferred Tax (37.0) 15.5

Profit After Tax for the Year 882.7 620.1

Add : Amount brought forward from Previous Years 979.8 713.5

Amount available for Appropriation 1,862.5 1,333.6

Appropriations

General Reserve 88.3 62.0

Statutory Reserve 176.5 124.0

Proposed Dividend on Equity Shares 204.8 145.6

Income-tax on proposed Dividend 34.1 22.6

Excess provision for Corporate Dividend Tax on Equity Shares 0.0 (0.4) of earlier year

Surplus carried to Balance Sheet 1,358.8 979.8

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 3.60 per Equity Share of the face value of Rs. 2 each (including a special dividend of Re. 0.20 per Equity Share), payable to those Members whose names appear in the Register of Members as on the Book Closure date. The dividend including dividend tax will absorb a sum of Rs. 238.9 Crores (as against Rs. 168.2 Crores on account of dividend of Rs. 14 per Equity Share of the face value of Rs.10 each, paid for the previous year).

OPERATIONS

The overall disbursement registered a growth of 22.2 per cent at Rs. 23,838.6 Crores as compared to Rs. 19,504.3 Crores in the previous year. Your Company during the year under review, continued to provide a wide range of financial products and services to its customers through diversification of its product portfolio within its vehicle financing business as well as through the introduction and growth of other financial products and maintained its market leadership position in rural and semi-urban markets.

Your Company has increased its presence in financing of commercial vehicle, construction equipment, as well as, pre-owned vehicle while maintaining aggressive growth in car financing, retaining its leadership position in financing Mahindra range of vehicles and tractors in addition to extending its lending to vehicles of other Original Equipment Manufacturers (OEMs).

Your Company has one of the largest network of branches amongst Non-Banking Financial Companies operating in rural and semi-urban areas. Your Company''s nationwide network of branches and locally recruited employees have facilitated in enhancing and strengthening long-term relationship with its customers.

During the year under review, your Company expanded its reach in the Micro Small and Medium Enterprises (MSME) segment as well as continued to explore the opportunities in the emerging Gold Loan industry in India.

Income grew by 39.4 per cent to Rs. 3,894.7 Crores for the year ended 31st March, 2013 as compared to Rs. 2,794.6 Crores for the previous year. Profit Before Tax was 38.3 per cent higher at Rs. 1,279.2 Crores as compared to Rs. 925.2 Crores for the previous year. Profit After Tax grew at a healthy rate of 42.4 per cent to Rs. 882.7 Crores as compared to Rs. 620.1 Crores in the previous year.

Your Company has cumulatively financed over two and a half million customers since its inception. The number of contracts entered into by the Company during the year was 5,33,134 as against 4,66,416 in the previous year.

During the year under review, the Assets Under Management have crossed Rs. 27,000 Crores and stood at Rs. 27,913 Crores as at 31st March, 2013.

DISTRIBUTION OF MUTUAL FUND PRODUCTS

During the year under review, the activity of distribution of Mutual Fund Products (MFP) was carried out across 152 branches covering 19 States.

As on 31st March, 2013, the amount of Assets Under Management outstanding through the Company''s Advisory Services on MFP, aggregate of institutional and retail segment, was Rs. 1,109 Crores and the number of clients stood at 41,023.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of the Company''s performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

CORPORATE GOVERNANCE

Your Company practices a culture that is built on core values and ethical governance practices and is committed to transparency in all its dealings. A Report on Corporate Governance along with a Certificate from the Statutory Auditors of the Company regarding the compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement are annexed to this Report.

ECONOMY

In the current year the global economy continued to witness sluggish growth. Overall growth at 3 per cent was 0.5 per cent lower compared to the pre- crisis levels in 2008. While the US grew at better than expected levels, the entire Euro Zone was lurching from one crisis to another. Apart from the financial crisis staring at the PIIGS (Portugal, Italy, Ireland, Greece and Spain) countries, major economies like Germany and France experienced low growths. European Central Bank''s attempts to kickstart the economy through its own version of quantitative easing did not yield the desired results and more steps would be required to reignite the growth. The implementation of the Basel III guidelines would cause the European Banks to deleverage. This might affect the capital flows to the emerging markets and the consequent liquidity crunch would lead to a possible hike in interest rates.

Against the backdrop of an adverse global environment and a spiraling current account deficit, India''s growth slowed down significantly. GDP growth for the Financial Year 2012-13 is expected to be around 5 per cent, the slowest growth in more than a decade. While there was a slowdown across the entire economy, it was more pronounced in the industrial sector. Low capex by the corporate sector as a result of uncertain policy environment and delay in key approvals was the primary reason behind this. Inflation, an area of significant concern of the Reserve Bank of India (RBI), eased considerably in the latter part of the year and was 5.96 per cent in March 2013. Despite the easing of inflation the RBI adopted a conservative approach and reduced the rates by only 25 basis points in March 2013.

Liquidity remained under pressure throughout the year because of persistently high government cash balances with RBI and elevated incremental credit to deposit ratio for significant part of the year. The net average liquidity injection under the daily liquidity adjustment facility (LAF) at Rs. 730 billion during the first half of the year, increased significantly to Rs. 1,012 billion during the second half. In order to alleviate liquidity pressures, RBI lowered the Cash Reserve Ratio (CRR) cumulatively by 75 basis points on three occasions and the statutory liquidity ratio (SLR) by 100 basis points during the year. Additionally, RBI injected liquidity to the tune of Rs. 1.5 trillion through Open Market Operations (OMO) purchase auctions.

Against this back drop of sharp decline in the GDP growth and moderation in headline WPI inflation, the stance of the RBI Monetary Policy is intended to appropriately manage liquidity to ensure adequate flow to the productive sectors of the economy, guard against the risk of inflation pressures re-emerging and continue to address risks to growth.

While the overall economy decelerated significantly, the rural and semi-urban markets, the focus areas of the Company, witnessed higher growth. The governmental thrust on rural areas through programmes like MGNREGA, high agri commodity prices, etc., led to an increase in disposable income thereby leading to a robust demand for various products and services. Consequently, there was enhanced demand for vehicles in these geographies. With broad-basing of economic activities in the rural areas and the governmental thrust on rural infrastructure, it is expected that rural India will continue to grow rapidly in the next year.

FINANCE

During the year under review, RBI shifted its stance from an inflation focused to an accommodating growth focused policy and reduced the Repo Rate three times totalling to 100 basis points to contain the increasing risk to the growth, which resulted in medium/long term interest rates coming-off approximately by 50 basis points. RBI has clearly indicated that even as the policy stance emphasises addressing the growth risk, the headroom for further monetary easing remains quite limited. Liquidity conditions remained in a deficit mode throughout the year. In order to mitigate the liquidity tightness, RBI conducted OMOs and reduced CRR by 75 basis points during the last year. However, your Company was able to reduce the impact of volatility in the interest rates by ensuring that prudent Asset Liability Management Guidelines were adhered to.

During the year under review, your Company continued with its diverse methods of sourcing funds in addition to regular borrowings like Secured and Unsecured Debentures, Term Loans, Commercial Paper, etc., and maintained prudential Asset/ Liability match throughout the year. Your Company sourced long term loans from banks at attractive rates. Your Company also issued Subordinated Debt amounting to Rs. 115 Crores and successfully completed five securitisation transactions (at par structure) amounting to Rs. 1,433.6 Crores.

During the year, your Company actively participated in a number of investor meets both in India and abroad organised by reputed Global and Domestic Broking Houses. Your Company also periodically conducted analysts'' meets and conference calls to communicate details of performance, important developments and exchange of information.

SHARE CAPITAL

Qualified Institutions Placement

On 16th November, 2012, your Company successfully concluded the Qualified Institutions Placement (QIP) issue to Qualified Institutional Buyers aggregating Rs. 866.80 Crores through the issue of 97,50,257 Equity Shares of the Face Value of Rs. 10 each at a price of Rs. 889 per Equity Share including a premium of Rs. 879 per Equity Share, which is a 0.94 per cent premium to the price of Rs. 880.70 per share, arrived at as per Regulation 85 of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.

The Company received bids of approximately Rs. 4,345 Crores. Despite it being launched in markets clouded by bearish sentiments, the second QIP offering by your Company received an overwhelming response, as seen by the high levels of subscription and strong participation from International and Domestic Institutional Investors.

Your Company has duly utilised the issue proceeds to augment its capital base, meet its capital requirements, for other general corporate purposes and for payment of Issue Expenses. This is in line with the issue purpose mentioned in the Placement Document filed with various Regulatory Authorities.

Sub-Division ("Stock-Split") of Face Value of Equity Shares

Pursuant to the approval received from the Members of the Company by way of Postal Ballot on 5th February, 2013, your Company has on 19th February, 2013, upon sub-division, issued 5 (Five) Equity Shares of Rs. 2 each fully paid-up in the Equity Share Capital of the Company for every 1 (One) Equity Share of the face value of Rs. 10 fully paid-up held by the Members in the Equity Share Capital of the Company as on the Record Date i.e. 18th February, 2013.

Post allotment of Equity Shares and sub-division of Equity Shares as aforesaid, the issued, subscribed and paid-up Share Capital of the Company stands at Rs. 113.8 Crores comprising of 56,87,64,960 Equity Shares of Rs. 2 each fully paid-up and the Authorised Share Capital of the Company stands at Rs. 190 Crores comprising of 70,00,00,000 Equity Shares of Rs. 2 each and 50,00,000 Redeemable Non-Convertible Preference Shares of Rs. 100 each. Consequent to the Stock-split, a new International Securities Identification Number (ISIN) INE774D01024 has been created by the Depositories for the Company''s Equity Shares of the face value of Rs. 2 each.

CAPITAL ADEQUACY

Consequent upon the allotment of Equity Shares to the Qualified Institutional Buyers under the Qualified Institutions Placement, the paid-up share capital of the Company has increased to Rs. 113.8 Crores as on 31st March, 2013 from Rs. 104.0 Crores as on 31st March, 2012. The securities premium account has also increased to Rs. 2,014.5 Crores from Rs. 1,165.3 Crores. As a result of the increased net worth, your Company was able to enhance the Capital to Risk Assets Ratio (CRAR) to 19.7 per cent as on 31st March, 2013, which is well above 15.0 per cent CRAR prescribed by RBI.

HOLDING COMPANY

Pursuant to the allotment of Equity Shares to the Qualified Institutional Buyers under the Qualified Institutions Placement, the shareholding of Mahindra & Mahindra Limited, the holding company, stands reduced to 51.2 per cent from 56.0 per cent.

STOCK OPTIONS

During the year under review, no new Options have been granted under the ''Mahindra & Mahindra Financial Services Limited Employees'' Stock Option Scheme-2005'' and ''Mahindra & Mahindra Financial Services Limited Employees'' Stock Option Scheme-2010'' respectively.

Details required to be provided under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure I to this Report.

RBI GUIDELINES

The Company has complied with all the applicable regulations of the Reserve Bank of India (RBI). As a prudent practice, your Company makes accelerated provisioning for Non-Performing Assets (NPAs) than that required by RBI for NBFCs.

Standard Assets'' Provisioning

Pursuant to the Notification No. DNBS.222/CGM (US)-2011 dated 17th January, 2011 issued by the RBI for making a general provision at 0.25 per cent on the outstanding standard assets of NBFCs, your Company has made a provision of Rs. 16.0 Crores as at 31st March, 2013, towards the same. With effect from the current year, the Company has, on a prudent basis, decided to make additional/ accelerated general provision on its standard assets and has provided Rs. 36.0 Crores for the same which is reflected as "Exceptional Items" in the Statement of Profit and Loss.

CREDIT RATING

During the year under review, CRISIL Limited [CRISIL], has reaffirmed the rating to the Company''s Long-term Debt Instruments and Bank Facilities as ''CRISIL AA / Stable'' and the Company''s Fixed Deposit Programme as ''FAAA/Stable'', respectively. The ''AA /Stable'' rating indicates a high degree of safety with regard to timely payment of financial obligations. The rating on the Company''s Short-term Debt and Bank Loans has been reaffirmed at ''CRISIL A1 '' (earlier P1 ) which is the highest level of rating.

During the year under review, India Ratings & Research Private Limited, which is part of the Fitch Group, has reaffirmed the Company''s National Long-term Rating Instrument and Lower Tier II Subordinated Debt programme to ''IND AA /Stable''. The ''IND AA'' denotes that Instruments with this rating are considered to have high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk. Modifiers {" " (plus) / "-" (minus)} can be used with the rating symbols for the categories ''IND AA'' to ''IND C''. The modifiers reflect the comparative standing within the category.

Brickwork Ratings India Private Limited has, during the year, re-affirmed the ''BWR AA '' rating with Positive outlook to the Company''s Long-term Subordinated Debt Issue. ''BWR AA '' stands for an instrument that is considered to offer high credit quality/safety in terms of timely servicing of principal and interest obligations.

FIXED DEPOSITS AND LOANS/ADVANCES

As on 31st March, 2013, your Company has mobilised funds from Fixed Deposits to the tune of Rs. 2,327.9 Crores, with an investor base of over 1,52,553 investors.

Your Company has initiated various measures towards improvement of service levels to the Fixed Deposit holders. As a customer-centric process, the Company has initiated the process of online repayment directly to the customer''s account on maturity of the Fixed Deposit. In cases where electronic transfer facility is not available, the repayment is made through a post-dated cheque sent before the maturity date to the depositors. Your Company has also launched across-the-counter facility at its Corporate Office Annexe, to issue Fixed Deposit Receipts promptly to its customers and the same is expected to be implemented across its branches shortly.

As at 31st March, 2013, 1,224 deposits amounting to Rs. 6.8 Crores had matured for payment and remained unclaimed. The unclaimed deposits have since reduced to 809 deposits amounting to Rs. 4.4 Crores.

The particulars of loans/advances and investment in its own shares by listed companies, their subsidiaries, associates, etc., required to be disclosed in the Annual Accounts of the Company pursuant to Clause 32 of the Listing Agreement are furnished separately.

SUSTAINABILITY INITIATIVES

Your Company has been way ahead in the Financial Services Sector in India to protect and sustain the rural livelihoods through a sustainable business model. The business model aims at transforming rural lives and driving positive change in the community. From the Financial Year 2008-09 onwards, your Company has taken steady but impactful steps towards sustainability by charting out a roadmap of five years on Triple bottom line for balanced approach towards economic activity, environmental responses and social progress. Your Company''s Sustainability Report continues to attain ''A '' rating from Global Reporting Initiative (GRI).

Your Company continued with its focus on sustainability awareness for employees, vendors, suppliers and customers and took various initiatives in this direction. Your Company made proactive efforts to fight against global warming through Project ''Mahindra Hariyali'', by planting around 54,000 saplings across the country. Various initiatives were also taken for conservation of water and energy, reduction of noise pollution and paper consumption. Along with this your Company has also started reporting on Carbon Disclosure Project (CDP) from the Financial Year 2011-12. CDP focuses on how companies are geared up, to deal with the challenges of Climate change in a carbon constrained economy. CDP works for 655 institutional investors with $78 trillion under management.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

As a socially responsible citizen, the Mahindra Group, through its various Corporate Social Responsibility (CSR) initiatives, is enabling entire communities to ''RISE''. Rise is a symbol of the Mahindra Group''s dedication to continual improvement within itself and in the Communities the Group touches. CSR continues to be an integral part of the vision of the Mahindra Group and this year too, your Company has pledged 1 per cent of its Profit after Tax for CSR initiatives, largely to benefit the economically weaker and socially disadvantaged sections of the Society and has continued to be incessantly engaged in activities, which add value to the community around it.

As a part of its commitment to Corporate Social Responsibility initiatives, your Company, during the year continued to involve itself in social welfare activities by contributing to recognised charitable institutions, which specifically benefit the economically weaker sections of the society as well as extended its support to Nanhi Kali, the flagship programme of the K.C. Mahindra Education Trust, which supports the education of the disadvantaged girl child.

During the year under review, your Company organised a nationwide Blood Donation Drive to re- affirm its pledge to the society and collected 1,084 bottles of blood. Your Company also conducted a cancer detection camp in the interior areas of Dharward. The ''Lifeline Express'' Train, in association with Impact India, catered to the medical needs of 2,550 underprivileged people in Puri (Odhisha). Your Company also donated funds for the purchase of 4 ambulances, 3 DG sets and Palliative Care Unit equipment to numerous charitable institutions. The Company also took a step in lighting up the lives of the people in the interior locations of Tamil Nadu by installing 165 Solar Street Lights.

During the year under review, your Company contributed Rs. 5.7 Crores towards Corporate Social Responsibility to various institutions for charitable purposes.

ACHIEVEMENTS

During the year under review, your Company was featured in the ET 500 ''Star Trek : The Dazzling Dozen'' as well as in the ET 500 2012 ''India''s Biggest 500 Companies''. Your Company was also awarded the inaugural Porter Prize for creating Distinctive Value, the NASSCOM IT User Awards 2012, the EDGE Award 2012 for best use of Technology, the Silver Award 2012 for Best Corporate Website from ABCI (Association of Business Communicators of India), eOdisha Awards 2013 for Information and Communication Technologies in Financial Inclusion Initiative, Asian Leadership Awards 2012 for best use of IT in Investment Banking by the Asian Confederation of Businesses and the First Runner-up Trophy in the NBFCs - Asset Backed Lending category at the Best Bank & Financial Institution Awards 2012 by CNBC TV18.

Your Company has won the Golden Peacock HR Excellence Awards 2012 and was also awarded the Commendation Certificate for ''Strong Commitment to HR Excellence'' in the 3rd National HR Excellence Awards by the Confederation of Indian Industry. The Company was ranked 5th in the Financial Services Sector by the Great Places to Work Institute and was also included in the Top 80 Indian Power Brands. Your Company was also conferred with 6 PRCI Annual Corporate Collateral Awards 2012 by the Public Relations Council of India (PRCI) as well as adjudged the First Runner-up at the Best Learning Organisation of Asia Awards by the L&OD Round Table, 2012.

DIRECTORS

Mr. Bharat Doshi, Chairman and Mr. Dhananjay Mungale, Independent Director, retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-appointment.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to section 217(2AA) of the Companies Act, 1956, your Directors, based on the representation received from the Operating Management, and after due enquiry, confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the profit of the Company for the year ended on that date;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the annual accounts have been prepared on a going concern basis.

SUBSIDIARY COMPANIES

Mahindra Insurance Brokers Limited

MIBL has crossed the 8,00,000 mark in terms of policies serviced, with a total of 8,39,408 policies for both Life and Non-Life retail business lines, for the year ended 31st March, 2013. The customised Life insurance cover "Mahindra Loan Suraksha" (MLS) continued to receive an encouraging response and grew by 21 per cent from 3,63,691 lives covered with a Sum Assured of Rs. 8,255.0 Crores in the financial year 2011-12 to 4,40,553 lives covered with a Sum Assured of Rs. 11,798.2 Crores in the financial year 2012-13, with a substantial portion being covered in the rural markets.

MIBL achieved a growth of 33.8% in Net Premium generated for the Corporate and Retail business lines, increasing from Rs. 413.8 Crores (Gross Premium Rs. 456.2 Crores) in the financial year 2011-12 to Rs. 553.8 Crores (Gross Premium Rs.619.8 Crores) in the financial year 2012-13, crossing a milestone of Rs.600 Crores of Gross Premium.

The Income increased by approximately 85 per cent from Rs. 46.6 Crores in the financial year 2011-12 to Rs. 86.3 Crores in the financial year 2012-13. The Profit before Tax increased by 154.2 per cent from Rs. 20.1 Crores to Rs. 51.2 Crores, and the Profit after Tax increased by 155 per cent from Rs. 13.5 Crores to Rs. 34.5 Crores during the same period.

During the year under review, MIBL has entered into Definitive Agreements with Inclusion Resources Private Limited (IRPL), a subsidiary of LeapFrog Inclusion Fund (LFIF), incorporated in Singapore and the Company, to expand MIBL''s services to consumers in rural and semi-urban areas of India, by bringing in IRPL''s international knowledge and experience, especially in using low cost technology solutions to provide insurance in mass markets. In addition, given IRPL''s expertise and association in reinsurance globally, IRPL would help MIBL to connect with various global reinsurers to assist in MIBL''s reinsurance broking business.

During the year under review MIBL has received the necessary approvals from the Insurance Regulatory and Development Authority, the Foreign Investment Promotion Board as well as the Reserve Bank of India and the Company has in pursuance of the aforesaid Definitive Agreements, sold 3,09,278 Equity Shares of Rs. 10 each of MIBL to IRPL, for an amount aggregating Rs. 64.3 Crores, vide issue of transfer instruction dated 30th March, 2013. On account of a technical issue raised by the Depository Participant of IRPL, the actual transfer of 309,278 Equity Shares on sale by the Company from the demat account of the Company, was recorded in the demat account of IRPL on 2nd April, 2013, being the next working day. MIBL has also made a preferential allotment to IRPL of 77,320 Equity Shares of Rs. 10 each for cash at a premium of Rs. 2,070 per share aggregating to Rs. 16.1 Crores.

Pursuant to the preferential allotment and transfer of Equity Shares to IRPL, the shareholding of the Company in MIBL stands reduced to 85 per cent from 100 per cent and hence MIBL has ceased to be a wholly-owned subsidiary of the Company.

Mahindra Rural Housing Finance Limited

Mahindra Rural Housing Finance Limited (MRHFL) has during the year ended 31st March, 2013, disbursed loans aggregating Rs. 432.9 Crores (previous year Rs. 266.8 Crores), covering over 61,000 families. The profit after tax for the year ended 31st March, 2013 is Rs. 20.3 Crores (previous year Rs. 11.9 Crores). The outstanding loan portfolio as at 31st March, 2013 stood at Rs. 879.5 Crores.

The housing loans sanctioned during the year ended 31st March, 2013 were to the extent of Rs. 541.0 Crores as against Rs. 292.2 Crores sanctioned during the previous year. The cumulative loan sanctions of MRHFL as at the end of financial year 2012-13 were Rs. 1,253.3 Crores as compared to Rs. 718.4 Crores in the previous year. The cumulative loan disbursement at the end of the year stood at Rs. 1,040.5 Crores as compared to Rs. 607.4 Crores in the previous year.

MRHFL has been expanding its geographical presence, especially to provide affordable services for rural households. During the year under review, operations were strengthened in the states of Maharashtra, Gujarat, Rajasthan, Tamilnadu, Andhra Pradesh, Kerala, Karnataka, Madhya Pradesh and Bihar.

Mahindra Business & Consulting Services

Private Limited

Mahindra Business & Consulting Services Private Limited (MBCSPL) provides staffing services mainly for your Company and its subsidiaries viz. MIBL and MRHFL and the ultimate parent company, viz. Mahindra & Mahindra Limited. As at 31st March, 2013, MBCSPL had on rolls 8,098 employees who were deputed to these companies to provide services under ongoing contracts. MBCSPL earns its income in the form of fees towards staffing services. MBCSPL registered a Profit after Tax of Rs. 173.79 Lacs for the year ended 31st March, 2013 as compared to Rs. 7.06 Lacs in the previous year.

The Statement pursuant to section 212 of the Companies Act, 1956, containing details of the Company''s subsidiaries is attached. In accordance with the General Circular No. 2/2011 dated 8th February, 2011 issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies are not being attached to the Balance Sheet of the Company.

The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information, upon receipt of request from any Member of the Company interested in obtaining the same. However, as directed by the Central Government, the financial data of the subsidiaries have been separately furnished, forming part of the Annual Report. Further, the Annual Accounts of the subsidiaries would also be available for inspection at the Head Office of the Company and at the Office of the respective subsidiary companies, during working hours up to the date of the Annual General Meeting. The Company shall also put the details of accounts of individual subsidiary companies on its website www.mahindrafinance.com.

JOINT VENTURE

Mahindra Finance USA LLC.

Mahindra Finance USA LLC is a joint venture company incorporated in Delaware, U.S.A, for the purpose of providing wholesale inventory financing to US based dealers, financing dealer purchases of Mahindra products and providing retail financing to end- user customers to finance their lease or purchase of Mahindra products or used products from dealers, in U.S.A. The Company has a 49 per cent shareholding along with De Lage Landen Financial Services Inc., a wholly-owned subsidiary of the Rabobank Group, which holds the balance 51 per cent shareholding in the joint venture company.

The joint venture company''s disbursement registered a growth of 67.63 per cent as compared to the previous year. Income grew by 144.66 per cent to USD 104.42 Lacs for the year ended 31st March, 2013 as compared to USD 42.68 Lacs for the previous year. Profit Before Tax was 205.99 per cent higher at USD 26.04 Lacs as compared to USD 8.51 Lacs for the previous year. Profit After Tax grew at a healthy rate of 212.69 per cent to USD 16.26 Lacs as compared to USD 5.20 Lacs in the previous year.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company and its three subsidiaries viz. MIBL, MRHFL and MBCSPL, prepared in accordance with Accounting Standard AS21 prescribed by The Institute of Chartered Accountants of India, form part of this Annual Report. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies and its joint venture viz. Mahindra Finance USA LLC.

AUDITORS

Messrs. B. K. Khare & Co., Chartered Accountants, retire as Auditors of the Company at the forthcoming Annual General Meeting and have given their consent for re-appointment. The shareholders would be required to elect Auditors for the current year and fix their remuneration.

As required under the provisions of section 224(1B) of the Companies Act, 1956, the Company has obtained a written certificate from Messrs. B. K. Khare & Co., Chartered Accountants, to the effect that their re- appointment, if made, would be in conformity with the limits specified in the said section.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to the energy conservation, technology absorption and foreign exchange earnings and outgo, as required under section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in Annexure II to this Report.

PARTICULARS OF EMPLOYEES AS REQUIRED UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956 AND THE RULES MADE THEREUNDER

The Company had eight employees who were in receipt of remuneration of not less than Rs. 60,00,000 during the year ended 31st March, 2013 or not less than Rs. 5,00,000 per month during any part of the said year. However, as per the provisions of section 219(1)(b)(iv) of the Companies Act, 1956, the Directors'' Report and Accounts are being sent to all the Shareholders of the Company excluding the Statement of particulars of employees. Any Shareholder interested in obtaining a copy of the Statement may write to the Company Secretary of the Company.

For and on behalf of the Board

Bharat Doshi

Chairman

Mumbai, 23rd April, 2013

---

Mar 31, 2012

To The members of Mahindra & Mahindra Financial Services Limited

The Directors are pleased to present their Twenty-second Report together with the audited accounts of your Company for the Financial Year ended 31st March, 2012. The summarised financial results of the Company are given below:

(Rs. in Crores)

March 2012 March 2011

Total Income 2,794.6 1,977.5

Less : Finance Costs 1,120.3 660.2

Expenditure 729.5 599.1

Depreciation/Amortisation 19.6 15.8

Total Expenses 1,869.4 1,275.1

Profit Before Tax 925.2 702.4 Less : Provision For Tax

Current Tax 289.6 249.1

Deferred Tax 15.5 (9.8)

Profit After Tax for the Year 620.1 463.1

Add : Amount brought forward from Previous Years 713.6 510.7

Amount available for Appropriation 1,333.7 973.8 Appropriations :

General Reserve 62.0 46.3

Statutory Reserve 124.0 92.6

Proposed dividend on Equity Shares 145.6 104.0

Income-tax on proposed dividend 22.6 17.3

Excess provision for Corporate Dividend Tax on Equity Shares (0.4) - of earlier year

Surplus carried to Balance Sheet 979.9 713.6

1,333.7 973.8

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs.14 per Equity Share of the face value of Rs. 10 each, payable to those Members whose names appear in the Register of Members as on the Book Closure date. The dividend including dividend tax will absorb a sum of Rs. 168.2 Crores (as against Rs. 121.3 Crores on account of dividend of Rs. 10 per Equity Share, paid for the previous year).

OPERATIONS

The overall disbursement registered a growth of 35.3 per cent at Rs. 19,504.3 Crores as compared to Rs. 14,419.9 Crores in the previous year. Your Company during the year under review, continued to provide a wide range of financial products and services to its customers through diversification of its product portfolio within its vehicle financing business as well as through the introduction and growth of other financial

products and maintained its market leadership position in rural and semi-urban markets. Your Company has increased its presence in financing of commercial vehicle, construction equipment, as well as, pre-owned vehicle while maintaining aggressive growth in car financing, retaining its leadership position in financing Mahindra range of vehicles and tractors in addition to extending its lending to vehicles of other Original Equipment Manufacturers (OEMs).

Your Company has one of the largest network of branches amongst Non-Banking Financial Companies operating in rural and semi-urban areas. Your Company's nationwide network of branches and locally recruited employees have facilitated in developing and strengthening relationship with its customers.

During the year under review, your Company continued to explore the opportunities in the Micro Small and Medium Enterprises (MSME) segment as well as in the emerging Gold Loan industry in India.

Income grew by 41.3 per cent to Rs. 2,794.6 Crores for the year ended 31st March, 2012 as compared to Rs. 1,977.5 Crores for the previous year. Profit Before Tax was 31.7 per cent higher at Rs. 925.2 Crores as compared to Rs. 702.4 Crores for the previous year. Profit After Tax grew at a healthy rate of 33.9 per cent to Rs. 620.1 Crores as compared to Rs. 463.1 Crores in the previous year.

Your Company has achieved a very important milestone of cumulatively financing over two million customers since its inception. The number of contracts entered into by the Company during the year was 4,66,416 as against 3,67,774 in the previous year.

During the year under review, the Assets Under Management have crossed Rs. 20,000 Crores and stood at Rs. 20,643.0 Crores as at 31st March, 2012.

DISTRIBUTION OF MUTUAL FUND PRODUCTS

During the year under review, the activity of distribution of Mutual Fund Products (MFP) was carried out across 31 branches covering 14 States.

The amount of MFP outstanding through the Company's Advisory Services, aggregate of institutional and retail segment crossed an amount of Rs.875 Crores and the number of clients stood at 41,074.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed discussion on the Company's operations is presented in the chapter on Management Discussion and Analysis, which forms part of this Annual Report.

ECONOMY

The global economy witnessed significant volatility during the year. While growth and employment in the US economy appeared to be improving, the crisis in the Euro Zone threatened to plunge the entire financial world into turmoil. European Central Bank's intervention has seemingly defused the situation but it is expected that other steps need to be taken for the threat of a crisis to recede. The deleveraging of the European Banks is expected to affect capital flows to emerging markets and the resultant liquidity crunch might drive up the interest rates.

Faced with global uncertainty, cyclical and structural factors, India's growth slowed down to less than 7 per cent for the Financial Year 2011-12. While the services continued to grow at a rapid pace (8.7 per cent growth), there was a sharp slowdown in industrial growth to 2.8 per cent. During the year, inflation continued to be a key concern for the Reserve Bank of India (RBI) and the various steps taken by it in the first half helped in reducing the inflation rate to 6.9 per cent by March 2012. However, this led to a steep rise in the interest costs and the weighted average lending rates of the five major public sector banks increased from 11 per cent in March 2011 to 12.8 per cent by March 2012. The slowdown in growth coupled with high interest rates has led to a decline in investment rates.

Liquidity conditions were tight throughout the year and the situation aggravated post November 2011 when the liquidity deficit exceeded 1 per cent of net demand and time liabilities (NDTL) of banks. To ease the situation, RBI conducted significant Open Market Operations (OMOs) and cut the Cash Reserve Ratio (CRR) by 125 basis points leading to an improvement in the liquidity situation. It is expected that the scenario of tight liquidity and high interest rates will continue in the Financial Year 2012-13.

Amidst the overall slowdown in the economy, the semi-urban and rural markets, the focus areas of the Company, continued to witness rapid growth. The combination of increased disposable incomes along with favourable demographics led to a robust demand for various products and services in these markets. Consequently, vehicle demand in rural areas grew at a faster pace, an area which is core to the Company's operations. With broad-basing of economic activities in the rural areas and the governmental thrust on rural infrastructure, it is expected that rural India will continue to grow rapidly in the next year.

FINANCE

During the year under review, RBI continued its stance against inflation and adopted a calibrated approach by hiking the Repo Rate five times totalling to 175 basis points to contain the inflationary pressure, which resulted in medium/long term interest rates moving up approximately by 150 basis points. Liquidity conditions remained in a deficit mode throughout the year resulting in the increase of short term money market rate by 200 basis points. In order to mitigate the liquidity tightness, RBI conducted OMOs and reduced CRR by 125 basis points during the last quarter of the year. However, your Company was able to reduce the impact of increase in the interest rates by ensuring that prudent Asset Liability Management Guidelines are adhered to.

In its Monetary Policy for the Financial Year 2011-12, RBI discontinued the priority sector status for bank loans to Non-Banking Financial Companies (NBFCs), thereby placing additional pressure on NBFCs in raising funds.

During the year under review, your Company continued with its diverse methods of sourcing funds in addition to regular borrowings like Secured and Unsecured Debentures, Term Loans, Commercial Paper, etc., and maintained prudential Asset/Liability match through out the year. Your Company sourced long term loans from banks at attractive rates. Your Company also issued Subordinated Debt amounting to Rs. 100.5 Crores and successfully assigned receivables to the tune of Rs. 1,487.4 Crores.

During the year, your Company actively participated in a number of investor meets both in India and abroad organised by reputed Global and Domestic Broking Houses. Your Company also periodically conducted analysts' meets and conference calls to communicate details of performance, important developments and exchange of information.

SHARE CAPITAL

The shareholders have by a Special Resolution passed by means of a Postal Ballot Voting process on 1st March, 2012, approved the issue of Redeemable Non- Convertible Preference Shares of an aggregate nominal amount not exceeding Rs. 50 Crores, in the course of domestic offering.

CAPITAL ADEQUACY

As on 31st March, 2012, the Capital to Risk Assets Ratio (CRAR) of your Company was 18.0 per cent as against the minimum requirement of 15.0 per cent prescribed by RBI.

STOCK OPTIONS

During the year under review, on the recommendation of the Remuneration/Compensation Committee of your Company, the Trustees of the Mahindra & Mahindra Financial Services Limited Employees' Stock Option Trust have granted 42,426 Stock Options to Eligible Employees under the 'Mahindra & Mahindra Financial Services Limited Employees' Stock Option Scheme-2010' No new Options have been granted under the 'Mahindra & Mahindra Financial Services Limited Employees' Stock Option Scheme-2005'

Details required to be provided under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure I to this Report.

RBI GUIDELINES

The Company has complied with all the applicable regulations of the Reserve Bank of India (RBI). As a prudent practice, your Company makes accelerated provisioning for Non-Performing Assets (NPAs) than that required by RBI for NBFCs.

Standard Assets' Provisioning

Pursuant to the Notification No. DNBS.222/CGM (US)- 2011 dated 17th January, 2011 issued by the RBI for making a general provision at 0.25 per cent on the outstanding standard assets of NBFCs, your Company has made a provision of Rs.43.5 Crores as at 31st March, 2012, towards the same.

CREDIT RATING

During the year under review, CRISIL Limited [CRISIL], has reaffirmed the rating to the Company's Long-term Debt Instruments and Bank Facilities as 'CRISIL AA / Stable' and the Company's Fixed Deposit Programme as 'FAAA/Stable', respectively. The 'AA /Stable' rating indicates a high degree of safety with regard to timely payment of financial obligations. The rating on the Company's Short-term Debt and Bank Loans has been re-affirmed at 'CRISIL A1 ' (earlier P1 ) which is the highest level of rating. CRISIL has, pursuant to Circular No. CIR/MIRSD/4/2011 dated 15th June, 2011 issued by the Securities and Exchange Board of India (SEBI) on 'Standardisation of Rating Symbols and Definitions' revised its rating symbols and definitions with effect from 11th July, 2011.

During the year under review, Fitch Ratings India Private Limited has, after due consideration, upgraded the Company's National Long-term Rating instrument and Lower Tier II Subordinated Debt programme to 'Fitch AA (ind)'/Stable from 'Fitch AA(ind)'/Positive. The 'AA(ind)' national ratings denote a very strong credit risk relative to other issuers or issues in the country. The credit risk inherent in these financial commitments differs only slightly from the country's highest rated issuers or issues. Within a band of rating symbols from 'AA(ind)' to 'B(ind)', the signs " " or "-" may be appended to a rating to denote relative status within the rating category.

Brickworks Ratings India Private Limited has, during the year, re-affirmed the "BWR AA " rating with Positive outlook to the Company's Long-term Subordinated Debt Issue. 'BWR AA ' stands for an instrument that is considered to offer high credit quality/safety in terms of timely servicing of principal and interest obligations.

FIXED DEPOSITS AND LOANS/ADVANCES

As on 31st March, 2012, your Company has mobilised funds from Fixed Deposits to the tune of Rs.1,670 Crores, with an investor base of over 85,000 investors.

Your Company has initiated various measures towards improvement of service levels to the Fixed Deposit holders. As a customer-centric process, the Company has initiated the process of online repayment directly to the customer's account on maturity of the Fixed Deposit. In cases where electronic transfer facility is not available, the repayment is made through a post-dated cheque before the maturity date to the depositors.

As at 31st March, 2012, 708 deposits amounting to Rs.3.3 Crores had matured for payment and remained unclaimed. The unclaimed deposits have since reduced to 351 deposits amounting to Rs. 1.7 Crores.

The particulars of loans/advances and investment in its own shares by listed companies, their subsidiaries, associates, etc., required to be disclosed in the Annual Accounts of the Company pursuant to Clause 32 of the Listing Agreement are furnished separately.

SUSTABILITY INITIATIVES

Your Company has taken a lead role in Financial Services Sector in India to protect and sustain the rural livelihoods through a sustainable business model. The model aims at transforming rural lives and driving positive change in the community. From the Financial Year 2008-09 onwards, your Company has taken steady but impactful steps towards sustainability by charting out a roadmap of five years on Triple bottom line for balanced approach towards economic activity, environmental responses and social progress. In the Financial Year 2009-10, your Company released the Finance Sector supplement stipulated by Global Reporting Initiative (GRI) giving an overview of Product Portfolio and initiatives of Financial Literacy for customers. Your Company's Sustainability Report continues to attain A rating from GRI.

During the year, your Company enhanced the scope of Sustainability Reporting to its two subsidiaries, viz. Mahindra Insurance Brokers Limited and Mahindra Rural Housing Finance Limited. The Company has started with initiatives like Online Drona (Induction) Program as well as Online Appraisal aimed at reducing the consumption of paper. Your Company is glad to inform that it was able to reduce 95 per cent of paper consumed in these two processes. Your Company also gave an option to the shareholders to avail of a copy of the Annual Report in electronic form instead of a physical copy. Your Company continued installation of Solar Hybrid Photovoltaic Power System at various branches, which operates on Solar Power during day time. Around twenty-five branches have been installed with Solar panels. Enquiry Management and Loan Application Process (EMLAP) and Handheld Devices have led to complete automation of the field related activities, which not only helped to achieve reduction in the Green House Gas emissions but also resulted into reduced paper consumption and improved the quality of service. Around 700 desktops have been replaced with Thin Client for power efficiency in branches resulting in saving of around 125 watts of electricity per hour.

Your Company continued with its focus on enhancing the concept of sustainability in the minds of its employees, vendors, suppliers and customers and has taken various initiatives for conservation of water and energy as well as reduction of noise pollution.

CORPORATESOCIAL RESPONSIBILITY INTIATIVES

As a socially responsible citizen, the Mahindra Group continues to contribute to the economic well being of the communities it interacts with and enhance their social well being. The Mahindra Group has incessantly been engaged in activities, which add value to the community around it.

Your Company has always been committed to the fact that, since corporations are vital organs of the society, corporate interests must address societal concerns for the sustainable development of the society and towards this end your Company has played an active role in discharging its social responsibilities. During the year under review, your Company continued to involve itself in social welfare activities by contributing to recognised Charitable Institutions, which specifically benefit the economically weaker and socially disadvantaged sections of the society. Your Company has sponsored 376 Nanhi Kalis, the flagship programme of the K.C. Mahindra Education Trust, which supports the education of the disadvantaged girl child.

Your Company organised a nationwide Blood Donation Drive to re-affirm its pledge to the society and collected 1,000 bottles of blood. During the year under review, your Company also donated funds for purchase of ambulance to numerous Charitable Institutions.

During the year under review, your Company contributed Rs.460.73 Lacs towards CSR to various Non- Governmental Organisations for charitable purposes.

ACHIEVEMENTS

During the year under review, your Company was awarded the NASSCOM IT User Awards 2012, the National Awards for IT Excellence, the Edge VD (Virtual Desktop) Award 2011, the Edge BI (Business Intelligence) Award 2011, SKOCH Digital Inclusion Award 2011, InfoSecurity Top 100 CISO Award 2011 and IT Next 100 (Future CIO) Award.

Your Company has won the Asia's Best Employer Brand Awards 2011 as well as the Award for Best Corporate Social Responsibility (CSR) Practices. The Company was also bestowed with the Indian Development Foundation CSR Award for its excellent contribution and support towards blanket mobilisation drive for leprosy patients in October, 2011. Your Company was ranked 4th in the Financial Services Sector by the Great Places to Work Institute.

DIRECTORS

Mr. Uday Y. Phadke resigned as the Vice-Chairman of the Company with effect from 24th October, 2011. Mr. Phadke continues to be a Non-Executive Director of the Company.

Mr. Uday Y. Phadke, Non-Executive Director and Mr. M. G. Bhide, Independent Director, retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-appointment.

CORPORATE GOVERNANCE

A report on Corporate Governance along with a certificate from the Auditors of the Company regarding the compliance with conditions of Corporate Governance as also the Management Discussion and Analysis Report as stipulated under Clause 49 of the Listing Agreement are annexed to this Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to section 217(2AA) of the Companies Act, 1956, your Directors, based on the representation received from the Operating Management, and after due enquiry, confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2012 and of the profit of the Company for the year ended on that date;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the annual accounts have been prepared on a going concern basis.

SUBSIDIARY COMPANIES

Mahindra Insurance Brokers Limited

The year under review represents the eighth year of insurance broking operations of your Company's

wholly-owned subsidiary Mahindra Insurance Brokers Ltd. (MIBL). During the year under review MIBL's Direct Broking license was renewed by the Insurance Regulatory and Development Authority (IRDA) with effect from 18th May, 2010 for a period of three years. The category of broker licence was subsequently upgraded from Direct to a Composite Broking licence, enabling MIBL to undertake Reinsurance broking business in addition to its existing Direct insurance broking for Life and Non-Life products.

During the year, MIBL crossed the 7,00,000 mark in terms of policies serviced, with a total of 7,03,730 policies for both Life and Non-Life Retail business lines. The customised Life Insurance covers "Mahindra Loan Suraksha" and "Sampoorna Suraksha" continued to receive an encouraging response and grew by 33 per cent from 2,73,138 lives covered with a Sum Assured of Rs.6,193.7 Crores in the Financial Year 2010-11 to 3,63,691 lives covered with a Sum Assured of Rs. 8,255.0 Crores in the Financial Year 2011-12, with a substantial portion being covered in the rural markets.

During the year, MIBL achieved a growth of 43.1 per cent in Net Premium generated for the Corporate and Retail business lines increasing from Rs.289.2 Crores (Gross Premium Rs. 318.6 Crores) in the Financial Year 2010-11 to Rs. 413.8 Crores (Gross Premium Rs.456.2 Crores) in the Financial Year 2011-12, crossing a milestone of Rs.400 Crores Gross Premium.

The Income decreased by 10.0 per cent from Rs.51.8 Crores in the Financial Year 2010-11 to Rs.46.6 Crores in the Financial Year 2011-12. The Profit Before Tax decreased by 38.9 per cent from Rs.32.9 Crores to Rs.20.1 Crores, and the Profit After Tax decreased by 38.0 per cent from Rs.21.8 Crores to Rs.13.5 Crores during the same period.

The decrease in Income and consequent decline in profits was due to the impact of the clarificatory Circular issued by the IRDA on Group Insurance Guidelines. The Guidelines became effective from 1st April 2011. MIBL has re-engineered its processes in line with the clarified Guidelines and has recommenced business income on the affected Group Insurance business, in December 2011.

Mahindra Rural Housing Finance Limited

Mahindra Rural Housing Finance Limited (MRHFL) has during the year ended 31st March, 2012, disbursed loans aggregating Rs. 266.75 Crores (previous year Rs. 203.63 Crores). The Profit After Tax for the year ended 31st March, 2012 was Rs. 11.91 Crores (previous year Rs. 8.86 Crores). The outstanding loan portfolio as on 31st March, 2012 stood at Rs. 535.23 Crores.

MRHFL continued its focus on serving customers in rural India. More than 90 percent of the loans disbursed were to customers in villages having an average annual household income of less than Rupees Two Lacs. During the year under review, over 32,000 households were given home loans. As against this, since inception, MRHFL had given loans to approximately 30,000 households till 31st March, 2011.

The housing loans sanctioned during the year ended 31st March, 2012 were Rs. 292.16 Crores as against Rs. 263.05 Crores sanctioned during the previous year. The cumulative loans sanctioned by MRHFL as at the end of the Financial Year 2011-12 was Rs. 718.44 Crores as compared to Rs. 426.28 Crores in the previous year. The cumulative loan disbursement at the end of the year stood at Rs. 607.36 Crores as compared to Rs. 340.61 Crores in the previous year.

MRHFL has been expanding its geographical presence, by leveraging the infrastructure of your Company, and currently operates in the states of Maharashtra, Gujarat, Rajasthan, Tamilnadu, Andhra Pradesh, Kerala, Karnataka and Madhya Pradesh.

Mahindra Business & Consulting Services Private Limited

Mahindra Business & Consulting Services Private Limited (MBCSPL) provides staffing services mainly for your Company and its subsidiaries viz. MIBL and MRHFL and the ultimate parent company, viz. Mahindra & Mahindra Limited. As at 31st March, 2012 MBCSPL had on its rolls 6,096 employees who were deputed to these companies to provide services under ongoing contracts.

MBCSPL earns its income in the form of fees towards staffing services. MBCSPL registered a Profit After Tax of Rs. 7.06 Lacs for the year ended 31st March, 2012 as compared to Rs. 54.43 Lacs in the previous year.

The Statement pursuant to section 212 of the Companies Act, 1956, containing details of the Company's subsidiaries is attached.

In accordance with the General Circular No. 2/2011 dated 8th February, 2011 issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies are not being attached to the Balance Sheet of the Company.

The Company Secretary will make available the Annual Accounts of the subsidiary companies and the related detailed information, upon receipt of request from any Member of the Company interested in obtaining the same. However, as directed by the Central Government, the financial data of the subsidiaries have been separately furnished forming part of the Annual Report. These documents will also be available for inspection at the Head Office of the Company and at the Office of the respective subsidiary companies, during working hours up to the date of the Annual General Meeting. The Company shall also put the details of accounts of individual subsidiary companies on its website www.mahindrafinance.com.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company and its three subsidiaries viz. MIBL, MRHFL and MBCSPL, prepared in accordance with Accounting Standard 21 prescribed by The Institute of Chartered Accountants of India, form part of this Annual Report. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies and its joint venture viz. Mahindra Finance USA LLC.

AUDITORS

Messrs. B. K. Khare & Co., Chartered Accountants, retire as Auditors of the Company at the forthcoming Annual General Meeting and have given their consent for re-appointment. The shareholders would be required to elect Auditors for the current year and fix their remuneration.

As required under the provisions of section 224(1B) of the Companies Act, 1956, the Company has obtained a written certificate from Messrs. B. K. Khare & Co., Chartered Accountants, to the effect that their re- appointment, if made, would be in conformity with the limits specified in the said section.

CONSERVATION OF ENERGY,TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to the energy conservation, technology absorption and foreign exchange earnings and outgo, as required under section 217(1 )(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in Annexure II to this Report.

PARTICULARS OF EMPLOYEES AS REQUIRED UNDER SECTION 217(2A) OF THE COMPANIES ACT,1956 AND THE RULES MADE THEREUNDER

The Company had three employees who were in receipt of remuneration of not less than Rs. 60,00,000 during the year ended 31st March, 2012 or not less than Rs. 5,00,000 per month during any part of the said year. However, as per the provisions of section 219(1)(b)(iv) of the Companies Act, 1956, the Directors' Report and Accounts are being sent to all the Shareholders of the Company excluding the Statement of particulars of employees. Any Shareholder interested in obtaining a copy of the Statement may write to the Company Secretary of the Company.

For and on behalf of the Board

Bharat Doshi Chairman

Mumbai, 23rd April, 2012

---

Mar 31, 2011

Dear Members,

The directors are pleased to present their twenty-first report together with the audited accounts of your company for the financial year ended 31st march, 2011. the summarised financial results of the company are given below:

financial results

(rs. in crores)

march 2011 march 2010

total income 2012.5 1568.8

less : finance costs 660.2 501.7

expenditure 634.1 536.6

depreciation/amortisation 15.8 9.9

total expenses 1310.1 1048.2

profit before tax 702.4 520.6

less : provision for tax

current tax 249.1 204.4

deferred tax (9.8) (28.2)

profit after tax for the year 463.1 344.4

add/less : (excess)/short provision for income-tax - – 1.7 earlier years (net)

balance profit after tax 463.1 342.7

add : amount brought forward from previous years 510.7 355.8

amount available for appropriation 973.8 698.5

appropriations :

general reserve 46.3 34.3

statutory reserve 92.6 68.5

proposed dividend on equity shares 104.0 72.7 income-tax on proposed dividend 17.3 12.3

surplus carried to balance sheet 713.6 510.7

973.8 698.5

Dividend

Your directors are pleased to recommend a dividend of rs. 10 per equity share, payable to those members whose names appear in the register of members as on the book closure date. the dividend including dividend tax will absorb a sum of rs. 121.3 crores (as against rs. 85.0 crores on account of dividend of rs. 7.50 per equity share, paid for the previous year).

operations

The overall disbursement registered a growth of 61.7 per cent at rs. 14,419.9 crores as compared to rs. 8,915.4 crores in the previous year. your company during the year under review, continued to diversify its product portfolio within its vehicle financing business as well as through the introduction and growth of other financial products and maintained its market leadership position in rural and semi-urban market. your company has increased its presence in financing of commercial vehicle, construction equipment, as well as, pre-owned vehicle while maintaining aggressive growth in car financing, retaining its leadership position in financing mahindra range of vehicles and tractors.

Income grew by 28.3 per cent to rs. 2,012.5 crores for the year ended 31st march, 2011 as compared to rs. 1,568.8 crores for the previous year. profit before tax was 34.9 per cent higher at rs. 702.4 crores as compared to rs. 520.6 crores for the previous year. profit after ta x grew at a healthy rate of 35.1 per cent to rs. 463.1 crores as compared to rs. 342.7 crores in the previous year.

your company has achieved a very important milestone of cumulatively financing over one and a half million customers since its inception. The number of contracts entered into by the company during the year was 3,67,774 as against 2,16,355 in the previous year.

During the year under review, the assets under management have crossed rs. 15,000 crores and stood at rs. 15,161.0 crores as at 31st march, 2011.

Distribution of mutual fund products

During the year under review, the activity of distribution of mutual fund products (mfp) was carried out across 17 branches covering 10 states.

The amount of mutual fund products outstanding through the company's advisory services, aggregate of institutional and retail segment crossed an amount of rs. 700 crores and the number of clients crossed 40,000.

management discussion and analysis report

a detailed discussion on the company's operations is presented in the chapter on management discussion and analysis, which forms part of this annual report.

Economy

The global economy continued to recover from the meltdown of 2008. the excess liquidity that arose due to programs such as quantitative easing ii of us and similar programs followed by most other central banks was the primary contributor to this recovery. however, towards the end of the year most central banks initiated steps to remove the excess liquidity and this is expected to drive up interest rates and might also affect capital flows to emerging markets.

The indian economy continued to maintain its high level of growth and in the financial year 2010-11 the gross domestic product grew by 8.5 per cent. the growth was broad-based across the various sectors of the economy and was driven by both domestic investment and consumption. the high growth of the auto sector (29 per cent) and increasing agricultural incomes were of importance to the company. liquidity became tight from june 2010 as a huge amount of over rs. 1,00,000 crores was removed on account of auction of 3g and wimax licenses. during the year, the inflation continued to be a big area of concern and was close to 10 per cent for the majority of the year, substantially above the reserve bank of india's (rbi) initial inflation target rate of 5.5 per cent. this led the rbi to increase the interest rate in a bid to tame inflation. the high interest rate scenario is expected to continue in the financial year 2011-12.

The semi-urban and rural markets, the focus areas of the company, continued to witness rapid growth. the various infrastructure projects executed across the country along with job guarantee schemes (such as mgnrega) led to increased job creation and enhanced demand for equipment and vehicles. while the high food prices were a concern in the urban areas, they led to a significant increase in farmer earnings. the combination of increased disposable incomes along with favourable demographics led to a robust demand for various products and services in these markets.

During the year under review, rbi followed a policy of calibrated tightening. this was justified by the trend of moderating inflation and consolidating growth in the second and third quarters of the financial year 2010-11. liquidity conditions remained abnormally tight for much of the year owing to a combination of structural and frictional factors. the liquidity adjustment facility (laf) corridor stayed almost entirely in the injection mode during the year under review. the rbi instituted a number of measures to ease the excessive tightness in the system.

There are signs that in recent months economic growth in india has become more broad-based with industrial growth displaying less volatility across sectors;agriculture has picked up due to good rabi season and service sector growth remained robust.

Finance

During the year under review, the reserve bank of india adopted a calibrated approach by hiking the repo rate seven times by 25 basis points each to contain the inflationary pressure and also introduced the base rate system from july 2010 which resulted in medium/long term interest rate moving up by approximately 175 basis points. tight liquidity conditions persisted throughout the year resulting in the short term money market rate increasing upward of 200 basis points. however, your company was able to reduce the impact of increase in interest rate by continuously monitoring asset liability management and following prudent asset liability management guidelines.

During the year under review, your company continued its innovative methods of sourcing funds in addition to regular borrowings like secured and unsecured debentures, term loans, commercial paper, etc., and maintained prudential asset/liability match through out the year. your company sourced long term loans from consortium banks at attractive rates and a proportion of the same was eligible for priority sector lending for banks. your company also issued subordinated debt amounting to rs. 200 crores and successfully assigned receivables to the tune of rs. 1,228 crores.

During the year, your company has actively participated in a number of international and domestic investor meets organised by reputed international banks and financial services companies.

your company also periodically conducted analysts' meets to communicate details of performance, important developments and exchange information.

Share capital

The members have by means of a postal ballot on 3rd january, 2011, approved the increase in the authorised share capital of the company from rs. 1,60,00,00,000 (rupees one hundred sixty crores) divided into 11,00,00,000 (eleven crores) equity shares of rs. 10 (rupees ten) each and 50,00,000 (fifty lacs) redeemable preference shares of rs. 100 (rupees hundred) each to rs.1,90,00,00,000 (rupees one hundred ninety crores) divided into 14,00,00,000 (fourteen crores) equity shares of rs. 10 (rupees ten) each and 50,00,000 (fifty lacs) redeemable preference shares of rs. 100 (rupees hundred) each, by the creation of additional 3,00,00,000 (three crores) equity shares of rs. 10 (rupees ten) each.

your company has allotted 9,69,005 equity shares of rs. 10 each to the trustees of the mahindra & mahindra financial services limited employees' stock option trust.

On 22nd february, 2011, your company successfully concluded the qualified institutions placement (qip) issue to qualified institutional buyers aggregating rs. 426.3 crores through the issue of 61,33,205 equity shares of the face value of rs. 10 each at a price of rs. 695 per equity share including a premium of rs. 685 per equity share, which is a 3.4 per cent premium to the price of rs. 672.75 per share, arrived at as per regulation 85 of securities and exchange board of india (issue of capital and disclosure requirements) regulations, 2009. the company received bids of approximately rs. 1,579.45 crores. despite it being launched in markets clouded by bearish sentiments, the first qip offering by your company received an overwhelming response, as seen by the high- levels of subscription and strong participation from international institutional investors.

your company has duly utilised the issue proceeds to augment its capital base, meet its capital requirements, for other general corporate purposes and for payment of issue expenses.

This is in line with the issue purpose mentioned in the placement document filed with various regulatory authorities.

Post allotment of equity shares as aforesaid, the issued, subscribed and paid-up share capital of the company stands at rs. 104 crores comprising of 10,40,02,735 equity shares of rs. 10 each fully paid-up.

capital adequacy

consequent upon the allotment of equity shares to the mahindra & mahindra financial services limited employees' stock option trust under the mahindra & mahindra financial services limited employees' stock option scheme 2010 and allotment of shares to qualified institutional buyers under the qualified institutions placement, the paid-up share capital of the company has increased to rs. 104.0 crores as on 31st march, 2011 from rs. 96.9 crores as on 31st march, 2010. the securities premium account has also increased to rs. 1,162.0 crores from rs. 749.6 crores.

As a result of the increased net worth, your company was able to enhance the capital to risk assets ratio (crar) to 20.3 per cent as on 31st march, 2011, which is well above 12.0 per cent crar prescribed by the reserve bank of india (rbi). pursuant to the recent notification no. dnbs.224/cgm (us) - 2011 dated 17th february, 2011 issued by the rbi all deposit taking nbfcs are required to maintain a minimum capital ratio consisting of tier i and tier ii capital, which shall not be less than 15 per cent of its aggregate risk weighted assets on balance sheet and risk adjusted value of off-balance sheet items, with effect from 31st march,2012.

Holding company

pursuant to the allotment of equity shares to the mahindra & mahindra financial services limited employees' stock option trust and the qualified institutional buyers under the qualified institutions placement, the shareholding of mahindra & mahindra limited, the holding company, stands reduced to 56.0 per cent from 60.1 per cent.

stock options

pursuant to the approval of the members by means of a postal ballot voting process on 18th september, 2010, your company has adopted and introduced the ‘mahindra & mahindra financial services limited employees' stock option scheme–2010' (esos-2010). on the recommendation of the remuneration/ compensation committee of your company, the trustees of the mahindra & mahindra financial services limited employees' stock option trust have granted 2,51,565 stock options to eligible employees under the esos -2010.

During the year under review, no new options have been granted under the ‘mahindra & mahindra financial services limited employees' stock option scheme–2005'.

Details required to be provided under the securities and exchange board of india (employee stock option scheme and employee stock purchase scheme) guidelines, 1999 are set out in annexure i to this report.

Rbi guidelines

The company has complied with all the applicable regulations of the reserve bank of india (rbi). as a prudent practice, your company makes accelerated provisioning for non performing assets (npas) than that required by rbi for nbfcs.

standard assets' provisioning

pursuant to the notification no. dnbs.222/cgm (us)-2011 dated 17th january, 2011 issued by

The rbi for making a general provision at 0.25 per cent on the outstanding standard assets of nbfcs, your company has made a provision of rs. 31.4 crores for the year ended 31st march, 2011, towards the same.

credit rating

During the year under review, crisil limited, has after due consideration, upgraded the rating to your company's long-term debt instruments and bank facilities from ‘aa-/sTable' to ‘aa / sTable' and your company's fixed deposit programme from ‘faa/sTable' to ‘faaa/sTable', respectively. the ‘aa /sTable' rating indicates a high degree of safety with regard to timely payment of financial obligations. the rating on the company's short-term debt and bank loans has been re-affirmed at ‘p1 ' - which is the highest level of rating.

Fitch ratings india private limited, has during the year under review, re-affirmed the ‘aa(ind)' ratings with the outlook as positive assigned to the company's national long-term rating instrument and lower tier ii subordinated debt programme. the ‘aa (ind)' national ratings denote a very strong credit risk relative to other issuers or issues in the country. the credit risk inherent in these financial commitments differs only slightly from the country's highest rated issuers or issues.

Brickworks ratings india private limited, has during the year, re-affirmed the "bwr aa " rating with positive outlook to the company's long-term subordinated debt issue. instruments with this rating are considered to offer high credit quality in terms of timely servicing of debt obligation.

fixed deposits and loans/ advances

your company has started accepting fixed deposits from the public with effect from 1st january, 2009 and has mobilised funds to the tune of rs. 943 crores, with an investor base of over 80,000 investors.

your company has initiated various measures towards improvement of service levels to the fixed deposit holders. as a customer centric process, the company normally despatches the post-dated repayment cheques in respect of all the deposits, well in advance, before the maturity date to the depositors.

As at 31st march, 2011, 436 deposits amounting to rs. 2.1 crores had matured for payment and were due to be claimed or renewed. subsequent to the year end, as on 25th april, 2011, 293 deposits amounting to rs. 1.2 crores had matured for payment and were due to be claimed or renewed.

The particulars of loans/advances and investment in its own shares by listed companies, their subsidiaries, associates, etc., required to be disclosed in the annual accounts of the company pursuant to clause 32 of the listing agreement with the company are furnished separately.

sustainability initiatives

In 2007-08, your company had participated in the mahindra group's ‘sustainability' initiatives and was part of the group's first sustainability review, which is a voluntary report setting out the company's commitment to the environment and society, while generating profits. this report was released by mahindra & mahindra limited (m&m) in october 2008 and the shareholders were informed of this initiative in the previous year's directors' report.

In october 2009, the second mahindra sustainability review for the year 2008-09 was published by m&m, wherein information about your company's performance on the three bottom lines - i.e. people, planet and profit, was also included. this report was externally assured by ernst & young and rated with the highest level of a and gri checked. this second report reflects your company's progression in this journey and its commitment to taking a more responsible and holistic approach to business in general.

During the year, your company has taken certain initiatives in this direction and created awareness through the sustainability mantra. your company as a step towards ‘green initiative' has continued to formulate innovative methods of hybrid power solution through installation of wind and solar based alternative sources of power in some of its branches in rural and semi-urban areas to overcome chronic power shortage. your company made proactive efforts to fight against global warming by conducting a "tree plantation" programme across india and planted close to 55,000 trees across the country.

your company continued with its focus on enhancing the concept of sustainability in the minds of its employees, vendors, suppliers and customers. your company organised ‘sustainability week' in february 2011, which included inter alia, the concept of gifting plants, no print day, air condition bandh day, car pool day, batti bandh day and plastic free day. various initiatives were also taken for conservation of water and energy, reduction of noise pollution and paper consumption. services to various non-governmental organisations were taken up all year round.

corporate social responsibility initiatives

your company has always been sensitive to the fact that, since corporations are fundamental members of the society, corporate interests must address societal concerns and has played an active role in discharging its social responsibilities. during the year under review, your company continued to involve itself in social welfare activities by contributing to recognised chariTable institutions, which specifically benefit the economically weaker and socially disadvantaged sections of the society. your company has sponsored 735 nanhi kalis, the flagship programme of the k.c. mahindra education trust, which supports the education of the disadvantaged girl child.

your company organised a nationwide blood donation drive to re-affirm its pledge to the society and collected 1,408 bottles of blood. during the year under review, your company also donated funds for purchase of ambulance to bharat vikas parishad, liver foundation, jawaharlal nehru cancer hospital & research centre, janakeeya samithi (arogyam), shree aniruddha upasana foundation, aastha old age hospital & hospice, nirmala samaj kendra and manav seva sangh.

During the year under review, your company contributed rs. 3.4 crores towards csr to various institutions for chariTable purposes.

Achievements

your company has won several awards including the idc enterprise innovation awards, 2010, the edge [enterprises driving growth & excellence through it] 2010 award, the skoch financial inclusion award, in addition to winning thirteen awards in various categories of asia's best employer brand awards by the world hrd congress.

your company was also awarded the aima- iocl award for best motivational practice in manufacturing & services 2010 – service industry and csr awards – indy's – star of the industry award for "best practices in corporate social responsibilities".

Directors

Mr. Anjanikumar choudhari and Mr. m.b.n. rao resigned as directors of the company with effect from 22nd april, 2010 and 22nd october, 2010, respectively. the board has placed on record its sincere appreciation for the valuable services rendered and guidance received from Mr. anjanikumar choudhari and Mr. m.b.n. rao as directors of the company.

Mr. Piyush mankad and ms. rama bijapurkar, independent directors, retire by rotation at the forthcoming annual general meeting and, being eligible, offer themselves for re-appointment.

The term of office of Mr. ramesh iyer as the managing director of the company would come to an end on 29th april, 2011. Mr. iyer was re-appointed as the managing director of the company for a further period of five years effective from 30th april, 2011 to 29th april, 2016 at the meeting of the board of directors of the company held on 25th april, 2011.

corporate governance

A report on corporate governance along with a certificate from the auditors of the company regarding the compliance with conditions of

corporate governance as also the management discussion and analysis report as stipulated under clause 49 of the listing agreement is annexed to this report.

Directors' responsibility statement

pursuant to section 217(2aa) of the companies act, 1956, your directors, based on the representation received from the operating management, and after due enquiry, confirm that:

i) In the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) They have, in the selection of the accounting policies, consulted the statutory auditors and these have been applied consistently and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the company as at 31st march, 2011 and of the profit of the company for the year ended on that date;

iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the companies act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) The annual accounts have been prepared on a going concern basis.

joint venture

During the year under review, your company has entered into a joint venture with de lage landen financial services inc., (dllfs) a wholly- owned subsidiary of the rabobank group, for setting up a joint venture company viz. mahindra finance usa llc., a state of delaware limited liability company, to inter alia, provide wholesale inventory financing to us based dealers, to finance dealer purchases of mahindra products and to provide retail financing to end-user customers to finance their lease or purchase of mahindra products or used products from dealers, in usa. your company holds 49 per cent of the equity capital of mahindra finance usa llc., the balance 51 per cent being held by dllfs.

dllfs is a global provider of high-quality asset- based financing products headquartered in eindhoven, netherlands and is triple-a rated by the major rating agencies moody's and standard & poor's, with offices and joint ventures in more than 35 countries in europe, north america, south america, asia and australia. dllfs offers lease and financial products for businesses and consumers. the global offering also includes an array of commercial financial solutions.

your company has received the ‘no objection certificate' from the reserve bank of india for setting up the said joint venture and has made an initial investment of approximately rs. 22.8 crores (us$ 5.02 million) in mahindra finance usa, llc.

subsidiary companies

mahindra insurance brokers limited

The business of direct insurance broking for life and non-life products is carried out by your company's wholly-owned subsidiary, mahindra insurance brokers limited (mibl). the year under review represents the seventh year of mibl's insurance broking operations. during the year under review mibl has received its insurance broking license duly renewed with effect from 18th may, 2010 for a period of three years, from the insurance regulatory and development authority.

During the year, mibl crossed the 5,00,000 mark in terms of policies serviced, with a total of 5,08,878 polices for both life and non- life retail business lines. the customised life insurance cover "mahindra loan suraksha" (mls) continued to receive an encouraging response and grew by 87.7 per cent from 1,47,154 lives covered with a sum assured of rs. 3,518.4 crores in the financial year 2009-10 to 2,76,198 lives covered with a sum assured of rs. 6,271.8 crores in the financial year 2010-11, with a substantial portion being covered in the rural markets.

mibl achieved a growth of 55.2 per cent in net premium generated for the corporate and retail business lines, increasing from rs. 186.3 crores (gross premium rs. 202.7 crores) in the financial year 2009-10 to rs. 289.2 crores (gross premium rs. 318.6 crores) in the financial year 2010-11,crossing a milestone of rs. 300 crores gross premium.

The income increased by 65.0 per cent from rs. 31.4 crores in the financial year 2009-10 to rs. 51.8 crores in the financial year 2010-11. the profit before tax increased by 95.8 per cent from rs. 16.8 crores to rs. 32.9 crores, and the profit after tax increased by 96.4 per cent from rs. 11.1 crores to rs. 21.8 crores during the same period.

mahindra rural housing finance limited

mahindra rural housing finance limited (Mrhfl) in the fourth year of its operations disbursed loans aggregating rs. 203.6 crores (previous year rs. 90.6 crores), covering over 21,000 families. the profit after tax for the year ended 31st march, 2011 was rs. 8.9 crores (previous year rs. 2.2 crores). the outstanding loan portfolio as at 31st march, 2011 stood at rs. 315.3 crores.

The housing loans sanctioned during the year ended 31st march, 2011 were to the extent of rs. 263.1 crores as against rs. 107.2 crores sanctioned during the previous year. the cumulative loans sanctioned by Mrhfl as at the end of financial year 2010-11 was rs. 426.3 crores as compared to rs. 163.2 crores in the previous year. the cumulative loan disbursement at the end of the year stood at rs. 340.6 crores as compared to rs. 137.0 crores in the previous year.

Mrhfl has been successful in establishing its presence in the rural and semi-urban areas by leveraging the branch network of your company. during the year, operations were strengthened in the states of maharashtra, gujarat, rajasthan, tamil nadu, andhra pradesh, kerala, karnataka and madhya pradesh.

During the year, Mrhfl was able to secure a great deal of support and guidance from national housing bank.

mahindra business & consulting services private limited

mahindra business & consulting services private limited (mbcspl) has mainly sourced 4,739 employees for your company and its subsidiaries viz. mibl and Mrhfl. the company earns its income in the form of fees towards staffing services. mbcspl registered a profit after tax of rs. 0.5 crores for the year ended 31st march, 2011 as compared to rs. 0.1 crore in the previous year.

The statement pursuant to section 212 of the companies act, 1956, containing details of the company's subsidiaries is attached.

The consolidated financial statements of the company, its three subsidiaries viz. mibl, Mrhfl and mbcspl and the joint venture viz. mahindra finance usa llc, prepared in accordance with accounting standard 21 prescribed by the institute of chartered accountants of india, form part of the annual report.

Pursuant to general circular no. 2/2011 dated 8th february, 2011 issued by the ministry of corporate affairs, granting a general permission to the companies from attaching the annual reports of subsidiaries from the current financial year and in terms of the resolution passed by the board of directors of the company at its meeting held on 2nd march, 2011, copy of the balance sheet, profit and loss account, reports of the board of directors and auditors of the subsidiaries have not been attached to the balance sheet of the company.

The company secretary will make these documents available upon receipt of request from any member of the company interested in obtaining the same. however, as directed by the central government, the financial data of the subsidiaries have been separately furnished forming part of the annual report. these documents will also be available for inspection at the head office of the company and at the office of the respective subsidiary companies, during working hours up to the date of the annual general meeting. the company shall also put the details of accounts of individual subsidiary companies on its website www.mahindrafinance.com.

Auditors

messrs. b. k. khare & co., chartered accountants, retire as auditors of the company at the forthcoming annual general meeting and have given their consent for re-appointment. the shareholders will be required to elect auditors for the current year and fix their remuneration.

As required under the provisions of section 224 (1b) of the companies act, 1956, the company has obtained a written certificate from messrs. b. k. khare & co., chartered accountants, to the effect that their re-appointment, if made, would be in conformity with the limits specified in the said section.

conservation of energy, technology absorption and foreign exchange earnings and outgo

the particulars relating to the energy conservation, technology absorption and foreign exchange earnings and outgo, as required under section 217(1)(e) of the companies act, 1956 read with the companies (disclosure of particulars in the report of board of directors) rules, 1988 are given in annexure ii to this report.

particulars of employees as required under section 217(2a) of the companies act, 1956 and the rules made thereunder

the company had two employees who were in receipt of remuneration of not less than rs. 60,00,000 during the year ended 31st march, 2011 or not less than rs. 5,00,000 per month during any part of the said year. however, as per the provisions of section 219(1)(b)(iv) of the companies act, 1956, the directors' report and accounts are being sent to all the shareholders of the company excluding the statement of particulars of employees. any shareholder interested in obtaining a copy of the statement may write to the company secretary of the company.

for and on behalf of the board

Bharat Doshi chairman

Mumbai, 25th april, 2011

---

Mar 31, 2010

The Directors present their Twenty-third Annual Report together with the audited accounts of your Company for the year ended 31st March 2010.

FINANCIAL RESULTS

Rs. in Million

For the year ended 31st March 2010 2009

Income 45,747 43,153

Profit before interest, depreciation and tax 11,726 12,005

Interest (1,600) (25)

Profit before depreciation and tax 10,126 11,980

Depreciation (1,299) (1,074)

Profit before tax 8,827 10,905

Provision for taxation (1,314) (1,039)

Profit after tax before non-recurring / exceptionalitems 7,513 9,866

Non-recurring / exceptional items (85) --

Profit for the year after tax and non- recurring / exceptional items 7,428 9,866

Balance brought forward from previous year 13,497 5,202

Profit available for appropriation 20,925 15,068

Transfer to Debenture Redemption Reserve (1,935) --

Dividend - Final (paid for the year 2007-08)* - (1)

- Interim (Paid) - (487)

- Final (Proposed) (428) --

Tax on dividend - On interim dividend - (83)

- On final dividend (73) --

Transfer to General Reserve (750) (1,000)

Balance carried forward 17,739 13,947

* In respect of equity shares allotted pursuant to ESOP, after 31st March 2008 and before the record date.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 3.50 per Equity Share, payable to those Shareholders whose names appear in the Register of Members as on the Book Closure Date.

The equity dividend for the financial year 2009-10, inclusive of tax on distributed profits would absorb Rs. 501 Million (Rs. 570 Million for the previous year at Rs. 4.00 per Equity Share).

CHANGES IN SHARE CAPITAL

During the year under review, your Company allotted 586,480 equity shares of the face value of Rs. 10 each on the exercise of stock options under its various Employee Stock Option Plans and consequently the number of issued, subscribed and paid-up equity shares has increased from 121,733,634 equity shares to 122,320,114 equity shares of Rs.10 each aggregating Rs. 1,223,201,140.

BUSINESS PERFORMANCE / FINANCIAL OVERVIEW

Your Company is a leading provider of IT, Network Technology solutions and BPO services to the telecommunications industry in India. During the year, your Company was ranked by NASSCOM as the fifth largest Indian IT services company, in terms of export revenues and Voice & Data (V&D100, June 2009) ranked your Company as the number one company in telecom software services in India. Your Company has augmented its capabilities by adding service offerings in IT and other areas in which its customers have significant expenses. Your Companys strategy is now based on the "six pillars" of significant expenditure within its customer base namely, IT applications, Network Technology Solutions and Services, BPO, Infrastructure Management Services, Security Services and Value Added Services. Your Companys services span a wide range, from applications development and maintenance, solution integration, network services, remote infrastructure management, BPO, product engineering and lifecycle management and testing to high end, higher vaJue added offerings such as consulting, managed platforms and managed services. Your Company provides these services to its clients in the form of telecommunications specific offerings and through a delivery model which efficiently combines service delivery with domain knowledge.

Your Company has emerged as the leading telecommunications focused BPO company which caters to the diverse needs of the telecommunications eco-system.Your Company continues to invest in developing service offerings in areas like network services, infrastructure management, security services and VAS.

During the year under review, your Company has also been able to address the various technological changes in the industry, and has invested in the ability to provide solutions that support voice- data convergent systems and next generation services. Your Companys capabilities have been strengthened through its involvement in major transformation initiatives of its key customers.

During the year under review, your Company has also broadened its relationship with its key customers by expanding its service offerings to cover a wide range of the customers businesses.

As a result of continued focus on its sales & marketing strategy, your Company has developed a 3-layered marketing and delivery structure which enables it to be more responsive to its customers needs. Such a delivery has enabled faster execution of client engagements, delivery of quality of services and facilitated the efficient use of the resource pool.

Your Company now has 13 delivery centers supported by the competency and solutions units and it strongly believes that this model enables it to deliver superior solutions to its clients. Your Company has offices in 25 countries and has clients in over 40 countries.

During the year under review, total income increased to Rs. 45,747 Million from Rs. 43,153 Million in the previous year, a growth of 6%. On a consolidated level, total income increased to Rs. 47,008 Million from Rs. 44,269 Million in the previous year.

During the year, 58.6% of your Companys revenue came from Europe, 29.4% came from USA and 12.0% came from Rest of the World (ROW).

The Profit before interest, depreciation and tax amounts to Rs. 11,726 Million (26% of income) as against Rs. 12,004 Million (28% of income) in the previous year.

As you are aware, during the year your Company acquired a 42.67% shareholding in Satyam Computer Services Limited (Satyam) through Venturbay Consultants Private Limited (Venturbay), a wholly owned subsidiary of your Company with an investment of Rs. 29,695 Million, which was partly funded by borrowings. Consequently, Interest cost during the year substantially increased to Rs. 1,600 Million as dompared to Rs. 25 Million in the previous year.

The Profit before depreciation of your Company stood at Rs. 10,126 Million (which amounts to 22% of its income) as against Rs. 11,980 Million (28% of income) in the previous year.

Profit after tax, before exceptional items was lower at Rs. 7,513 Million as against Rs. 9,866 Million in the previous year. On a consolidated level, profit after tax, before exceptional items stood at Rs. 7,117 Million as against Rs. 10,146 Million in the previous year. A major reason of a low Profit after tax this year was the huge interest cost of Rs.1600 Million on moneys borrowed for Satyam acquisition.

UPDATE ON SATYAM

As reported in the previous years Directors Report, your Company participated in the Satyam bidding process, through its wholly owned subsidiary, Venturbay, and was declared as the highest bidder on 13th April 2009 and as the winning bidder post approval by the Honourable Company Law Board on 16th April 2009.

Satyam is one of the largest Indian IT software and services companies with a well-diversified client base spread across Banking, Financial Services & Insurance (BFSI), manufacturing, retail, transport, logistics, telecom, media, healthcare and pharma etc. The Company believes that the acquisition presented a compelling strategic opportunity. The rationale behind the acquisition was :

Diversification into multiple verticals like Banking and Insurance, Manufacturing and Retail

Ability to offer a wider range of service offerings like Enterprise Services and Engineering Services to current and future customers

Derisked business model with balanced exposure across geographies and currencies

Utilize Mahindra Satyams pool of highly experienced, well- trained professional employees

Scale benefits due to substantially larger size of the business

Post acquisition, the new management of Satyam has brought about significant changes in operating policies and procedure to facilitate the revival of the company.

The consolidated financial statements included in this report do not include the financial statements of Satyam and its subsidiaries as Satyam is in the process of restating its financials. The Honourable Company Law Board vide its order dated 15th October 2009 has given extension of time to Satyam for filing of returns/ documents which are required to be filed with various statutory authorities under various statues, whether already due, or to become due, upto 30th June 2010.

RECENT MATERIAL CHANGES

During the year, pursuant to an agreement, Mahindra-BT Investment Company (Mauritius) Limited (MBTM), a subsidiary of your parent company, Mahindra & Mahindra Limited (M&M) sold 98,70,912 Equity Shares of your Company aggregating 8.07% of its paid-up Equity Share Capital.

Following the said sale, the Shareholding of M&M alongwith its subsidiary MBTM in your Company stands reduced to 44.01%, resulting in your Company ceasing to be a subsidiary of M&M.

Consequently, the subsidiaries of your Company, viz. Mahindra Logisoft Business Solutions Limited,Tech Mahindra (Americas) Inc., Tech Mahindra GmbH,Tech Mahindra (Singapore) Pte. Limited,Tech Mahindra (Thailand) Limited, Tech Mahindra Foundation, PT Tech Mahindra Indonesia, CanvasM Technologies Limited, CanvasM (Americas) Inc., Tech Mahindra (Malaysia) Sdn. Bhd,Tech Mahindra (Beijing) IT Services Limited, Tech Mahindra (Nigeria) Limited, Tech Mahindra (Bahrain) Limited (S.P.C.) and Venturbay Consultants Private Limited have also ceased to be subsidiaries of M&M.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed analysis of your Companys performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

QUALITY

Your Company continues its focus on quality through a very robust process framework implementation. Continuous process improvements in developing solutions that meet client expectations is a way of life in your Company. The objective is to ensure greater customer satisfaction through improved quality, higher productivity and reduced cycle time.

This was further strengthened during the year under review, as your Company achieved another accreditation on the global standard for Business Continuity Management BS25999:2008 in addition to the Information Security standard ISO/IEC27001:2005 and other accreditations like ISO 9001:2008, ISO/IEC 20000-1:2005, SEI-CMMI Level 5 v1.2, P-CMM Level 5 and SSE-CMM Level 3. Your Company is the third in the world to have been appraised for SSE-CMM Level 3.

HUMAN RESOURCES

During the Financial Year 2009-10, your Company, along with its subsidiaries, made a net addition of 8,552 to its workforce. The strength was 33,524 as at 31st March 2010, as compared to 24,972 a year before, registering an increase of 34%. BPO headcount included in this figure also registered a growth of 114 % as the headcount went up to 8,067 from 3,769, a year before.

Talent Management

Your Company believes in nurturing talent, motivating indigenous innovation and promoting leadership development. Your Companys talent management and leadership development programs have been running for several years and your Companys employees look forward to participating in them.

This year, your Company initiated two new talent management programs.The Mature Talent program is designed to tap the talent which employees bring in from different industries.The participants in this program are typically employees who have experience in other industries and which help incubate best practices across industries. The Yuva Neta (YuN) program will focus on mentoring your Companys young graduate leaders at an early stage of their career.

The Global Leadership Cadre (GLC) program, which your Company has been running for the past five years, continues to infuse fresh ideas and young talent into your Company. Participants in this program are typically management graduates from Tier I Business institutes across the globe and select technical specialists from within the organization. These highly talented participants have demonstrated the ability to learn quickly and we have been able to provide them faster career progression.This program has helped your Company to create a pool of highly talented candidates who can also be successors to senior management in the organization.

Complementing the GLC program is the Management Trainee (MT) program in which candidates from Business Schools across India are recruited and groomed for future GLC roles.

SUBSIDIARY COMPANIES

As reported earlier, your Company participated in the Satyam bidding process, through its wholly owned subsidiary, Venturbay, and was declared as the highest bidder on 13th April 2009 and as the winning bidder post approval by the Honourable Company Law Board on 16th April 2009. In order to fund Venturbays investment into Satyam, your Company infused Rs. 30,461 Million in Venturbay during the year under review.

During the year under review, your Company acquired the entire share capital of Mahindra Logisoft Business Solutions Limited (MLBSL). Consequently, MLBSL became a wholly owned subsidiary of your Company w.e.f. 11th April 2009.

During the year under review, Tech Mahindra (Nigeria) Limited and Tech Mahindra (Bahrain) Limited (S.P.C.) became subsidiaries of your Company.

As on 31st March 2010, your Company had 14 subsidiaries, including one step-down subsidiary.There has not been any material change in the nature of the business of the subsidiaries. As required under the Listing Agreements with the Stock Exchanges, the Consolidated Financial Statements of your Company and all its subsidiaries are attached. The Consolidated Financial Statements have been prepared in accordance with Accounting Standards AS 21, AS 23 and AS 27 issued by The Institute of Chartered Accountants of India and show the financial resources, assets, liabilities, income, profits and other details of your Company and its subsidiaries and associate companies as a single entity, after elimination of minority interest. The consolidated financial statements included in this report do not include the financial statements of Satyam and its subsidiaries as Satyam is in the process of restating its financials.

The Company has made an application to the Ministry of Corporate Affairs seeking exemption from attaching the copy of Balance Sheet, Profit and Loss Accoupt, Reports of the Board of Directors and Auditors of the subsidiaries with the Balance Sheet of the Company. If, in terms of approval granted by the Ministry of Corporate Affairs under section 212(8) of the Companies Act, 1956, the Copy of the Balance Sheet, etc. of the subsidiaries are not required to be attached with the Balance Sheet of the Company, the Company Secretary will make these documents available upon receipt of request from any member of the Company interested in obtaining the same. These documents will be available at Registered Office / Corporate Office of the Company and the office of the respective subsidiary companies, during working hours up to the date of the Annual General Meeting.

EMPLOYEE STOCK OPTION PLAN

Details required to be provided under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are set out in Annexure I to this Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company is committed to play its role as an enlightened corporate citizen and continued to earmark 1% of its Profit After Tax (PAT) every year on CSR activities. Going forward, your Company proposes to increase this contribution to 1.5% of its PAT every year. CSR activities are mainly carried through Tech Mahindra Foundation (TMF).TMF focuses on activities for Social and Inclusive Development mainly in the area of education, particularly education of the girl child. The Foundation has a corpus of Rs. 389 Million and has spent approximately Rs. 72 Million during the year under review to achieve its objectives.

The Foundation seeks to make a contribution towards provision of quality education and vocational skills to the economically disadvantaged, physically challenged and other vulnerable sections of society. Women empowerment and the educational needs of the girl child are special areas of concern to TMF. Recognizing that the great majority of children from under-privileged background study in municipal schools, TMF seeks to work towards improvement of these schools. Aware that youth who have studied in vernacular schools are often handicapped in their efforts to move ahead on account of lack of English language skills, TMF is endeavoring to help them meet this challenge.

During the year under review, the Foundation selected several new not-for-profit organizations spread over Pune, Mumbai, Noida, Delhi and Bangalore. It now works with 50 NGOs enabling it to reach out to many more children, with special attention to the educational needs of such vulnerable sections as girls from economically disadvantaged minority families.

TMF has made a special effort to link up with organizations making innovative use of technology to reach out to the needs of the physically, particularly visually challenged. TMF has also partnered with many vocational training institutes to give loans and scholarships which would help economically challenged but deserving students to pursue their education.

TMF continued to honour outstanding teachers and principals working in the Municipal schools of Delhi. These were selected through a rigorous and independent process. Mr. Vineet Nayyar, Vice Chairman of your Company and Director of TMF distributed the awards to 30 teachers on 7th April 2010 at a ceremony attended by the Municipal Commissioner of Delhi.

There is an increasing amount of interest shown by our employees to volunteer and utilise their free time to help partner NGOs of the Foundation.

The ESRO (Employee Social Responsibility Options) initiative, which was launched during the year under review by your Company in collaboration with TMF has had employees presenting proposals for supporting NGOs/charitable organizations working in the fields of education, health, environment and child welfare with your Company providing financial aid to these organizations.

SUSTAINABILITY

As a part of a responsible business Group having a global presences, your Company has taken considerable steps in responding to the challenges of Climate Change and Global Warming and transparently reporting its Sustainability or the triple bottom line performance i.e. performance towards the environmental, societal as well as economic aspects, so as to create sustainable value for all its stakeholders.

Your Company has been participating in the Sustainability Reporting of the Mahindra Group since FY 2007-08. During the year under review the 2nd Sustainability Report for the year 2008-09 was released. Both these reports were in accordance with the latest guidelines of the internationally accepted, Global Reporting Initiative (GRI). This report was assured by Ernst & Young and conforms to the highest level for reporting Sustainability performance, which is A+.The report and the performance rating of A+ was checked and confirmed by GRI. *(GRI is a Netherlands based multi-stakeholder network of thousands of experts worldwide, which has pioneered the development of the worlds most widely used sustainability reporting framework. United Nations is one of its key stakeholders. This reporting framework sets out the principles and indicators that organizations can use to measure and report their economic, environmental, and social performance.) The detailed Group Sustainability Reports are available on the website http://www.mahindra.com/sustainability/ sustainability-index.html

In order to take a structured path for reducing its carbon footprint, your Company has developed a 5 Year Sustainability Road map. This would help in consciously reducing GHG emissions and waste, as well as conserve water, bio-diversity and natural resources. Hence during the FY 09-10 concerted efforts were made to ensure that the targets are met over the committed time horizon with the following thrust areas:

• The new Campus at Hinjewadi near Pune, has been developed with a focus on Sustainability principles, the important ones being

Renewable energy using Wind & Solar for generating electricity for the utility block.

Rainwater Harvesting & Sewage Treatment Plant.

Eco-friendly e-waste disposal systems.

• Since awareness of these challenges is a major issue, focused efforts were made to enhance the awareness of employees as well communities around which we operate by conducting simple online tests to organizing Green walkathon & Cycle rallies and training school teachers on Climate Change & Environment who in-turn educate the children on these concerns.

Carbon foot-printing exercise to inventorize GHG emissions from all our business operations, under scope I, II & III emissions as per internationally accepted standards was carried out. This will enable us to baseline data on our emissions and undertake initiatives towards improving performance in this area.

These will be reported in our 3rd Sustainability Report, which will be released shortly.

CORPORATE GOVERNANCE PHILOSOPHY

Your Company believes that Corporate Governance is a voluntary code of self-discipline. In line with this philosophy, it follows healthy Corporate Governance practices and reports to the shareholders the progress made on the various measures undertaken. Your Directors have reported the initiatives on Corporate Governance adopted by your Company in the section Corporate Governance in the Annual Report.

DIRECTORS

Mr. Vineet Nayyar, Mr. Ulhas N. Yargop and Hon. Akash Paul retire by rotation and being eligible, offer themselves for re-appointment.

During the year under review, Mr. Clive Goodwin and Mr. Arun Seth, nominees of British Telecommunications pic. resigned as directors with effect from 22nd January 2010. Mr. Paul Ringham, who was the Alternate Director to Mr. Clive Goodwin, also relinquished his office with effect from 22nd January 2010. Mr. Al-Noor Ramji, nominee of British Telecommunications pic, resigned as a Director with effect from 31st March 2010.The Board places on record its sincere appreciation for the services rendered by Mr. Goodwin, Mr. Seth, Mr. Ringham and Mr. Ramji to the Company.

Mr. Nigel Stagg and Mr. Richard Cameron, nominees of British Telecommunications pic. were appointed as Directors in the vacancy caused by the resignation of Mr. Clive Goodwin and Mr. Arun Seth at the Meeting of the Board of Directors held on 22nd January 2010.

Mr. Nigel Stagg holds office upto the date of the forthcoming Annual General Meeting as Mr. Clive Goodwin, in whose place he has been appointed, would have retired by rotation at the forthcoming Annual General Meeting.

The Company has received a Notice from a Member under section 257 of the Companies Act, 1956, signifying his intention to propose Mr. Nigel Stagg for the office of Director.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to section 217(2AA) of the Companies Act, 1956, your Directors, based on the representation received from the Operating

Management and after due enquiry, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed;

ii. they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March 2010 and of the profit of the Company for the year ended on that date;

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts have been prepared on a going concern basis.

AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, the Auditors of your Company, hold office up to the conclusion of the forthcoming Annual General Meeting of the Company and have given their consent for re-appointment. The shareholders will be required to elect auditors for the current year and fix their remuneration. Your Company has received a written confirmation from M/s. Deloitte Haskins & Sells, Chartered Accountants to the effect that their appointment, if made, would be in conformity with the limits prescribed in Section 224 of the Companies Act, 1956. The Board recommends the re-appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants as the Auditors of the Company.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

In view of the nature of activities that are being carried on by your Company, Rules 2A and 2B of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, concerning conservation of energy and technology absorption, respectively are not applicable to your Company. Your Company being a software solution provider requires minimal energy consumption and every endeavour has been made to ensure the optimal use of energy, avoid wastage and conserve energy as far as possible.

FOREIGN EXCHANGE EARNINGS AND OUTGO

The foreign exchange earnings of your Company during the year were Rs. 51,265 Million (Previous Year Rs. 42,792 Million), while the outgoings were Rs. 17,726 (Previous Year Rs. 15,554 Million). During the year under the review, 96.90 % of your Companys revenues were derived from exports.

PARTICULARS OF EMPLOYEES

The information required under Section 217(2A) of the Act and the Rules made thereunder, is provided in an Annexure to this Report. However, as per the provisions of Section 19(1)(b)(iv) of the Companies Act, 1956, the Directors Report being sent to the shareholders does not include this Annexure. Any shareholder interested in perusing a copy of the Annexure may write to the Company Secretary at the Registered Office / Corporate Office of the Company.

DEPOSITS AND LOANS/ADVANCES

Your Company has not accepted any deposits from the public or its employees during the year under review. The particulars of loans/advances and investment in its own shares by listed companies, their subsidiaries, associates, etc., required to be disclosed in the annual accounts of the Company pursuant to Clause 32 of the Listing Agreement are furnished separately.

AWARDS/RECOGNITION

Your Company continued its quest for excellence in its chosen area of business to emerge as a true global brand. Several awards and rankings continue to endorse your Company as a thought leader in telecom industry.

Awards for the year

AT&T 2010 Supplier Award :TechM was one of the six vendors and only IT Company to win the award.

Best System Integrator Award 2010 by CMAI & INFOCOMs National Telecom Awards 2010

• Leapvault Change Management Leadership Award 2010 for the acquisition of Satyam

Amity Excellence Award for strategic HR for the year 2009

Voice & Data ranked Tech Mahindra 1st in the "Telecom Software" category in V&D 100 Ranking 2009

IAOP ranked Tech Mahindra in the Leaders Category in the Annual Listing of the Worlds Best Outsourcing Service Providers the 2010 Global Outsourcing 100 - "2010 Global Outsourcing 100"

Gartner ranked Tech Mahindra 11th largest TOMS Vendor in Market Share: Telecoms Operations Management Systems - Worldwide, 2006-2008, May 2009

NASSCOM ranked Tech Mahindra amongst the top 50 NASSCOM Innovators for the Year 2009

ACKNOWLEDGEMENTS

Your Directors gratefully acknowledge the contributions made by employees towards the success of your Company. Your Directors are also thankful for the co-operation and assistance received from its customers, vendors, bankers, regulatory and Governmental authorities in India and abroad and its shareholders.

For and on behalf of the Board

Mumbai Anand G. Mahindra

Date : 29th May 2010 Chairman

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Mar 31, 2000

The Directors have pleasure in presenting their Tenth Report together with the audited accounts of your Company for the year ended March 31, 2000.

Summarised Financial Results Rs. in lakhs

2000 1999

Income from Operations 11,857.48 9,530.32

Less: Finance Costs 5,875.17 4,367.15

Expenditure 2,605.67 1,992.24

Depreciation 2,031.07 2,100.93

10,511.91 8,460.32

Profit before tax 1,345.57 1,070.00

Less: Provision for tax 804.25 617.20

Profit after tax 541.32 452.80

Less : Short provision for income-tax - earlier years (0.12) -

541.20 452.80



Add : Amount brought forward from previous year 271.15 280.33

Amount available for appropriation 812.35 733.13

Appropriations:

General Reserve - 25.00

Special Reserve 108.27 90.60

Dividend on 11.25% Preference Shares redeemed on 9th October, 1998 - 53.36

Income Tax on Preference Dividend - 5.33

Dividend on Equity Shares (interim) 216.69 -

Income Tax on Dividend (interim) 23.84 -

Proposed Dividend on Equity Shares (final) 43.34 259.18

Income Tax on Proposed Dividend (final) 9.53 28.51

Surplus carried to Balance Sheet 410.68 271.15

812.35 733.13

Interim Dividend

An interim dividend @ 5% on equity shares of Rs.10 each has been declared and paid as follows to those members whose names appeared on the Register of Members as on March 31, 2000, being the record date fixed for the purpose:

Rs. in lakhs

(a) A dividend of Re. 0.50 per share on 3,19,03,231 equity shares of Rs. 10 each 159.52

(b) A pro-rata dividend of Re. 0.289 per share on 46,18,508 equity shares of Rs. 10 each allotted on 02.09.99 13.37

(c) A pro-rata dividend of Re. 0.251 per share on 46,04,144 equity shares of Rs. 10 each allotted on 30.09.99 11.57

(d) A pro-rata dividend of Re. 0.165 per share on 1,94,97,420 equity shares of Rs. 10 each allotted on 02.12.99 32.23

Total 216.69

Final dividend

Your Directors have recommended a final dividend of 1 % per equity share of Rs. 10 each payable as follows to those members whose name appear on the Register of Members as on July 17, 2000:

Rs. in lakhs

(a) A dividend of Re. 0.10 per share on 3,19,03,231 equity shares of Rs. 10 each .. 31.90

(b) A pro-rata dividend of Re. 0.058 per share on 46,18,508 equity shares of Rs. 10 each allotted on 02.09.99 2.68

(c) A pro-rata dividend of Re. 0.0502 per share on 46,04,144 equity shares of Rs. 10 each allotted on 30.09.99 2.31

(d) A pro-rata dividend of Re. 0.03306 per share on 1,94,97,420 equity shares of Rs. 10 each allotted on 02.12.99 6.45

Total 43.34

The total Dividend paid/payable by the Company will absorb a sum of Rs.293.40 lakhs including Rs.33.37 lakhs as tax on distributed profits, as against an amount of Rs.346.38 lakhs for the previous year.

Rights Issue and Capital Adequacy

In order to strengthen its capital base, your Company had made Rights Issues amounting to Rs.63.18 crore in a phased manner during the year under review.

Consequent upon the rights issues, the share capital of the Company has increased to Rs.60.62 crore from Rs.31.90 crore and the share premium, to Rs.65.37 crore from Rs.30.91 crore.

As a result of the increased net worth, the Company was able to maintain the Capital to Risk Assets Ratio (CRAR) of 20% as on March 31, 2000 against the required CRAR of 12%. Your Company is thus well placed against any increase that the Reserve Bank of India may prescribe in the Capital Adequacy Ratio following the recommendations of the task force appointed by the Government to review the regulatory frame work for Non Banking Finance Companies.

Holding of Mahindra & Mahindra Limited

Pursuant to the allotments of equity shares under the rights issues during the year, the holding of Mahindra & Mahindra Limited in the share capital of the Company increased from 93.11 % to 95.99% as of March 31, 2000.

Operations

During the financial year 1999-2000, whilst the Automobile industry recorded a moderate growth over the previous year, the Utility Vehicle segment, which your Company mainly caters to, has not shown any significant improvement.

Your Company disbursed Rs.757 crore compared to Rs.505 crore disbursed during the previous financial year [including Rs.211 crore (previous year: Rs.117 crore) towards Tractor Financing to the dealers of Mahindra & Mahindra Limited], registering a growth of over 50%. This was possible mainly due to the Companys strategy of consolidating its position in rural and semi urban markets. Your Company has extended retail finance to automotive sales of Mahindra products and has a client base of over 50,000.

The Company also commenced retail tractor financing operations during the current financial year in Rajasthan, Madhya Pradesh and Gujarat.

The income of the Company during the year was Rs. 118.57 crore registering a growth of 24.42% over the previous year. The profit before tax has increased to Rs.13.46 crore from Rs.10.70 crore, a growth of 25.75%. The profit after tax at Rs.5.41 crore is 19.52% higher than the previous years profit of Rs.4.53 crore.

During the year, the Company has added 34 branches, taking the total number of branches to 115 as of March 31, 2000.

Your Directors are pleased to report that the strategic initiatives embarked upon have resulted in another year of impressive growth, both in business and profits.

RBI Inspection

During the current financial year, the Reserve Bank of India had carried out regular onsite inspection of the various records and the systems/procedures followed by the Company and no adverse comments have been received on conclusion of the inspection.

Credit Rating

During the year under review, the Credit Rating Services of India Limited (CRISIL) has, on two occasions, upgraded the Credit Rating assigned to the Companys Fixed Deposit Scheme from "FAA-" to "FAA" and thereafter, to "FAA+". The revised rating indicates that the degree of safety regarding timely payment of interest and principal is strong. Your Company is one of the few companies amongst NBFC companies whose credit rating by CRISIL has been upgraded twice in a year.

CRISIL has also rated the Companys short-term Non Convertible Debentures with "P1+" rating. A" P1+" rating indicates that the degree of safety regarding timely payment on the instrument is very strong. The Companys Long Term Non Convertible Debentures issue of Rs.50 crore was rated "Ind AA+" by Duff & Phelps Credit Rating India Private Limited. The rating of "Ind AA+" indicates high credit quality.

Finance

During the year under review, the Company had adopted pro- active financial management policies, which helped it reduce the weighted average cost of its borrowings by 2.6% through a variety of measures such as raising finance through innovative instruments, re-arranging the mix of borrowings, correction of the Asset/Liability mis-match.

The strong financials and enhanced credit rating has made it possible for the Company to arrange adequate external resources in keeping with its growth objective, whilst at the same time, reducing the reliance on borrowings from the parent Company.

Current Year

The new Fiscal Year 2000-2001 has commenced with a cut in the bank rate as well as Cash Reserve Ratio by 1 % in two stages. These measures should benefit the Company in terms of fund availability and associated borrowing costs.

Your Company anticipates a reasonable growth in business, and will continue to provide finance primarily for Mahindra range of vehicles and tractors, with an emphasis on retail sales, particularly in rural and semi urban markets.

Year 2000 (Y2K) Compliance

Due to adequate precautions undertaken by the Company and thorough testing of its various computer hardware systems and application software, your Company had smooth transition into the new millennium.

Corporate Governance

Your Company believes that Corporate Governance is a voluntary code of self-discipline. In line with its policy of self-discipline, the Board of Directors strongly believes that it is very important that the Company should follow healthy Corporate Governance practices and report to the shareholders the progress of various measures undertaken. Although your Company is unlisted, your Directors feel it prudent to initiate reporting on Corporate Governance measures adopted by your Company. The initiatives undertaken by your Company towards better Corporate Governance are summarized below:

Board of Directors

The Company presently has nine Directors against the maximum of twelve Directors permitted by its Articles of Association. All the Directors posses in-depth knowledge of Automotive/Tractor Markets and matters related to financial services business.

Board Meetings

Five Board Meetings were held during the year, at which the Performance Reports, business development plans, Statutory Compliance Certificates and general industry scenario were reviewed and discussed. The Board meetings were well attended. The Senior Executives of the Company are present at meetings of the Board.

Audit Committee

The Board has constituted an Audit Committee on 17th February, 2000 whose terms of reference includes a review of the Companys accounting practices and financial reporting systems, interaction with the Companys Internal and Statutory Auditor, selection of accounting policies and review of the Auditors Report on the Financial Statements. The members of the Audit Sub- Committee are Mr. Uday Kotak (Chairman of the Committee), Mr. Dhananjay Mungale and, Mr. U. Y. Phadke.

Board Committees

The Board periodically delegates matters related to borrowings and share issues for speedy implementation of decisions taken at Board meetings.

Additional Initiatives

We are pleased to summarise the initiatives undertaken by your Company during the last financial year:

a) Strategy Formulation:

In view of the fast changing market scenario, your Company had reviewed its strategy with the assistance of a reputed consulting firm to achieve its strategic business objective.

b) Balanced Scorecard:

The Company is in the process of implementing the Balanced Scorecard approach to implement the formulated strategy by developing appropriate measures of performance.

c) HR Assessment Centre:

Your Company recognises that its employees are its most valuable assets. To identify the areas of development of the employees and to facilitate better career planning for them, your Company will, on an ongoing basis, conduct scientific HR Assessments of its key employees.

d) Customer Relationship Management:

Your Company has devised a process for collecting regular feed-back from its clients. Such feed-back is conveyed to the parent company on a regular basis to help it better plan its product development initiatives.

Your Company regularly conducts surveys to assess the satisfaction level in respect of fixed deposit investors. The feedback of such survey is placed before the Management and is also used to effect improvements in the standards of service. The Company plans to conduct such surveys at regular intervals to maintain high standards of service to Depositors/Investors.

Accounting Standards

The financial statements of your Company comply with the Accounting Standards recommended by the Institute of Chartered Accountants of India as referred to in sub-section (3C) of Section 211 of the Companies Act, 1956. The Company also adheres to the prudential guidelines prescribed by the Reserve Bank of India.

As a good practice, the Company gets its accounts audited on quarterly basis by the Statutory Auditors.

Fixed Deposits

As per the revised RBI guidelines, the. Company can accept Public Deposits upto four times its net owned funds, which works out to Rs. 53717.64 lakhs. Against this, your Company held fixed deposits of Rs.3694.88 lakhs as on March 31, 2000. Out of these deposits, 705 deposits aggregating Rs.110.35 lakhs which had matured as at March 31, 2000, had not been claimed as at the end of the financial year Since then, 112 of these deposits of the value of Rs.18.34 lakhs have been claimed.

Directors

Mr. Anand G. Mahindra, Mr. K. J. Davasia and Mr. Uday Kotak retire by rotation and, being eligible, offer themselves for re- appointment.

Auditors

M/s. B. K. Khare & Co., Chartered Accountants, retire as Auditors of the Company and have given their consent for re-appointment. The shareholders will be required to appoint Auditors for the current year and fix their remuneration.

As required under the provisions of Section 224 of the Companies Act, 1956, your Company has obtained a written certificate from M/s. B. K. Khare & Co., Chartered Accountants to the effect that their re-appointment, if made, would be in conformity with the limits specified in the said section.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

In view of the nature of activities which are being carried out by the Company, Rules 2A and 2B of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, concerning conservation of energy and technology absorption respectively are not applicable to the Company.

The information on foreign exchange outgo is furnished in the Notes to the accounts. There were no foreign exchange earnings during the year under review.

Particulars of Employees as required under Section 217(2A) of the Companies Act, 1956, and Rules thereunder

As required under Section 217(2A) of the Companies Act, 1956 and Rules thereunder, a statement containing particulars of the Companys employees who were in receipt of remuneration of not less than Rs.6,00,000 during the year ended March 31, 2000 or of not less than Rs.50,000 per month during any part of the said year is given in the Annexure to this Report.

For and on behalf of the Board

Anand G. Mahindra Chairman

Mumbai, 28th April, 2000